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Risking damage to reputation, more companies paying for fake social media reviews

September 20, 2012

As consumers rely more heavily on social media ratings and reviews, by 2014 up to 15 percent of those recommendations will be fakes, paid for like advertisements. According to analysts at the technology-research company Gartner, some Fortune 500 brands will face litigation from the U.S. Federal Trade Commission (FTC) for the fake reviews.

“With over half of the Internet’s population on social networks, organizations are scrambling for new ways to build bigger follower bases, generate more hits on videos, garner more positive reviews than their competitors and solicit ‘likes’ on their Facebook pages,” said Jenny Sussin, senior research analyst at Gartner. “Many marketers have turned to paying for positive reviews with cash, coupons and promotions… in the hope of increasing sales, customer loyalty and customer advocacy….”

But organizations that pay for phony reviews risk public condemnation, monetary fines and lower profitability, the research found. In 2009, the FTC determined that paying for positive reviews without disclosure equates to deceptive advertising and would be prosecuted as such. Instead of posting bogus favorable reviews, some reputation management companies are now concentrating on identifying fake but defaming reviews and taking legal steps to remove them — a new trend of defending reputations rather than trying to create them.  — Greg Beaubien


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