Fake Online Reviews & Truth in Advertising

The FTC (Federal Trade Commission), an agency tasked with "protecting America's consumers", seems to have awakened from a slumber with some vigor when it comes to its policing functions particulalry in the area of  "fake" online reviews.

Nearly a year ago the FTC put out a press release on "guidelines governing endorsements and testimonials". A key element was that "material connections” (sometimes payments or free products) between
advertisers and endorsers – connections that consumers would not expect –
must be disclosed.". That allegedly did not deter some agencies' employees from going beyond the call of duty and being overly enthusiastic about clients' products they supposedly bought on their own. That at least is the facile explanation being offered in a case against a public relations firm that was recently settled by the FTC.

Fake hotel reviews have, for years, been the bane of leading hotel review sites like Tripadvisor.com and VirtualTourist.com both of whom have elaborate – though not publicly revealed – mechanisms in place to catch fake reviews which arguably are not foolproof. For instance, it is unlikely that reviews of the kind mentioned in this Times of London article from four years ago, where the owner of a hotel gushed about his own facility, are likely to remain on the website.

One way for these UGC (user generated content) sites to further enhance their credibility is to replicate Amazon's "real name"  feature on its book review site. Of course, TripAdvisor's strength is the number of reviews each hostelry quickly gathers and the facility's rankings move up or down based on the reviews Most potential guests can fairly easily make out any "fake" reviews but usually can also tease out outrageously biased ones even when posted by real guests. Nevertheless, lacunae such as the ability to post reviews without necessarily "purchasing" a product are unnecessary.

The FTC also serves to monitor, via explicit guidelines, truth in advertising. Unlike the UK, the US does not have an independent industry funded watchdog like the Advertising Standards Authority which monitors advertising content to minimize the risk of consumers being misled. The ASA has come down hard on companies, including hotels, over seemingly minor and sometimes unintentionally misleading ads offering deals that are hard to snag for consumers. As in online reviews, the FTC  has guidelines for truth in advertising which proscribe deceptive and unfair acts.What it does not address is the long standing industry practice, across the ratings spectrum, of "hosting" travel writers who (usually) end-up gushing about their stay in the hotel they are reviewing.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

One thought on “Fake Online Reviews & Truth in Advertising”

  1. Just a couple of points. The article states that
    “hotel review sites like Tripadvisor.com and VirtualTourist.com both of whom have elaborate – though not publicly revealed – mechanisms in place to catch fake reviews which arguably are not foolproof”. There’s no “arguably” about it – they are far from foolproof. Fake reviews are an accepted fact of life on TripAdvisor. Since the “checks” are secret there’s no way of telling whether they are “elaborate” or not. From a practical point of view they are unlikely to be any more sophisticated than a check of the reviewer’s email address, IP address and TA cookies on the machine sending the review. All of these are childsplay for a reasonably savvy person to trick.
    I agree with the idea of introducing a verification procedure for reviews, though the one you suggest (Amazon)is not exactly difficult to circumvent either as all it requires is a verified email address. The Amazon system was previously suggested here: http://tripadvisorwatch.wordpress.com/2010/07/25/anonymous-reviews-how-to-verify-identity-yet-maintain-anonymity/ .

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