Today, NY attorney General Schneiderman announced a settlement with four companies in regards posting fraudulent content in the form of reviews and pay for play testimonials. Penalties ranged from $20,000 to $50,000 and included both NY and Californian companies.
Schneiderman has led the states in enforcement in this area having previously settled similar review abuse cases in the fall of 2013. Settlements were announced with four companies; Machinima, Premier Retail Group, ESIOHInternet Marketing and Rani Spa.
Machinima, Inc. is a California-based online entertainment network that distributes video content relating to video games that paid “influencers” to endorse the Microsoft Xbox and certain games. In return for free and pre release access, the influencers posted YouTube videos and received as much as $30,000 in payment but failed to disclose that Machinima had offered compensation in exchange for creating and uploading the videos.
Premier Retail Group, Inc. is a chain of cosmetic and beauty supply stores with locations throughout the US and NY “solicited reviewers through advertisements posted on Craigslist.org to write positive reviews in exchange for free samples, free vouchers or other compensation. There was no requirement that the reviewer visit a Premier Retail Group location or that the reviewers disclose that they were compensated for the review”. The company paid reviewers $25 for each review link submitted and an additional $50 if the review was still standing in two weeks. They paid for “over 30 fraudulent reviews” and incurred a fine of $50,000. $30,000 of that fine is suspended if they comply with the terms of the agreement. (some quick math: 35 review cost 35 X $75 +$20,000 for a net cost of $646 per review).
Here2Four, Incorporated, d/b/a ESIOH Internet Marketing, is a California internet marketing company that “solicited over 50 freelance writers on websites such as Craigslist.org and Fiverr.com to write over 200 fake reviews of its small-business clients for $10 to $15 per [ficticous] review”. Apparently some of which were filtered by Yelp. Their fine was $15,000.
Rani Spa operates several locations in NYC and on Long Island that contracted with a Canadian businessman who “offered to boost Rani Spa’s online reputation by posting fictitious positive reviews on Yelp.com”.
“[He] explained in an email how he only posts one review per day so as not to ‘make it look suspicious’ and get past Yelp’s spam review filter”. He charged “$300 per month. Not $300 to get 4.5 stars because of the difficulty”.
Rani Spa agreed to stop posting fake reviews and agreed to a fine of $50,000. $48,000 of that fine is suspended assuming compliance and in consideration of the “financial condition of the company”.
Obviously, NY State is NOT fake review friendly.
In the spirit of full disclosure I am a principal in the reputation development company GetFiveStars.com.