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The Federal Trade Commission recently settled charges against a company accused of using misleading online reviews. The FTC claimed Legacy Learning Systems advertised a guitar learning program with endorsements and reviews. These supposedly came from ordinary consumers or reviewers. The company failed to disclose these endorsements and reviews were provided by the company's paid marketing affiliates.

Such an arrangement violates the Federal Trade Commission Act. It's a deceptive and misleading practice. The company has agreed to pay $250,000 and maintain a system to review and monitor its affiliate marketers’ representations and disclosures.

Original Article

Looking for a good, quality product at the right price, like a toaster or tires for your car? Many of us do some research before buying just about anything, and more often than not we find reviews, ratings, and recommendations from other buyers. How much do you rely on consumer reviews?

Yelp

Yelp is a popular consumer-oriented website offering a wide variety of services. It's main focus, however, is to help people like you and me find trustworthy businesses and merchants selling the quality goods we're looking for, from restaurants to barbers to car mechanics.

It does this by letting consumers write and post reviews on its website about the things they buy. Yelp boasts that consumers (they're called "Yelpsters") have posted over 9 million reviews about local businesses.

Some of those businesses didn't like what they were seeing, though. In fact, they were so unhappy they filed a class action lawsuit against Yelp in a California federal court.

The complaint was filed by all sorts of businesses in the San Francisco area, such as an animal hospital, bakery, and a furniture store. They claim many types of misconduct, dishonesty, and fraud, all of which hurt the various businesses. Two of the most noteworthy claims are:

  • Yelp had a certain practice: After a consumer wrote a negative review or recommendation, Yelp employees called the affected business and offered to sell it an "advertising package." For a price, the business would be advertised on Yelp and Yelp would remove the negative review or recommendation from the site
  • Yelp employees actually wrote bad reviews about some businesses, services, and products

The bad reviews for Yelp don't end there, either. Apparently, there are so many disgruntled businesses that an anti-Yelp, pro-lawsuit website has been created.

Can You Trust the Reviews?

As you've researched the product or service you're looking to buy, you've probably come across dozens of consumer reviews. When you read them, you usually get an idea about whether the reviewer is being honest and straightforward. And, for the most part, you can generally trust your gut reaction; many consumers give their honest opinions.

Nonetheless, to protect your wallet and make an informed decision about whether to buy, it's best to use consumer reviews wisely. Don't trust them blindly. Here's what you can do:

Understand certain realities. Sometimes consumers over-rate or under-rate a product or service for a variety of reasons, such as:

  • Anger or disappointment over a particular experience or in a certain product, or inexperience in buying similar products
  • Non-buyers and users. Believe it or not, it's possible you're reading a review written by someone who hasn't even bought or used the product or service! Someone with a personal axe to grind with the store or restaurant owner may take revenge by writing a bad review. Or, maybe a competitor posts bad recommendations to steal business away from the company you're reading about
  • Owner reviews? The flip side to revenge-seekers and saboteur-competitors: Businesses and merchants who post good reviews about themselves to drum-up business
  • Sometimes consumers are paid to give reviews, sometimes by the business or merchant and sometimes by consumer review websites. Such payments may influence a reviewer's opinion

The moral: Take reviews with a grain a salt if they seem too negative or too positive.

Take control. To make a good buying decision:

  • Read more than one review, and from more than one website or some other source, like magazines and newspapers
  • Try to look at positive, negative, and neutral reviews, but try to focus on the objective ones, rather than those that seem a little too emotional or extreme
  • Talk to real people, too. Your family, friends, and co-workers may have experiences to help you
  • If you're visiting a business, like a restaurant, ask other customers there what they think about the business, if they liked it, and if they'd come back again. If you're buying a product from a retail store, ask a sales person what she thinks about the item, if other customers have said anything good or bad about it, and how often she sees the item being returned by customers because it doesn't work as advertised
  • When possible, check with a trustworthy and unbiased source, such as Consumer Reports and the Federal Trade Commission (FTC). This is most useful when you're in the market for products, like cars, computers, and vacuum cleaners, etc. For reviews and recommendations on services in your local area, like restaurants, plumbers, and dog groomers, check with sites like the Better Business Bureau (BBB), Angie's List, and even sites like Yelp

It's your money, and today maybe more than ever, you need to do everything you can to make sure you spend it wisely.

Questions For Your Attorney

  • Isn't it illegal for a business or company to ask workers to post positive reviews about the business' products or services?
  • I wrote an honest but negative review about a company and its product, and now that company is threatening to sue me for defamation. Can it sue me and win?
  • Can I join the class action lawsuit against Yelp? If not, can you and I start our own class action lawsuit?

Tagged as: Consumer Law, Consumer Fraud, consumer reviews, consumer fraud lawyer