Five stars: Everything you need to know about online reviews

LegalVision

26th Apr 2016

By Anthony Lieu

Consumers can now easily search for reviews of products and services online. From Facebook reviews to online review platforms such as Trustpilot, a consumer’s raving review (or criticism) can be incredibly persuasive in making purchasing decisions. As such, it’s important that reviews presented to consumers are accurate, genuine and reliable. This article examines what is legal, what is not and what the potential penalties are for misleading reviews.

Types of online review platforms
Online review platforms are sites or software tools that publish reviews about goods, services or businesses. Popular examples include TripAdvisor and Yelp. Generally, the audiences of these sites are consumers looking for more information to make an informed purchase of a product.  

Unfortunately, some business owners pay individuals to write positive reviews for their product or service on these sites. Not only is this misleading and deceptive, but also it breaches Australian Consumer Law. 

Avoid misleading or false reviews
Giving a sample of your product to others to write a genuine review is fine, however, paying others to falsely endorse your product is not. The Australian Consumer Law (ACL) prohibits false, misleading or deceptive conduct and business owners are responsible for false or misleading testimonials made by others too if they are aware of it.

Reviews may mislead consumers if they are presented as impartial but are written by:

• The reviewed business itself;
• A competitor;
• Someone paid to write the review but who hasn’t used the product or service;
• Someone who has used the product but written an inflated review to receive a benefit (such as payment).

Hide incentives or connections
A failure to disclose paid endorsements may also be misleading and deceptive conduct. If you have specifically asked or paid someone to promote one of your business’s products or services, disclose it on the outset (e.g. “Jane Smith was a guest of Four Seasons Hotel”). It is perfectly legal to offer incentives in exchange for a review; often businesses will do this to promote and expose their product to a wider market, and they disclose this in the review.

Similarly, if you have asked family or friends to review, tell them to disclose their personal connection with your business in their review. If you have sent your product to an influencer, ensure that they disclose it in their promotion. This will ensure that consumers are aware of the circumstances surrounding the review and can judge it honestly.

Deleting reviews
Selectively removing negative reviews could be considered misleading conduct as the total body of reviews should reflect opinions of consumers who have submitted reviews. However, removing reviews that are offensive, defamatory or simply irrelevant will not be considered misleading. It is important that the overall impression of the reviews are an honest impression that will not deceive potential consumers.

Responding to negative reviews privately
Negative reviews understandably harm your business’ reputation. However, a rash reaction to deleting the review may simply open you up to a formal complaint. A good way to deal with the situation is to wait to cool down before responding. Understand where the reviewer is coming from and send him or her a private message. This way you can introduce yourself, politely thank the reviewer for their feedback, ask for more details and show your sincerity. You can also apologise for their dissatisfaction and offer to resolve their issue, such as through compensation. Responding publicly to acknowledge what you have done to resolve the issue afterwards is a good way to balance the effect of the negative review for your business.

Penalties
If you breach the ACL through misleading or deceptive conduct, your business will be held accountable and a financial penalty is common under these circumstances. In the 2015 case of Citymove Pty Ltd, Citymove paid a $6000 infringement notice after it published false consumer testimonials on its Moving Review website that were copied from another unrelated review website. Similarly, the 2011 case of Allergy Pathway were fined $7500 for leaving false and misleading consumer reviews on their Facebook and Twitter pages.

If you have paid others to write a review of your business or to endorse your business on an online review platform, be genuine and transparent and do not selectively remove reviews. Most importantly, ensure that none of the reviews of your business are misleading or deceptive.

Anthony Lieu is a strategist and lawyer at LegalVision with a strong background in understanding the myriad of legal issues surrounding online businesses.