In December 2012, the California Lawyer reported the anti-SLAPP statute can be used to prevent retaliatory litigation and protect free speech in California, but with so many business review sites cropping up, the crackdown may be on people who post good reviews rather than bad ratings.
In 2012, Yelp! got tough on reviews it believes may have been bought and paid for by issuing a “warning” message that pops up when a review appears sketchy. The Yelp! blog mentioned businesses using fake testimonials were “…wrong to mislead consumers with fake reviews…”
The Federal Trade Commission (FTC) is in charge of investigating false advertising. Anyone who knows of advertising scams can file a report via the FTC website. The report can remain anonymous. The FTC believes endorsements on the Internet must not be misleading and should be truthful. Fake testimonials such as when an endorser’s experience does not represent what consumers will achieve from the service or product can be considered illegal. When an average consumer is unlikely to attain the same result as an endorser, the ad must conspicuously and clearly disclose the generally expected results.
For example, a Los Angeles bar exam tutor’s Yelp! page has the following testimonial posted on March 29, 2012: “Additionally, in terms of the MBE, I went from an rate of 63% correct answers to a consistently ridiculous 92% rate!!! On one practice exam, I got a 192/200!!!” In response to the filtered testimonial, a competitor bar exam prep provider who has achieved 170, 172, 176, 178, and 180 scaled scores on actual MBE exams, viewed the MBE claim by the testimonial on the Los Angeles tutor’s Yelp! page as “completely and utterly false.”
The Los Angeles bar exam tutor and his Director of Marketing and Operations/Legal Assistant who is a law student at a non-ABA law school in Southern California were exposed on bar exam discussion websites for posting fake testimonials. Though the Los Angeles bar exam tutor claimed to help his students turn the California bar exam into an open book, his advertising philosophy was not as transparent.
In one testimonial, the Director of Marketing and Operations/Legal Assistant used a family relative to post a fake testimonial without the family member disclosing a connection with the Director of Marketing and Operations/Legal Assistant. The fake testimonial the family member posted on November 16, 2011 got filtered in Yelp!, but the family member let the fake testimonial stay up on Yelp! for at least five months to mislead consumers: “After taking…failing the Bar, I was so disappointed that I didn’t want to take it again. Then I found…that they give you one on one attention and show you where your weaknesses are. I wrote more essays in this course than I thought Possible! Thanks for helping me pass the Bar:)” The family relative claimed to have failed the bar exam after using a competitor service, and then after using the Los Angeles bar exam tutor, she passed the bar. The family relative never attended law school according to her resume on Indeed and LinkedIn, and the competitor service did not have records of the family relative ever being a customer.
The FTC recommends disclosing any relations between the endorser and the business marketing a service or product that would affect how consumers evaluate the endorsement. False advertising not only hurts consumers, but disrupts businesses in the industry of the false advertiser because one entity defrauding consumers can take away consumer trust in an entire industry. Competitors harmed by a business that uses fake testimonials might file a consumer fraud complaint with a district attorney’s office.