Dodgy brands which post fake online reviews will soon face the wrath of the ACCC, with the consumer watchdog dishing out million dollar fines.
Recent Sensis data indicates that 74 per cent of social media users read online reviews before making a purchase, pointing to a high level of trust in online reviews.
But the ACCC has warned consumers that an increasing number of advertisers are illegitimately bolstering their online brand credentials.
ACCC deputy chair Dr Michael Schaper said the matter is being taken seriously.
“Online reviews are an increasingly popular resource for consumers purchasing goods or services. Many businesses rely on these reviews to promote their businesses, however, some unscrupulous businesses are taking advantage of consumer trust in online reviews."
In an interview with Ragtrader sister publication Adnews, Schaper said the problem is policing and enforcing the issue.
“But one of our main goals is to inform consumers of the issue, and to tell them to be aware of it. Consumers sometimes need to take reviews with a grain of salt, especially if they are only seeing very positive reviews.”
Howard Parry-Husbands, chief executive of Pollenate and director of Social Soup, argued that these unscrupulous brands should not just be punished, “they should be flogged”.
“If brands are paying for reviews, they are not reviews, it's just advertising, and if brands are posting reviews themselves, then they are not reviews, they are horse shit. The ACCC is onto a good thing here.
“There needs to be independence and transparency. But here is the caveat emptor: people are stupid if they don't apply critical caution when reading reviews.”
The ACCC did not have any specific data regarding just how widespread the problem is, but Schaper said the watchdog had decided to act after it had noticed an increase in consumer complaints to its ACCC hotline.