July 2023
In today’s market, consumers are increasingly reliant on online reviews when deciding what to buy and where to buy it from.
That reliance is not only the case for high commitment purchases such as cars or electronics, but is also true for smaller decisions such as what restaurant to choose.
It’s not surprising then that businesses have become highly attuned to the damage a bad review has on their reputation – and by extension, the bottom line! As such, they invariably seek to capitalise on positive reviews.
Unfortunately, this hunger for positive reviews has resulted is some businesses attempting to trick the system. For example:
While a business might think they are working the system in their favour, the Commerce Commission has issued advice to ensure transparency for consumers.
The Commerce Commission has made it clear to businesses that they must not use any online review features to mislead customers. Using false reviews, or reviews written by employees without disclosure, is highly likely to be seen as misleading consumers.
The Commission has stressed that as online reviews continue to become an important resource for consumers, businesses need to take care to comply with the principles of the Fair Trading Act and to avoid engaging in conduct that may mislead consumers.
The Commission has demonstrated it won’t hesitate to take action against businesses found to be deliberately misleading customers, as seen by the following cases.
The Commerce Commission recently initiated proceedings against TV Shop for allegedly manipulating customer reviews. The Commission alleges that TV Shop had its own staff members post positive reviews of its products on various platforms online to inflate the number of good reviews that their products were receiving.
Although this case has not been decided yet, the mere fact that the Commission has prosecuted TV Shop will no doubt negatively impact the business’s public image and its valuable brand reputation.
In 2019, the Commerce Commission also prosecuted and fined Bachcare $117,000 for deleting negative reviews from its website so that reviews below a 3.5 out of 5 were not displayed. The judge noted that the alteration of online reviews for displayed baches infringed the purpose of the Fair Trading Act by misleading consumers.
If your business uses an online review feature, it’s critical that all reviews displayed are not manipulated in such a way that they can be seen to mislead consumers about your products or services.
It is also crucial that your business refrains from publishing false reviews or engaging in conduct that may inflate the rate of positive reviews on other platforms.
Lawyers are experts in consumer law. They can advise and assist with reviewing practices surrounding the publication of online reviews, including practical ways to do this without falling into the trap – or succumbing to the temptation – of misleading consumers.