Post by benson on Jan 9, 2017 15:01:01 GMT
When I think of Astroturf this time of year I think of football. That probably isn’t true for the New York AG’s office, which has continued its assault on the posting of fake reviews, also known as “astroturfing.” Earlier this month the NY AG announced two more enforcement actions against an urgent medical care facility and a car service. The two actions and the difference in their business models demonstrate that this issue is not going away and that any business type that uses online reviews to help market its product can be at risk. See these prior posts on the AG’s efforts: AG rips up Astroturf; and NY AG targets deceptive endorsements.
According to the AG, the urgent care provider Medrite paid Internet advertising teams thousands of dollars to post favorable reviews on Yelp, CitySearch, Yahoo Local Page, and Google Plus. Medrite also hired freelancers through Craigslist and other sources to post favorable reviews. Medrite did not require that the reviewers actually visit its clinics or that the reviewers disclose that the reviewers were being compensated for their reviews. Both are big no nos in using reviews to market your product.
The car service Carmel, according to the AG, sent 161,000 e-mail messages to its customers asking them to provide favorable reviews on Yelp in exchange for $10 discount cards on their next ride. The emails linked consumers who wanted to provide positive reviews to Yelp and similar sites and linked those wishing to post a negative review to an internal Carmel site. Posters of negative reviews did not receive a discount card. Carmel took no steps to make sure reviewers disclosed the compensation that they received and reviewers did not, in fact, disclose that they received gift cards for posting favorable reviews.
Both companies settled their cases, with Medrite agreeing to pay $100,000, half of which was suspended based on its inability to pay and contingent on its compliance with the settlement agreement. Under the settlement, Medrite is prohibited from misrepresenting that a reviewer or endorser is independent and is prohibited from compensating an endorser who has not disclosed that he or she was compensated.
Carmel agreed to similar pay injunctive of $75,000. However, the Carmel settlement also required Carmel to undertake a campaign to educate the for-hire car industry on false advertising and online reviews. Among other things, Carmel would send out emails and newsletters on this subject, take out full-page advertisements in trade publications, and conduct educational seminars on the topic. While law enforcement often use settlements as “teachable moments” with industry, this settlement’s requirement that the respondent take affirmative steps to educate industry seems novel.
So, as you spend the next few weekends recovering from holiday shopping by watching football, don’t forget to make sure that your paid reviewers and endorsers write truthfully about their experience and disclose any compensation that they have received. Failure to do that could cause you to end up with a nasty case of “turf toe” from the FTC or an AG.
www.lexology.com/library/detail.aspx?g=080e401e-e01e-4645-93aa-e0288442a8fb
According to the AG, the urgent care provider Medrite paid Internet advertising teams thousands of dollars to post favorable reviews on Yelp, CitySearch, Yahoo Local Page, and Google Plus. Medrite also hired freelancers through Craigslist and other sources to post favorable reviews. Medrite did not require that the reviewers actually visit its clinics or that the reviewers disclose that the reviewers were being compensated for their reviews. Both are big no nos in using reviews to market your product.
The car service Carmel, according to the AG, sent 161,000 e-mail messages to its customers asking them to provide favorable reviews on Yelp in exchange for $10 discount cards on their next ride. The emails linked consumers who wanted to provide positive reviews to Yelp and similar sites and linked those wishing to post a negative review to an internal Carmel site. Posters of negative reviews did not receive a discount card. Carmel took no steps to make sure reviewers disclosed the compensation that they received and reviewers did not, in fact, disclose that they received gift cards for posting favorable reviews.
Both companies settled their cases, with Medrite agreeing to pay $100,000, half of which was suspended based on its inability to pay and contingent on its compliance with the settlement agreement. Under the settlement, Medrite is prohibited from misrepresenting that a reviewer or endorser is independent and is prohibited from compensating an endorser who has not disclosed that he or she was compensated.
Carmel agreed to similar pay injunctive of $75,000. However, the Carmel settlement also required Carmel to undertake a campaign to educate the for-hire car industry on false advertising and online reviews. Among other things, Carmel would send out emails and newsletters on this subject, take out full-page advertisements in trade publications, and conduct educational seminars on the topic. While law enforcement often use settlements as “teachable moments” with industry, this settlement’s requirement that the respondent take affirmative steps to educate industry seems novel.
So, as you spend the next few weekends recovering from holiday shopping by watching football, don’t forget to make sure that your paid reviewers and endorsers write truthfully about their experience and disclose any compensation that they have received. Failure to do that could cause you to end up with a nasty case of “turf toe” from the FTC or an AG.
www.lexology.com/library/detail.aspx?g=080e401e-e01e-4645-93aa-e0288442a8fb
