Undercover crackdown on phony online reviews

Kevin McCoy | USA TODAY

The potential customers who contacted Internet search engine optimization companies in New York said they owned a yogurt shop in Brooklyn and were looking for help counteracting negative consumer reviews posted online.

Some of the firms offered to write glowing, bogus reviews of the yogurt shop and post them on high-traffic consumer review websites such as Yelp, Google Local and Citysearch as part of their reputation-management services.

Only afterward did they learn that the yogurt shop representatives were actually New York State Attorney General's office investigators pursuing a year-long probe of the booming business of "Astroturfing" — concealing the true source and potential bias of online reviews.

Dubbed "Operation Clean Turf," the investigation disclosed Monday that many search engine optimization firms created fake online profiles and paid freelance writers based in the Philippines, Bangladesh, Eastern Europe and elsewhere $1 to $10 for each bogus review churned out.

Attorney General Eric Schneiderman said 19 firms collectively agreed to pay more than $350,000 in fines and stop posting fake reviews after being snared for violating New York laws against false advertising and deceptive business practices.

"This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution," said Schneiderman, who called Astroturfing "the 21st century's version of false advertising."

Investigators found that search engine optimization firms used sophisticated strategies to shine up clients' sometimes less-than-stellar business reputations. One posted a job listing that said: "We need a person that can post multiple reviews on major REVIEW sites. Example: Google Maps, Yelp, CitySearch."

In an effort to evade review sites' electronic filters aimed at blocking suspicious posts originating from the same computer, the ad said "Must be from different IP (Internet Protocol) addresses ... So you must be able to have multiple IPs."

Investigators said a New York City nightclub, advertising directly for a helpful reviewer, placed an online ad that stated "we will supply the text/review. You must be able to post these without getting flagged" — identified as someone hired by the nightclub.

Buffing up a stained reputation can yield big financial results. A 2011 study by Michael Luca, a Harvard Business School assistant professor, estimated that a one-star increase in a company's Yelp rating can produce a 5% to 9% increase in revenue.

Aaron Schur, Yelp's senior litigation counsel, said the company tries to ensure the integrity of reviews posted on its website by using automated filtering software, asking users for tips about suspicious content and pursuing legal action. Commending the New York investigation, Schur said "we look forward to continuing to cooperate with the New York Attorney General's office and any other interested law enforcement office or regulator to protect consumers and business owners from efforts to mislead."