August 2013, Auto Dealer Today - Cover Story
The emergence of consumer review sites has given rise to what one Yelp official refers to as the “consumer deception industry.” And in recent months, Yelp and Edmunds have taken steps to prevent their sites from becoming playgrounds for fake reviews.
In late July, Edmunds filed a lawsuit against Humankind Design Ltd., the parent company of GlowingReviews.co. The vehicle information site claims the Friendswood, Texas-based company was doing more than managing dealers’ online reputations, charging the defendants with registering more than 2,000 fake accounts on Edmunds.com and attempting to post at least 76 fraudulent reviews on behalf of 25 dealerships nationwide.
One month earlier, Yelp filed a similar lawsuit against Timothy Catron, owner of AdBlaze.com and BuyYelpReview.com. Yelp is also seeking monetary damages from 50 yet-to-be-identified defendants who allegedly utilized the company’s services to create fake reviews.
Ken Levin is general counsel for Edmunds. He says the car-shopping site is not pursuing action against the dealers Humankind represented because it would be difficult to prove whether they were complicit with the scam. In one case, he adds, the affected dealer claims he has never even heard of Humankind. “We don’t really know what the facts are,” Levin says. “And that’s why we’re not really accusing the dealers of anything, other than putting them on notice of the situation.”
Edmunds and Yelp each filed separate lawsuits this summer against third-party websites attempting to post fake reviews.
On Jan. 22, Edmunds identified a review that was “likely to be bogus.” Almost two months later on March 11, the company was able to connect Humankind with the additional fake reviews that began to pour in from the firm’s 2,065 accounts. This led to the legal action Edmunds filed in a Texas court on July 23.
Justin Anderson, owner of Humankind, denies the allegations. “We don’t write the reviews or invent the reviews. We’re posting, to our knowledge, a bona fide review,” he tells Auto Dealer Monthly.
The suit seeks injunctive relief, which would prohibit Humankind from registering additional accounts or submitting reviews to Edmunds.com. Since the petition was filed, Edmunds reports it has not detected any further reviews submitted by Humankind on behalf of car dealers.
The majority of the fraudulent reviews were linked to operations based in New York City and Los Angeles. Levin says Edmunds reached out to the list of dealers, 12 of which are clients, and issued the following warning: “Please do not do business with companies that don’t honor the requirements of our membership agreement.”
Levin presumes that since no further reviews from Humankind have appeared, the company likely grew reluctant to continue posting. That leads to the possibility that there could be more dealers involved who were left waiting for reviews they purchased before the lawsuit was filed.
To submit a dealership review to Edmunds.com, users must register with a name and e-mail address. Registrants must also agree to the site’s terms of service (TOS), which states members must “agree to register only once using a single username,” a recurring point highlighted in the lawsuit.
GlowingReviews’ site has since been taken down, but its old FAQ page can be found on the Internet archive site WayBack Machine. The page acknowledges that the company’s reviews violate the terms of service for various review sites. “If you take the time to actually read the TOS, you’ll see that it’s very easy to break something,” the page states. “Every business plays in this grey area and this service just lets you do it much more efficiently.”
Humankind is also charged with trademark infringement for using Edmunds’ company name and logo. GlowingReviews’ homepage lists 15 sites it has partnered with, including Edmunds and other top automotive review sites like Yelp, Google+, Cars.com and DealerRater. Yelp, Cars.com and DealerRater deny they are partners with the site, and Google declined to comment on the litigation.
Yelp filed its suit on June 20 against a similar third-party company. Yelp’s director of public policy, Luther Lowe, refers to that defendant as a participant in the so-called “consumer deception industry.”
The June lawsuit charges AdBlaze and BuyYelpReview with trying to “game the system and build a business on selling fraudulent content,” among other allegations, including trademark infringement, false advertising and “cybersquatting” — a practice by which a site uses an identifiable company, such as Yelp, within its domain name to profit for itself.
The defendant, AdBlaze.com’s Catron, did not respond to requests for comment.
According to the complaint, Yelp has yet to identify the entire list of businesses that purchased the reviews in question, so it is uncertain whether any are car dealers. Lowe declined to comment directly on the pending litigation, but offered insight in broader terms.
“There’s been a steadfast emphasis [at Yelp] on protecting consumers and making sure that, at the end of the day, the stuff you read on Yelp is a pretty darn good predictor of what your offline experience is going to be,” he says. “If you don’t have that core piece of it, then people are not going to come back to your site and use it as a resource.”
Gartner Research predicts that 10 to 15 percent of all reviews will be fake or deceptive by 2014. That number currently sits at around 2 to 6 percent, according to findings in the firm’s January 2013 report, “Solve the Problem of Fake Online Reviews or Lose Credibility with Consumers.” If realized, the prediction could cut into the influence review sites are having on consumer purchases, with Digital Air Strike, a reputation management firm, reporting that 67 percent of vehicle shoppers rely on customer reviews when considering a vehicle purchase.
Jenny Sussin, co-author of the study, wrote in an e-mail to Auto Dealer Monthly that Edmunds and Yelp have their reputations on the line, so these lawsuits serve as important reminders to both the reputation companies and dealers.
“If they start being known as a playground for fake reviews, people stop visiting the site and advertising spend goes down the drain. It is important for these sites to show they are trying to maintain a degree of integrity that allows for people to still trust them,” Sussin says. “However, as Edmunds and Yelp get smarter, so do people soliciting fake reviews.”