On September 23, 2013, the New York Attorney General announced that it had levied more than $350,000 in fines against companies for using fake online reviews. In “Operation Clean Turf,” a year-long undercover investigation of the reputation management industry, the New York regulator accused 19 companies of false advertising and engaging in illegal and deceptive business practices because of their use of fake reviews.

In this undercover investigation, representatives of the New York Attorney General posed as the owner of a yogurt shop. They called leading SEO companies for help fighting negative reviews on consumer review websites such as Yelp and Citysearch.com.

The investigation revealed that the SEO companies’ reputation management services relied on bogus online profiles and advanced IP spoofing techniques to hide their true identities. Their own employees and freelance writers from the Philippines, Bangladesh, and Eastern Europe wrote and posted fake reviews.

In some instances, they even publicized the fraud, posting on Craig’s List for people to “post multiple positive reviews on major review [sic] sites.” A spa advertised: “I need someone who is a Yelp expert to post positive reviews for a spa….” A nightclub advertised that it was looking for writers to post reviews “without getting flagged.”

Faced with flagrant violations of the law, the New York AG doled out penalties to nineteen companies, ranging individually from $2500 to just under $100,000. In its announcement, the AG’s office explained: “The practice of preparing or disseminating a false or deceptive review that a reasonable consumer would believe to be a neutral, third-party review is a form of false advertising known as ‘astroturfing.’

Astroturfing is false and deceptive, and it violates [New York Law].” The Attorney General asserted how consumers rely on these on-line reviews in making purchasing decisions, warning that prosecutors will enforce laws against deceitful practices.

The lesson here is that even with the federal government in shut down, state regulators are watching. Astroturfing may result in legal action with financial penalties by federal or state authorities.

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