How Misleading Online Reviews Can Destroy Your Business

Businesses often post reviews of their goods and services on their website, or on external review platforms. Consumers use online reviews to decide whether or not to purchase goods or engage the business for their services.

As a business owner, you are obliged to make sure that the reviews of your business do not mislead the consumers to win them over. Not only that, but if you know that a review is fake, and you do not remove the review, you are in breach of the Competition and Consumer Act 2010.

This article sets out when a review is considered misleading and provides businesses with tips on how to avoid breaching the Competition and Consumer Act 2010.

When is a Review Misleading?

Reviews are meant to be information about goods or services that are written by an impartial party. Consumers rely on reviews when making decisions about whether to enter into a legal relationship with a business for their goods or services.

A review may be misleading if the consumer thinks that the review is impartial but, in fact, the business wrote it. The business is not going to report bad experiences about itself and loses this impartiality. Similarly, a review written by a competitor business is not impartial.

If you pay someone to write a review, but they have never used your goods or services, then the review is likely to be misleading. If someone has used your goods or services, but the review is exaggerated because they are receiving some sort of benefit, their review is not reliable and is misleading.

Close Up: Citymove Pty Ltd

In 2011, Citymove had to pay a $6,600 for publishing false testimonials on its Moving Review website. The reviews were found to be misleading because they appeared to have been written by CItymove customers, but in reality, were not.  

How to Avoid Breaching the Competition and Consumer Act 2010

If your family and friends are writing reviews about your business, make sure that their personal connection to you is clear. It is the perceived impartiality that can make a review misleading. If it is obvious that the review is written by a friend of the business, consumers are likely to read the review with a grain of salt.

Don’t write reviews if you haven’t actually experienced the goods or the services that you are reviewing. It is also important to make sure the reviews are genuine and convey your actual opinion.

You should not offer financial or non-financial benefits to people in exchange for writing a review for your business if they have not used your goods or services, or if they do not genuinely believe the review they are writing.

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In short, don’t try to be sneaky with your online reviews. Manipulating the reviews to make your business look better is misleading and unlawful. Be transparent about who is providing the review so that consumers know where the opinion is coming from.

Questions? Get in touch on 1300 544 755.