EAST PROVIDENCE, R.I. (WPRI) — For the first time, the Federal Trade Commission is taking action against a company that used fake online reviews to sell its product.
According to the FTC, Naftula Jacobowitz, the owner of Cure Encapuslations, Inc. paid amazonverifiedreviews.com to write and post fake reviews about “Quality Encapsulations Garcinia Cambogia Extract with HCA” capsules, which was marketed as an appetite-suppressing, fat-blocking weight loss pill.
According to court documents, Jacobowitz demanded 30 fabricated reviews to boost his overall rating to 4.3 out of 5 stars. The FTC also accused the company of making false and unsubstantiated claims about the product.
Now, Cure Encapsulations and Jacobowitz are facing a $12.8 million judgment, which will be suspended upon payment of $50,000 to the FTC.
The company’s settlement with the FTC also prohibits the defendants “from making weight-loss, appetite-suppression, fat-blocking, or disease-treatment claims for any dietary supplement, food, or drug unless they have competent and reliable scientific evidence in the form of human clinical testing supporting the claims,” according to the FTC.
Cure Encapsulations is also required to notify consumers who purchased the supplement.
The Better Business Bureau’s Paula Fleming says fake reviews for products and services run rampant online.
“It’s just unfortunate that consumers don’t know who to trust anymore,” Fleming said. “It doesn’t only hurt the business, but it hurts the customers.”
In some cases, companies pay for positive reviews to boost business. In other cases, the goal is to tank the competition.
“What we have seen is competitors logging on and using alias email addresses and writing negative customer reviews,” Fleming said. “It’s actually increased year over year.”
Consumers can sift through the fakes.
“What I encourage people to do is go to a verified source,” Fleming explained. “A verified customer review means that the business has been contacted and that it is indeed a customer of that business.”
According to the BBB, consumers should also:
- Avoid anonymous reviewers, especially if the user profile was recently created
- Watch out for scripted reviews or similar phrases in multiple reviews
- Research products and services beyond online reviews
BBB research shows 88% of consumers say they trust online reviews as much as personal recommendations.