This year, fake reviews and group buying sites offering various vouchers and discounts are the primary target of the ACCC’s blacklist for cyber crime and misleading online behaviour.
While more people are using reviews for the best customer experience, the Australian Competition and Consumer Commission (ACCC) noted that they may be misled by fake reviews. The ACCC chairman, Rod Sims, stated: ”Our concern is that people trust online websites more than they do company advertising, or more than they do reading the newspaper. And yet if those things are not reliable, then that is both unfair to the consumer and to competitors.”
In 2013, ACCC will investigate companies which are suspected of writing their own reviews or paying for positive reviews. It was confirmed in a wide-ranging interview that ACCC has looked at some of this and some websites are saying these are authentic consumer experiences, while it might be untrue.
Moreover, the ACCC and state consumer groups are receiving up to 140 complaints each month about various commercial group buying sites such as Groupon, Cudo, Spreets and Living Social. The sites offer vouchers and discounts on goods and services – caused more people to sign up for the deal.
”People are buying vouchers and they cannot actually redeem it. Therefore, they just lose their money. Many do get a discount, but some just lose their money,” Mr Sims said. ”That is unfair on the small business owners who either breaks his or her back to try and meet them, or just suffers the reputational damage. And it is unfair to consumers.”
The owner of a Sydney driving school told that his business was damaged by a group deal. He made no profit and had to put his own customers aside while fulfilling vouchers.
”It is not worth it because I made no profit at all and the price they advertise for my business is too cheap for me. I cannot afford it and they take too much commission.”
Living Social sold vouchers for Elite Driver Education for $49 and took a 40 per cent cut, leaving $29.40 for two lessons that normally cost $60 each.
The owner agreed to the vouchers because a Living Social sales representative called him repeatedly for months until he finally agreed to a contract involving 200-300 vouchers. ”People who bought the voucher did not ring until the end of the deal. They were calling too late and I was booked out,” he said.
A spokeswoman for Living Social said it was up to businesses to monetise on the vouchers as a ”customer acquisition tool”.
”Living Social welcomes open dialogue with the ACCC. Living Social has a best-in-class refund policy and offer a five-day change-of-mind refund option,” she said.
In September 2012, it was revealed that online reviews are regularly bought from temporary job forums such as Freelancer.com. In November 2011, a removal company Citymove was fined $6,600 for fake reviews on the Moving Review website. Such reviews are considered to be misleading and can attract penalties up to $1.1 million for companies and up to $220,000 for individuals.