JUPITER, Fla. — Online reviews of companies and restaurants can make or break their business, and the Federal Trade Commission said 40% of these reviews are fake.
Hundreds of homeowners needed contractors in a hurry after tornadoes devastated neighborhoods earlier this month.
Workers from Storm Team Construction workers have been busy.
Company president Chad Simkins said it's 4.5 star rating on Google helps.
"In the contracting business, on-line reviews are the gold standard," said Simpkins. "This is what people go by."
Eleven months ago, we showed you how negative, fake online reviews cost Storm Team Construction potential customers.
On the eve of Thanksgiving, Simkins' Google page was bombarded with bad posts.
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Fake online reviews plague Jupiter business
Google took down the bogus reviews after my investigation found these reviews came from people who were not even customers, and in some cases didn't exist.
I asked Simkins how he took it when he got those phony bad reviews.
"Try the worst thing as a business owner that you could deal with," said Simkins back in December when we first reported his story.
If those bogus reviews were posted today, and the FTC found out who did it, they could be sued and fined up to $50,000, but there will not be criminal penalties.
"This is for civil penalties," said business litigator Jon Philipson, who has represented businesses victimized by fake reviews, and welcomes the new FTC rules. "It's helping to create a marketplace for ideas and keeping it open and clean."
The new rule will allow the agency to strengthen enforcement, seek civil penalties against violators, and deter AI-generated fake reviews, the FTC said on its website.
Phillips said the FTC will ban reviews written by:
- Someone who's not a customer
- Someone using a fake name
- Employees reviewing their own business
- By customers offered incentives by a business if the review requires an opinion
For example, a restaurant can still ask you to give a positive review but cannot offer you a free drink or a discount on your bill if you leave a positive review.
"The new rule is trying to target some of that activity," said Philipson. "I think only time will tell if the FTC will have sufficient resources to tackle it."
"We can put a stack of books 10 miles with laws but if we don't enforce it, what good does it do," added Simkins.
Philipson warns the new rule still doesn't fine the online platforms that host reviews.
He adds many fake reviews come from overseas, making it challenging for the FTC to prosecute.
Still as Simkins, whose Storm Team Construction Company was damaged by a storm of fake reviews, said, "It's a start!"
If you are either a victim or know of suspicious activity involving fake online posts, you can report it to the Federal Trade Commission here.
