Fake reviews are fooling Australian shoppers, driving billions in online spending, report warns

Fake online reviews on sites including Amazon and TripAdvisor are influencing spending, a study has found.

Fake online reviews on sites including Amazon and TripAdvisor are influencing spending, a study has found. Photo: Getty

The coronavirus pandemic has triggered an online shopping boom but consumers are being misled by fake reviews, a new report has warned.

Australian shoppers are being fooled by fake online reviews on sites including Amazon, Expedia and TripAdvisor, economic research by the University of Baltimore and customer acquisition security firm CHEQ has found.

Online shopping has taken off in Australia since the COVID-19 crisis began, with 9.4 per cent of all retail shopping done online in March compared to 7.1 per cent the previous year according to Australian Bureau of Statistics figures.

But fake reviews are influencing the behaviour of shoppers, and will fuel an estimated $1.2 billion worth of online sales in Australia in 2021, the study led by University of Baltimore economist Roberto Cavazos found.

While nine in 10 shoppers rely on consumer reviews when buying goods online, around four per cent of all reviews posted are fake, the report warned.

Both legitimate and fake online reviews are tipped to influence $29.4 billion of Australian eCommerce spend in 2021.

“Fake online reviews are defined as any positive, neutral, or negative review that is not an actual consumer’s honest and impartial opinion and does not reflect a genuine experience of a product, service, or business,” the report said said.

Fake reviews appear on a range of sites “from online brands making online feedback part of their core offering (such as Amazon), sites that embed third-party review platforms such as Expedia, and platforms whose core purpose is to provide reviews and feedback (such as TripAdvisor)”, it said.

Globally, the direct influence of fake online reviews is expected to result in more than $197 billion in spending this year, the report said.

“Given the size of the market, the ease of entry and the immediate economic benefits, bad actors remain highly incentivised to engage in fake reviews,” Professor Cavazos warned.

“This complex market is adversely influencing our purchases, causing significant economic detriment, creating real revenue losses for businesses, and severely diminishing trust in online purchasing.”

The black market for fake reviews

Fake reviews are often written by humans, but researchers warned of a resurgence of ‘bot-filled’ reviews on leading eCommerce platforms.

“The trading of fake online reviews has become standardised with groups, commission structures, and loyalty schemes,” the report said.

“Payments change hands from around 25 cents to $100 per review.”

Fake reviews are bought and sold on marketplaces including ‘Facebook private groups’ that “solicit buyers to purchase their product and leave a five-star review in exchange for a full refund, and in some cases a $5-$10 commission”.

“Other crackdowns have shown bulk packages of reviews selling at $11,000 for 1000, with ‘review rings’ further enrolling in loyalty schemes to ramp up output,” the report said.

Fake reviews are also being “weaponised” in a similar way to ransomeware, the report warned, via “extortion” that “involves a demand for payment with the threat that an eCommerce site’s online ratings will drop to one star if payments, of up to $5000, are not executed”.

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter
Copyright © 2024 The New Daily.
All rights reserved.