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Amazon merchant hit with $12.8m fine for fake Amazon reviews
An Amazon merchant is facing a $12.8 million fine for allegedly making false medical claims for their weight loss pills, they also commissioned fake Amazon reviews making the same unsubstantiated claims.
An independent watchdog of consumer protection, the Federal Trade Commission (FTC) announced their first case yesterday challenging Amazon’s seller for using fake paid reviews containing false and unsubstantiated claims for marketing their product. A $12.8m (£9.61m) judgement was imposed against Amazon seller. However, it will be suspended if the company pays $50,000 (£37,551) to the FTC and fulfils other tax obligations. The FTC said if the merchant had misrepresented their financial condition the full charge will immediately become due.
The FTC states that Cure Encapsulations, Inc. and its owner, Naftula Jacobowitz have made false and unsubstantiated claims for their ‘garcinia cambogia’ weight-loss supplement and that they paid a third-party website to write and post fake reviews on Amazon.com. The FTC has required the seller to provide reliable scientific evidence for any further product claims.
“People rely on reviews when they’re shopping online. When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”
– Andrew Smith, director, FTC
The FTC alleges that the Amazon seller has paid a website, amazonverifiedreviews.com to create and post high-rated product feedback. The authority suggests that Naftula has bribed the site to boost their products to a 4.3 or 5 stars average rating, and asked to “please make my product … stay a five star.”
The FTC have ordered Naftula to email shoppers who purchased the products detailing the FTC’s allegations regarding their efficacy claims. The watchdog also requires the seller to notify Amazon that they purchased fake Amazon reviews and identify to Amazon the fraudulent feedback.
Amazon’s response to fake Amazon reviews
“Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers. Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.”
Fake Amazon reviews aren’t news any more. We have seen Amazon deleting more than 30,000 fabricated reviews on their websites over the last two years. Amazon is putting in work to tackle fraudulent feedback on their marketplace.
While fake reviews with high-ratings may increase sales, the question is, is it worth merchants taking such a risk to experience a temporary boost? The FTC are doing their best to make sure the stakes are too high.