Eddie Powell, Partner, Fladgate LLP (email@example.com)
Thomas Edwards, Trainee Solicitor, Fladgate LLP (firstname.lastname@example.org)
The court passed down a sentence against the owner of PromoSalento, a company which sold false reviews to hospitality businesses, finding him guilty on the grounds of using a fake identity to commit fraud. The court handed down a fine of €8,000 and the owner was given a nine month jail sentence.
The sale of fake reviews, a practice known as paid review fraud, has been a huge problem in the hospitality industry in recent times. Companies such as PromoSalento contact businesses or owners of properties and offer to post positive reviews online to boost the profile of the business in exchange for payment. TripAdvisor in particular stated that during the course of its investigation against PromoSalento it blocked or removed over 1,000 attempts by PromoSalento to submit fake reviews to its site. These reviews related to hundreds of different properties whose owners had engaged the services of PromoSalento.
There are a number of steps the review site can take in order to prevent this type of fraud. TripAdvisor, for example, applies penalties directly against the properties that it identifies as having paid for fake reviews. In the first instance TripAdvisor reduces the ranking of the offending property in the popularity ratings on the site. If the abuse continues it then issues a “red badge”, which informs consumers when they view a property that the owner has been involved in the purchase of fake reviews.
Many reviewing platforms are now working with the UK Competition and Markets Authority (CMA) to combat this kind of fraud. However, the Italian ruling paves the way for possible future prosecutions in the UK. The EU’s Unfair Commercial Practices Directive makes it a criminal offence for a commercial practice, such as an online review, to be misleading. A commercial practice is regarding as misleading if it “contains false information and is therefore untruthful or in any way, including overall presentation, deceives or is likely to deceive the average consumer”. This law was enshrined in the UK under the Consumer Protection from Unfair Trading Regulations 2008. The penalty for a conviction can result in a fine and/or a prison sentence.
The case of PromoSalento also opens up the possibility of those posting fake reviews to be prosecuted in accordance with the Fraud Act 2006. A person can be guilty of false representation under the Fraud Act if they knowingly make a false representation with an intention to make a gain. An offence under this Act also carries the possibility of a fine or prison sentence.
Fake reviews are clearly on the radar of the CMA and we may see more prosecutions for this practice in the UK over the coming months. This will be welcome news to those in the hospitality sector who rely on legitimate reviews to boost the profile of their business.