Fake reviews – ACCC crackdown on dodgy social media influencers

The ACCC is cracking down on fake reviews – misleading online reviews and influencer endorsements. It is about time, but like that old arcade game ‘Whack-a-Mole’, they keep popping up.

Unlike Whack-a-Mole, where you know you are beating an inanimate object, fake reviews and influencer endorsements are beating animate objects – us! What is the problem?

‘Influencers’ receive payment from brands to write, Vlog, TikTok, YouTube, Instagram, Facebook, and otherwise flog the message that the product has amazing features and their followers (sheep is the technical term) should have it. Further reading: ACCC influencer overview.

The ACCC found a staggering 81% of posts to be alarmingly inaccurate and misleading advertising (this is the ACCC’s ‘teeth’ to prosecute).

Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations. Based on our findings we are concerned that influencers, brands, and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers.

ACCC Acting Chair Catriona Lowe

The sweep reviewed influencers on Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitche’s livestreaming service. These inflagrante influencers were tipped off to the ACCC by consumers.

The problem is not clearly disclosing upfront payment, gifts, or other incentives to promote brands, products, or services.

The worst problem is what we call ‘blind leading the blind’. Most legitimate tech journos and reviewers have from one to four decades of direct experience. We know what a product should do; we call out unrealistic marketing claims, and if it does not meet the pub test, we won’t review it. Bluntly, most ‘influencers’ have little to no technical expertise.

Manipulating online line reviews is the next big thing

The ACCC found that 37% of businesses manipulated online reviews to give consumers a more favourable impression of their business/product. Further reading: ACCC Online review overview.

In February 2022, we wrote Shock, horror – fake reviews cost as little as 25 cents each. In summary, fake review factories in India and the Philippines (anywhere English is the first language) charge as little as 25 cents each ($250 per thousand).

That’s right – fake reviews are sold by the thousand. Some Australian online merchants use these to counter the genuine 1-and-2-star negative reviews. Or worse, cast doubts on competitors’ products or services.

And now, at the end of 2023, we have AI FakeBots trawling the internet for online reviews. In short, Fakebots are sent keyword review-hunting, generating coherent paragraphs of positive or negative text attributed to impersonated names and email addresses.

This review flood means genuine negative reviews are buried deep under fake reviews. It can also influence the marketplace to give the products prominence and improve SEO search ratings.

The penalties are not enough

Corporations can already face fines of $50,000 -$150,000 of 30% of turnover during the breach period. Individuals (Influencers) can face fines of up to $250,000. But instead, the ACCC issues infringement notice penalties – a cease and desist slap on the wrist – of $3,756 for individuals and between $18,780-$187,800 for corporations. But it gets worse.

First, they only relate to Australian influencers and companies. Global brands are using fake reviews and influencers outside the ACCC’s purview.

Second, all that is currently required is a small acknowledgment that the influencer ‘may have’ received a reward for the post or for links clicked. That is not too hard.

Third, it relies on the ACCC receiving complaints, and Aussies are notoriously slow at that – for smaller purchases, taking it on the chin or writing it off to experience.

Interestingly, the US FTC (Federal Trade Commission) is ramping up its efforts to set standards for social media marketing, a rapidly expanding sector described as the ‘Wild West of advertising’. It has a plain language guide  (all influencers seem to understand y’all), which has had little influence on the influencers. The key message is not to obfuscate the commercial relationship by hiding #ad or #sp or #ambassaror in a hashtag or elsewhere but to acknowledge the relationship upfront.

And the FTC is cracking down on vendors, their advertising agencies and PR firms to monitor social media content and take swift action to ensure disclosure and correct false impressions or deceptive advertising.

CyberShack’s view – Fake reviews are the scourge of the internet

CyberShack.com.au is primarily a 100% independent deep-dive review site generously financed by the commercial activities of Charlie Brown’s CBN Media.

Our Review Terms are clear.

Vendors cannot buy or influence a review. We get at least 20 weekly approaches for ‘paid content’, and all are flatly rejected. We refuse ‘Affiliate deals’ and do not have links to Amazon or other markets to receive a payment percentage. You cannot buy anything from us.

CyberShack does ‘deep-dive’ reviews because they are 100% independent and credible, presenting more information than any other outlet. They help Australians make informed purchase decisions via a hands-on review reflecting real-world use and verifying manufacturers’ claims.

Do we keep review devices? Vendors usually require their return. Generally, lower-value review devices are left with us. They are never sold but gifted to worthy causes, community groups, or charities.

But it goes deeper, which is why we get so passionate about fake reviews – believe me, we see dozens of them for each legitimate review.

I have been actively reviewing products for over 30 years. As a journalist, I live and die by the Journalist Code of Ethics, which, unfortunately, influencers/bloggers have never heard of.

Clause 4: Do not allow personal interest or any belief, commitment, payment, gift, or benefit to undermine your accuracy, fairness, or independence. I have seen too many so-called reviewers called out on ABC Media Watch.

Clause 5: Disclose conflicts of interest that affect, or could be seen to affect, the accuracy, fairness, or independence of your journalism. Do not improperly use a journalistic position for personal gain.

Clause 6. Do not allow advertising or other commercial considerations to undermine accuracy, fairness, or independence.

Clause 7. Do your utmost to ensure disclosure of any direct or indirect payment made for interviews, pictures, information, or stories.