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Online reviews are a way for customers to gauge your business and the products or services it provides. As such, they can be crucial for drawing customers to your business and developing a good reputation. Unfortunately, some businesses take advantage of this and fake or manipulate their online reviews to make customer feedback seem more positive than it may be in reality. If caught, the courts will heavily penalise your business for this. The consequences of such a case would be far more damaging to your reputation than a couple of negative reviews. This article will explain why you should not fake your business’ online reviews and detail other important considerations when dealing with online customer feedback.

Fair Trading Obligations

When you operate a business in New Zealand, you have certain obligations to meet when dealing with customers and other businesses as a seller. The Fair Trading Act provides some of these obligations. This law requires businesses to trade fairly and honestly, which includes:

  • accurately representing the good or service you provide;
  • not misleading your customers;
  • making sure you can back up your business claims with facts and evidence;
  • selling in good faith and not engaging in any unfair sales tactics, such as bait advertising;
  • following the safety standards for specific products, like children’s toys; and
  • disclosing important information about your products, such as care labelling and country of origin.

If you fake or manipulate your online reviews so that it looks like your customer feedback is very positive, this creates a false overall impression of customer opinion.

For example, suppose you delete negative reviews that are below three stars from your business’ website. This is misleading your customers by making it seem like you do not receive negative feedback.

Consumers look to online reviews to inform their decisions, and they expect these reviews to be independent and genuine. If you tamper with this impression, then you are misleading your customers. If the Commerce Commission launches an investigation, you could face severe legal penalties.

Penalties for Fake Reviews

If you breach your obligations under the Fair Trading Act, you could face severe legal repercussions. Not only would legal proceedings of this nature greatly damage your business’s reputation, but you could also face fines up to:

  • $200,000 for individuals; and
  • $600,000 for companies or other body corporate.

However, not all circumstances where you may have to delete or take down reviews will lead to such legal consequences. If someone posts a review or comment on your business’ website that is harmful or abusive, you have grounds to:

  • take down those comments; or
  • ask the forum that hosts the reviews to take them down.

For example, you may have a justification to delete these comments if:

  • a reviewer makes harassing and personal attacks against one of your employees online; or 
  • someone directs abusive comments towards another customer.

What If Someone Else Posts a Fake Review?

If someone is posting negative and harmful reviews of your business despite never having been a customer, you have legal options available to you in crucial cases. One of these is a defamation claim. It is against the law to make a defamatory statement about someone to a third party (such as posting online) that would harm your reputation. However, this does not apply if the statement was:

  • true; or
  • an honest opinion based on truth.

For example, if someone says that they did not like your cafe’s meat pies because they were too salty, this would not count as defamation. However, if they lied and said that your pies gave them food poisoning, this could be defamatory.

How Should I Handle Online Reviews?

You should not delete negative online reviews, but this does not mean that you cannot respond to them. Develop a review policy with your team that plans for negative reviews and details how best to deal with them. You should:

  • not edit or alter the message in genuine reviews;
  • not write fake reviews, or pay others to do so;
  • respond to negative reviews professionally and promptly, apologising for the inconvenience;
  • not exclude genuine reviews, even if they are negative reviews;
  • offer to deal with a customer’s complaint through private or official portals; and
  • listen to genuine customer feedback.

Key Takeaways

Online reviews are crucial for consumer decision-making, so it can be damaging for your business if you receive negative reviews. But do not be tempted to write fake positive reviews or delete negative ones, or else you may face hefty legal fines. Customers are more likely to engage with businesses that respond genuinely and professionally deal with negative reviews as they come. If you would like more information or guidance surrounding your business’s online reviews, contact LegalVision’s IT lawyers on 0800 005 570 or fill out the form on this page.

FAQs

Is making fake reviews illegal?

Yes, writing fake reviews for your own business is illegal. As a business that engages in commercial activity, you cannot mislead customers or make deceptive statements. Writing fake reviews that say positive things about your business is misleading.

Can fake reviews hurt my business?

If customers realise that the reviews about your business are fake, then this will hurt your credibility and they will be less likely to purchase your goods or services. If the Commerce Commission investigates you and pursues legal action, this also leads to harmful consequences for your business.

How do I report a business for fake reviews?

If you think a business’s reviews are fake and it is on a forum or marketplace, such as Amazon. you can report the business to the website’s moderators. If you think the matter is serious, the Commerce Commission is also a resource that is available.

Can I delete negative reviews?

You should not delete negative reviews of your business. For one thing, you could face legal penalties, and for another, customers are less likely to trust businesses that only have positive reviews.

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