Is that Hotel or Airbnb Really Clean, Sunny and Well-Appointed?

Technology Policy Brief #92 | By: Mindy Spatt | July 19, 2023
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If you’re considering online reviews when booking summer travel accommodations, you’re not alone.  Numerous surveys show a majority of consumers rely on online reviews when choosing products, accommodations and services.  Unfortunately, those reviews are not always trustworthy, as anyone who’s arrived at a well-reviewed vacation rental only to find a dump knows.  The World Economic Forum estimates that 4% of online reviews worldwide are fake, with costs to consumers in the billions.

Many of those fake reviews come from paid services.  According to the Harvard Business Review, there is a “large and thriving market for fake reviews.”  One method the Review noted was through Facebook groups that sellers use to recruit “buyers” for their products who post positive reviews and are actually compensated for doing so.   And while many platforms, including Yelp and Airbnb, take measures to root out phony reviews, sellers are finding new ways to outwit them, and making them harder for platforms to find.  

Some states are fighting back, as are federal regulators.  California, New York and several other states joined the Federal Trade Commission (FTC) in a suit against Roomster, an online apartment rental site, for using paid, fake reviews in its listings, which customers must pay to access. 

“The FTC has seen a massive increase in online reviews in the past few years,” Serena Viswanathan, associate director of the FTC’s division of ad practices, told CBS News in an interview. “We’re all using them now to make decisions on whether to buy a product, where to stay on vacation. But unfortunately, with the rise in online reviews we have seen that bad actors can manipulate or fake reviews to deceive consumers for their own benefit.”

In announcing new efforts to rein in fakes, FTC Chair Lina Kahn called out the practice, saying “The incentives extend beyond the seller of the product itself. The platforms that host reviews may also, in some instances, benefit indirectly from fake ratings and endorsements and have financial incentives to turn a blind eye to misconduct that brings in revenue.”

Kahn’s agency is proposing rules that would penalize companies that use fake reviews to promote their products and services.  The FTC’s proposal would make selling and buying phony reviews illegal, and also seek to prevent “review hijacking,” which is when real reviews are repurposed so they appear to be for a different product then originally intended.  If the rules are finalized, violators would be subject to penalties of up to $50,000 for each violation.  The proposed rules couldn’t come at a better time, as artificial intelligence is likely to make sham ads much easier to create and distribute. 

In the meantime, how can you protect yourself?

Look for concrete wording.”  A study conducted by Cornell University found that “Truthful hotel reviews…. are more likely to use concrete words relating to the hotel, like “bathroom,” “check-in” or “price.” Deceivers write more about things that set the scene, like “vacation,” “business trip” or “my husband.” 

The quantity of reviews matters.   If a product or service only has only a few reviews in comparison to the numbers for similar products or services, it may not be as good as it sounds. On Airbnb, beware of new accounts:  Although the platform will delete or ban users after they have been caught posting fake reviews, those users will often be able to create new accounts and continue to scam consumers.  Beware!

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