Online deceptions involving bogus testimonials have resulted in significant consumer detriment, according to an inquiry by national and state-based consumer protection agencies.
The inquiry, conducted by Australian Consumer Law (ACL) regulators and led by NSW Fair Trading, has resulted in more than 40 businesses across Australia receiving substantiation notices over the past six months, with state and territory-based agencies demanding proof the glowing testimonials posted on businesses’ websites are genuine.
Minister for Fair Trading Stuart Ayres said NSW had issued 28 notices, resulting in 18 businesses substantiating their testimonials.
Three warning letters were issued, two businesses were referred for investigation by Fair Trading, one business amended its website and another requested an extension.
The response to the substantiation notice by one business is currently under review.
“False testimonials are a breach of the ACL,” Mr Ayres said.
“Accurate customer reviews and testimonials play an important role in online consumers’ decision making and consumers are entitled to expect reliable and independent information about a product or service.”
Across the 11 markets surveyed in the National Testimonials Project, three sectors were identified as having a comparatively high risk of carrying false online review content.
“The restaurant, real estate and alternative health care sectors are particularly prone to the publication of bogus reviews on a variety of services and products,” Mr Ayres said.
“The heavy reliance by customers on testimonials in the alternative health care sector is of particular concern, given the alternative cures are targeted at vulnerable members of the community.”
Mr Ayres said consumers shopping online could protect themselves from being duped by fictitious reviews by looking for the following warning signs:
Mr Ayres said traders needed to take reasonable steps to ensure the testimonials they publish were not only genuine but also not inherently misleading.
“Testimonials that give a materially false impression about a product or service are likely to be misleading, even if they come from a real consumer,” he said.
In a separate project, the Australian Competition and Consumer Commission (ACCC) has conducted its own investigation into fake and misleading online review practices, resulting in the publication of a targeted guideline aimed at businesses and review platforms.
The publication is now available on the ACCC’s website.
For more information about Fair Trading go to the Fair Trading website.
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