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, has resulted in more than 40 businesses across Australia receiving substantiation notices during the past six months, with state and territory-based agencies demanding proof the glowing testimonials posted on businesses’ websites are genuine.

False testimonials are a breach of the ACL and, in most cases, removal of unsubstantiated testimonials has occurred after regulator intervention

Customer reviews and testimonials play an important role in consumers’ decision making. 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. The heavy reliance by customers on testimonials in the alternative health care sector is of particular concern, given the alternative cures can be targeted at vulnerable members of the community.

The inquiry identified the following as warning signs of fictitious reviews:

• Claims of disinterest: Testimonials claiming the consumer was originally disinterested in a product but after use “saw the light” and now wishes to share their positive experiences.

• Competitor spruiking: Negative reviews criticising a specific product on blogs and feedback websites, but then spruiking a competitor’s product.

• Duplication: Publication of the same testimonial multiple times, or the publication of the same testimonial under a different customer alias.

• Discount codes: Customer reviews that give a discount code, or inform a consumer where they can purchase a product or service.

• Marketing speak: Testimonials that read like a press release or an advertisement.

• Repetition: Reviews that repeatedly cite the entire name and model of the product.

• Over-the-top language: Reviews that include exaggerated praise, empty adjectives and urge consumers to “go out and buy the product right now”.

• Five-star testimonials: Unqualified five star reviews that contain no specifics on the product or service.

• Minimal reviews but overwhelmingly positive: Websites where only a few reviews are provided, but all of them are overwhelmingly positive.

There are strong penalties for fake testimonials. As part of this initiative, last year a WA motor vehicle repair company and its director were fined a total of $33,000 for posting fake online testimonials. A Consumer Protection investigation found four testimonials on the company’s website were entirely fictitious and concocted by the company’s web designers.

The accused pleaded guilty to making false or misleading representations in breach of the Australian Consumer Law during a subsequent Magistrates Court hearing.

The accused pleaded guilty to making false or misleading representations in breach of the Australian Consumer Law during a subsequent Magistrates Court hearing.

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 Online reviews: a guide for business and review platforms is now available on the ACCC’s website: www.accc.gov.au.