Separating fact from fiction when reading online reviews

It's more important than ever to do your research before spending your hard earned dollars. Today, more consumers are turning to online reviews before they purchase a service or product – but how can you be sure the reviews are from real people?

Earlier this year, the Federal Trade Commission announced plans to develop guidelines in an attempt to crack down on fake consumer reviews.

Angie's List has been compiling consumer reviews since 1995 and invests significant resources in an accountability process that it hopes other online outlets will follow. At the top of that list is the prohibition of anonymous reporting.

  • In March, a Dallas-based Internet marketing and online reputation management firm Dalfort Media confirmed what the New York Times, the FTC and state regulators already believe: fake positive reviews on consumer review sites are rampant. Based on ten "red-flag" factors, the Dalfort Media study found that 57% of the reviews for a sampling of businesses in the Google Places directory appeared to be fabricated.
  • This practice is illegal and can cost a guilty business hundreds of thousands of dollars in fines and millions in lost sales resulting from bad publicity.
  • One company last year had to pay $250,000 in fines after the FTC discovered its staff was posting positive reports about its products as a way to encourage sales
  • The FTC already has adopted guidelines companies are to follow when it comes to blogging and bloggers are supposed to disclose when they're reviewing a product they've been given by the company

Angie's List Tips: How to get the most value from online review sites

1.    Research the sites to determine how they work:

  • Are reviews anonymous?
  • Are reviews edited by the site or allowed to stand as the reviewer wrote them?
  • Does the site have a check and balance system to ensure the reviews are truthful and fair?
  • Does a human being read the reviews?
  • Can companies respond to the reviews?
  • Are there remedies for consumers who have issues with companies they've reviewed?
  • Can you reach someone at the site if you have questions?

2.    Review the reviewers:

  • Look for companies that have multiple reviews, especially on anonymous review sites, so you get a wide opinion base.
  • Do many of the reports seem very much alike, as if they may have been form letters submitted by someone trying to stack the deck?
  • Are all the reviews overwhelmingly positive that they sound too good to be true?
  • Do the reviews contain details that help convince you they came from real people?
  • Is there information beyond stars, checkmarks or grades so you can learn more about what led to the online review?

3.    Cast a wide net:

  • Don't rely on just one resource, especially for high dollar major projects.
  • Check a variety of online sites and regulatory sites, like your state attorney general, to get a wide opinion base.
  • Check with friends, family and neighbors.
  • Trust your instincts.
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