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Car Dealers Fined $3.6 Million For Fake Reviews & Deceptive Practices

Cars play a huge role in the local economy and a large part of every family’s budget. Because of that and the sometime shady practices in the industry, the FTC has, over the past few years fined a number of car dealerships and groups for deceptive advertising or sales practices.

car dealer reviews

Last week the FTC upped their game and fined a car dealership group $3.6 million dollars. What makes this order stand out is that case involved fake reviews as well as deceptive advertising.

Fake Reviews Drawing More Attention & Bigger Fines

The FTC has looked at a few review related cases in the past. One included fake reviews in the iTunes by an agency on behalf of an app creator and another case where a transport company was requiring a review in order for customers to get a $50 cost savings on their order. In the former case the fine was $250,000 and in the later there was just a cease and desist order.

This case however is the first time that the FTC has specifically laid out fake local reviews as a basis for their actions. The size of the fine is a bit of an eye popper as well.

According to MediaPost the “complaint also included allegations that the businesses posted fake reviews on sites including Facebook, Google and Yelp. ‘Defendants have received numerous negative reviews on online websites complaining about defendants’ deceptive and unfair practices.

In numerous instances, defendants and defendants’ employees have posted positive, five-star reviews of the dealerships on these websites that deceptively purport to be objective or independent.’ The FTC alleged that at least 13 five-star Facebook reviews for one of the dealerships were posted by the company or its agents and they also allegedly populated its own site with reviews that weren’t genuine.”

Another of the dealerships in the group got bad reviews on Yelp and the dealership’s Internet manager, his wife and another manager allegedly posted five-star reviews to the site.

Reviews Have Rules, Don’t Chance It

Reviews are important. No question about it. And they have become evermore important with Google’s highlighting of Review from the web and their encouragement of the use of Rich Snippet review formatting.

With this increased visibility it is more important than ever that your business plays by the rules.

 

About The Author

Mike Blumenthal is a co-founder of GatherUp and helps oversee our research, industry insight and agency offering. Mike has long been regarded as the foremost expert on local search and Google Maps, earning the nickname “Professor Maps”. Mike also co-founded Local University, which provides small business and agency training in sustainable local search marketing. His motto: All Local All the Time.  He writes at his blog and does a twice a week LocalU podcast about Local marketing. 

9 Replies to “Car Dealers Fined $3.6 Million For Fake Reviews & Deceptive Practices”

    1. @Jason
      It is good to see some enforcement…. finally. And not just enforcement but enforcement with more than just a “cease and desist”. It does provide some caution for everyone although I think larger dollar amount retailers like car dealers are the most vulnerable right now.

  1. I Agree – I even see a few SEO’s loaded with ‘very suspect’ reviews. It’s not just on Google, I know of a few companies in the home reno field that have many, many (dozens) of suspect reviews on a couple of the home reno third party review sites. Keep going Google.

  2. It’s a shame these companies don’t spend the time to put into place an effective program to garner legitimate reviews. it really isn’t that hard.

  3. Glad to read your blog…! I agree with your through, Now a day Reputation management is most important factors for automotive businesses. Organic & Positive Customers Reviews on social media can be attract more customers to dealerships. Thanks for sharing.

  4. We need more of this and more press like this. It has been way too long for something like this to hit. I wish more people covered the story so I could be more a deterrent. The sad thing is that the fake reviews are still live on Google, Yelp and other websites. I have attempted to get fake 5 star reviews removed and have not gotten very far with Google. I guess its not a major issue for them yet. I guess more attention needs to be brought to this issue to get real changes. Thank you for covering it Mike.

  5. I have competitors that have created thousands of fake business profiles and reviews for them. Who did the legwork in tracking these down and prosecuting them?

    Is there any place that I can easily report this information?

  6. @Roderic
    There is no single place to report abuses… nor any guaranteed method to achieve results.

    Generally speaking the State’s Attorney General offers up a reporting form. It might also make sense to contact the FTC.

    Sometimes the Google or Yelp will take down reviews if reported as well.

    If you contact me offline mike@getfivestars.com and send along some of the examples I would be glad to take a look and see if there is an obvious strategy.

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