Fake customer reviews could risk fines up to 10% of turnover under new laws

Fake reviews could be made illegal under new rules handed to the Competition and Markets Authority (CMA) by the UK Government.

Companies could be fined up to 10% of their annual turnover – or up to £300,000 in the case of an individual – as a penalty for breaching the new rules under the proposed new legislation, the BBC reported.

The CMA’s proposed new powers come as part of new legislation designed to prevent consumers falling into “subscription traps” which see introductory offers replaced by higher cost contracts without appropriate warning.

The average UK household spends about £900 each year after being influenced by online reviews and spends £60 on "unwanted subscriptions", the government said.

Under the new rules it becomes "clearly illegal" to pay someone to write or host fake reviews.

Neil Addley, the founder and managing director of JudgeService, told AM: “We are 100% behind this legislation. We have long argued that the integrity of genuine, verified customer reviews is essential to protect consumers from unscrupulous traders.”

Under new rules related to subscription contracts businesses would have to give clearer information to consumers before they sign up to a subscription contract.

They must also send a reminder that a free trial or low-cost introductory offer is coming to an end, and ensure customers can leave a contract in a "straightforward, cost-effective and timely way".

Prepayment schemes such as Christmas savings clubs will also have to safeguard fully customers' money through insurance or trust accounts with the aim of preventing consumer suffering from situations like the 2006 collapse of Farepak.

Commenting on the news that the Government plans to bring in new laws to combat fake reviews, Jonathan Winchester, the chief executive of customer experience consultancy insight6, said it galvanised the “sad realisation that some businesses opt to buy fake reviews rather than invest in improving their customer experience and generate genuine positive reviews”.

Echoing comments made by Reputation’s automotive director EMEA, Andy Wand, in the AM General Manager’s Guide to Building Your Dealership’s Reputation webinar, Winchester added: “Businesses shouldn’t be afraid of some negative feedback. Managed correctly, it offers an opportunity to learn and improve, resulting in an improved customer experience and new genuine positive feedback.”

“As customer experience specialists within the automotive sector, we’ve come across a similarly worrying trend where customers have felt pressured to provide scores of nine and ten out of ten when asked for feedback on their dealership experience.

“This approach only seeks to tick boxes and trigger internal bonuses – not ensure the highest quality of customer experience is maintained.”