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Fake competitor reviews causing “stress and trouble” for over one third of Australian business

Dominic Powell /

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Matchboard founded Sharon Melamed. Source: Supplied.

Aussie SMEs are suffering from fake negative online reviews, with a recent report from Australian business directory website True Local showing 38% of businesses have experienced fake reviews.

The survey, which received responses from 300 Australian business owners and more than 1000 Australian consumers, also revealed one third (33%) of business owners have seen competitors leave fake or negative reviews about their business or services.

Businesses on the larger end of the spectrum are more likely to have received negative online reviews, with 64% reporting this, however, small businesses are more likely to suffer from fake competitor reviews.

Founder of Sydney-based business-supplier matching business Matchboard, Sharon Melamed, tells SmartCompany she’s had recent issues with fake reviews, but surprisingly not of the negative sort.

“I was seeing some of my close connections post glowing five-star reviews of my service on Google, which I really appreciated,” Melamed says.

“But I actually had to contact them all and ask them to remove the reviews, as they’d never actually used my platform.”

Melamed has also received a number of false endorsements on websites such as LinkedIn from people she has never met nor spoken to, which she says “doesn’t sit well” with her, because she wants her business to be presented objectively.

Working with a number of clients on both the business and supplier side, Melamed has seen many businesses struggle with false reviews, and believes it’s time for the government to step in and notify consumers about the impact.

“I think the government or the ACCC should run a ‘get real’ campaign to let consumers know about the impact of fake reviews on a business because I’ve seen how much stress and trouble they can cause business owners,” she says.

According to True Local’s survey, 76% of businesses said they believed a mix of positive and negative reviews to be a good thing, which Melamed agrees with.

“There’s nothing wrong with negative reviews, as long as they’re authentic. It’s a mistake for businesses to delete negative reviews – customers will have different experiences, it’s only natural,” she says.

Eighty percent of businesses said they reply to negative reviews with either an apology or an explanation, which appears to sit well with shoppers: Nine out of 10 consumers said they felt more positively about businesses which responded to negative reviews.

Consumers are also on board with ensuring reviews are authentic, with 79% of those surveyed saying they support review websites screening out fake reviews. Additionally, 69% said they think companies should not be able to post about competitors on review websites.

The Australian Competition and Consumer Commission’s Competition and Consumer Law Act 2010 stipulates fake or misleading reviews, and those relating to competitors are in breach of the Act.

Melamed advises businesses to not jump to conclusions when negative reviews pop up, saying SMEs should investigate them first, and then take action when they have some certainty about their authenticity.

The ACCC provides various guidelines regarding fake and misleading reviews on its website.

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany. Email him at [email protected].

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