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20% of Yelp Reviews Are Fraudulent

 
          How many of the Yelp reviews you read would you guess are forged by the companies being reviewed? MarketWatch reports that 20% of Yelp reviews are fraudulent, typically written by freelance writers from the Philippines, Bangladesh and Eastern Europe who receive between $1-10 for each review. New York attorney general Eric Schneiderman eventually stepped in with "Operation Clear Turf," a year-long investigation that is culminating in an agreement with 19 companies to stop their practice of forging reviews. The companies will also have to pay more than $350,000 in fines for astroturfing and false advertising.
 
 
           Although Yelp clearly states in its rules that paid reviews are forbidden, the problem has only gotten worse -- fake reviews only made up 5% of Yelp's content in 2006, according to a study by Harvard assistant professor Michael Luca.
 
 
          "Our findings suggest that unethical decision making is a function of incentives, rather than of unethical businesses," Luca writes. "Organizations are more likely to game the system when they are facing increased competition and when they have poor or less established reputations. For managers, policymakers, and even end-users investigating review fraud, this sheds light on the situations where reviews are most likely to be fraudulent. More generally, this casts light on the economic incentives that lead organizations to violate ethical norms."
 
Courtesy of Jacob Seigal
See more at http://bgr.com/2013/09/25/fake-yelp-reviews/
 

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