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Fake Reviews? How the FTC Got Involved, Reached Settlement

The internet era has enabled millions of consumers to get the inside scoop on merchandise they intend to buy through reading online reviews left by prior purchasers. Many of those reviews were written by legitimate individuals sharing their experience with a particular product or service. However other responses may have been left by trolls or people who have been paid to leave certain types of feedback. Although various review controversies have been covered by the media over the past several years, the FTC has just now settled its first lawsuit regarding fake online reviews.

 

The focus of the FTC’s first successful outcome in cases involving false reviews was a company named Cure Encapsulations, Inc. This organization sells a product called Quality Encapsulations Garcinia Cambogia Extract with HCA. The formulation of that supplement was designed to enable users to lose weight through appetite suppression. The product’s manufacturer also claimed that it could effectively prevent the formation of fat cells. Like many supplements, it was not vetted by the FDA and it is not backed by any scientific testing or results.

 

Despite lacking scientific evidence, the product garnered many positive reviews on internet superstore Amazon. During the FTC’s investigation, it was discovered that many of those positive reviews were purchased from AmazonVerifiedReviews.com. Even before this case, many Amazon consumers have sought to avoid fake reviews by instead visiting websites that provide unbiased reviews including an examination of a product’s pros and cons.

 

Although not the same as prosecution or a lawsuit levied by a federal government agency, Amazon has previously sued firms, including the one used by Cure Encapsulations, for publishing false reviews on their site. Amazon has also investigated significant time and resources in ferreting out false reviews and removing them from their site. At this time, Amazon has blocked Cure Encapsulation from continuing to sell products on their site. The supplement company, which sells a majority of its products as an Amazon third-party retail, may soon find itself in an economically negative situation.

 

The company’s attorney, August Horvath, has pledged to work with Amazon to find an amicable solution. Horvath also says that the company has not solicited or benefitted from fake reviews since the middle of 2015. Nevertheless, the FTC pursued charges of deceptive marketing against the organization, both for fake reviews and making unscientifically based claims as to their product’s efficacy. Terms of the settlement reached have not been released and will likely be subject to non-disclosure agreements.

About The Author
Jacob Maslow The senior editor of Legal Scoops, Jacob Maslow, has founded several online newspapers including Daily Forex Report and Conservative Free Press. He also works as an Online Marketing Consultant providing web marketing services.