By Brooke Vixamar
Pipl
Fake reviews sabotage trust in marketplaces for both consumers and businesses. Even though consumers heavily rely on reviews to make purchase decisions about products and services, they don't completely trust them. The majority of consumers report being suspicious of online reviews in general, and consumer trust may continue to erode as they encounter an increasing number of fake reviews.
Scammers, fraudsters and bad actors thrive in contexts troubled by uncertainty and doubt, and online marketplaces are a target-rich environment. The problem is so pervasive, the limited resistance attempted by many organizations has minimal effect on the overall volume of fake reviews. Some consumers may remain loyal to a platform, oblivious to and manipulated by the rampant subterfuge. But many others are more internet-savvy and will turn elsewhere to engage online and conduct their business.
How do organizations stop the fakers without throwing more (and expensive) resources at the problem? How do they defend their platforms without adding friction to the CX—at the risk of losing even more good consumers? How can marketplaces restore faith in reviews? The key lies in identity trust.
A new research survey of local business reviews on sites including Google, Facebook, Tripadvisor and Yelp from U.S.-based consumers showed that in 2021, 81 percent of consumers used Google to find and evaluate local businesses via online reviews.
Yet consumers are also skeptical of the big-name hubs for reviews, citing Facebook as one of the top sources of fake reviews (bit.ly/3fK5yj7). How do consumers know if a review is fake? It's extremely difficult to tell. Some may be excessively praising, others may be suspiciously similar to a lot of other comments and others may be posted by someone using an obvious pseudonym.
As a result, consumer skepticism is high—the same local business survey shows 91 percent of consumers believe they may have read a fake review in the past year—which certainly doesn't clarify decision making.
For businesses, fake reviews represent risk—to reputation, customer satisfaction, revenue and their ability to measure performance. Reviews are a powerful source of feedback for analyzing market performance and measuring customer satisfaction. They can bring product issues to light, provide insight into new use cases and inform innovation. Positive reviews indicate high customer loyalty and create a competitive advantage. They also directly affect SEO ranking and increase online visibility to new prospects.
On the other hand, poor reviews are devastating. According to a UK digital strategy consultancy, one negative review drives away 22 percent of prospects. Three negative reviews drive away 59.2 percent, and four negative reviews can cost a company 70 percent of its potential customers (www.kaweb.co.uk).
This illustrates the complexity of the predicament for marketplaces: Fake reviews still wield powerful influence over large portions of consumers, even as many who are more scrutinizing have lost faith in the platform's integrity. Without a way to determine which posters are real with a legitimate issue and which are bad actors, businesses pay a steep price without gaining any actionable insight for improvement.
Reviews are powerful double-edged swords, and that's why fakes are on the rise—they're highly profitable. According to digital location marketing service Uberall, a brick-and-mortar business that increases online star ratings by 0.1 percent through positive reviews improves conversion rates by 25 percent (see The Ultimate List of Online Review Statistics for 2022, Findstack, 2022). The Federal Trade Commission has shown that paid-for fake reviews deliver a 20X payoff. In just one case, a $250,000 outlay on fake reviews generated more than $5 million in sales.
Fake reviews also deliver fast, long-lasting results. Fresh fake reviews significantly increase organic search position and sales rankings for up to four weeks—even after they are detected or deleted. Finally, bad actors using fake reviews can gain a positive (although just as fake) reputation faster than by using traditional methods.
Who's behind fake reviews? It's more than just a few disgruntled customers or ex-employees. There's an entire standardized industry behind fake reviews with formal groups, commission structures—even loyalty schemes. Data security provider Cheq reported that payments will change hands for anywhere from 25 cents to $100 per review. Private groups on Facebook solicit buyers to purchase products and leave five-star reviews in exchange for a full refund and, sometimes, a $5 to $10 commission.
In 2021, a database leak exposed more than 200,000 people in a scam involving Amazon vendors exchanging free products for fake reviews (see bit.ly/3EaZutr). Reviewers received lists of products, bought a product and posted a review. There were even instructions provided on how to avoid Amazon fraud detection. Once the review was verified by the seller, the reviewer was reimbursed through PayPal instead of through the Amazon platform.
Other investigations have uncovered bulk packages of 1,000 reviews selling for $11,000 with "review rings" also enrolling in loyalty schemes to ramp up output. In other cases, fake reviews are being weaponized. Like ransomware, cybercriminals threaten ecommerce sites that online ratings will drop to one star if payment demands aren't met.
All is not gloom and doom however. First, the vast majority of individuals leaving reviews, whether positive or negative, are real people without an axe to grind. Marketplaces that can verify the identities of their users—at any point in their journey, across all points and over time—can quickly identify trustworthy customers and suppliers. In turn, they improve the integrity of their platforms while reducing risk and exposure to bogus reviews, scammers and fraud.
Trusted identities require verification of both individual identity attributes and the connections between numerous data points with a high degree of confidence. Street addresses, phone numbers or credit card numbers are no longer enough to establish trust. Much of that data is readily available on the dark web and used for nefarious purposes. Better quality data and deeper insight are required.
Trusted identities are built over time as people continuously add to their digital data footprints. They're made up of multiple traditional identifiers, such as name, address, phone number and credit card numbers, as well as online identifiers like email addresses, social usernames, IP addresses and device identifiers.
Trusted identity data is also dense. It's collected from multiple online and offline sources—confirmed and corroborated by multiple open source intelligence (OSINT) data sources from around the world. Finally, people who know each other leave digital traces of those connections. Trusted identities exhibit connections with other people, organizations and places.
Scammers and bad actors can try to impersonate legitimate customers, but they can’t create trusted identities. The ability to quickly and easily separate them from a population of trusted customers and users makes it far easier to prevent them from operating. When a marketplace or business can identify trusted customers, it can restore users' confidence in their platform. Trust is a valuable coin of the marketplace realm and the imperative for maintaining marketplace integrity. 
Brooke Vixamar is the Director of Product Marking at Pipl. Having spent most of her career in fraud prevention and financial services, Brooke is proud to be a part of the trailblazing work Pipl is doing to create a future where everyone can safely do business online with identity trust. Contact Brooke at www.linkedin.com/in/brookesnelling/.
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