These days, it is not new to do fake reviews on Amazon. Although Amazon has been cracking down on sellers who violate the rules by fake reviews, it has not defeated the “fighting spirit” of some sellers to do so. Nowadays, the phenomenon of fake reviews is still common, and even some big sellers are doing it.
It should be noted that the risk of fake reviews is getting bigger and bigger now, not just on Amazon. Consumer complaints and some media investigations may expose that you may be caught one day. In serious cases, you may be sued and face huge fines. Now, another seller on Amazon has been complained about fake reviews and has now been sued in court…
Amazon seller sued for fake reviews
Sellers’ Home learned that according to the latest foreign media reports, the Federal Trade Commission (FTC) announced on Tuesday evening local time (this) that the agency has successfully filed the first lawsuit in history against the use of fraudulent, paid Amazon reviews to falsely advertise online products.
The company being sued is called Cure Encapsulations Inc. (based in New York) and is owned by Naftula Jacobowitz.
The company is accused of misrepresenting the effectiveness of the weight loss supplement “garcinia cambogia” and hiring and paying third-party websites to write and post fake 5-star reviews on Amazon. The supplement is made from a plant native to Indonesia that is widely misrepresented as helping with weight loss but is actually known to cause acute liver failure.
In addition, Sellers’ Home also learned that according to the FTC’s complaint, Cure Encapsulations sold pills containing garcinia cambogia, a tropical fruit also called brindleberry that is sometimes used as a “natural” weight loss pill. Called Garcinia Cambogia by Mass Encapsulation, the pills were sold only on Amazon.
According to Sellers’ Home, as early as October 8, 2014, Jacobowit Jacobowit sent an email to the operator of a website called www.amazonverifiedreviews.com, saying that he would pay a total of $1,000 for 30 reviews, 3 per day, with the goal of raising its 4.2 rating to 4.3, which the company claimed was necessary for sales and also wanted its products to “remain 5 stars.” The review site then published a series of false 5-star reviews praising the pills.
Not only that, Sellers’ Home also learned that there were reviews claiming that the supplement was a “powerful appetite suppressant” that “actually prevented the formation of fat.” The FTC found these claims to be false and without evidence.
Details of Cure Encapsulations’ lawsuit by the FTC:
FTC Director Andrew Smith said in a statement:
“When a company buys fake reviews to boost its rating on Amazon, it hurts both consumers and companies that follow the rules.”
The company will face a fine of $12.8 million
Sellers’ Home learned from foreign media reports that the FTC and the company reached a settlement within a week. As part of the settlement, Cure Encapsulations has agreed to no longer make “descriptions such as weight loss, appetite suppression, fat suppression or disease treatment” for any dietary supplement, food or drug unless the company has “capable and reliable scientific evidence in the form of human clinical trials” to support its claims.
At the same time, the settlement agreement also prohibits the company from making false statements about endorsements, including comments or testimonials from real customers who purchased the product.
In addition to the above requirements, the proposed settlement includes a $12.8 million judgment, which will be suspended after paying $50,000 and some unpaid income tax obligations to the FTC, and the remaining fine will be used to enforce the judgment later.
Amazon responded to the case
In an interview with foreign media, Amazon responded through a statement:
“We welcome the FTC’s action. We have invested a lot of resources to protect the integrity of product reviews on our platform because we know that customers value the insights and experiences shared by other shoppers. Even an untrue review is not allowed. We have clear participation guidance policies for reviewers and selling partners, and we suspend, ban and take legal action against those who violate our policies.”
It is worth noting that the FTC also announced that it will set up a working group of 17 employees to monitor and take action to combat anti-competitive behavior in the US technology market.
Finally, what Sellers’ Home wants to say is that no matter what industry you are in, everything you do now is compliant, and the same is true for Amazon. Therefore, you must avoid frequently touching Amazon’s red line. If you want to do well on Amazon, you need to do more product research, control product market demand and quality, and do more marketing and promotion to give you a chance to stand out.