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FTC Issues Fine of $12.8 Million to Seller on Amazon over Fake Reviews

February 27th, 2019

Finally, some justice!  Well, sorta.  According to the official announcement, they won’t have to pay the $12,845,724 fine if they first pay $50,000 and “catch up” on any unpaid taxes.  However, if they’re caught lying about their taxes, the whole amount will come due.

There’s a few more terms of the settlement.  My favorite is this:

The order next requires the defendants to email notices to consumers who bought Quality Encapsulations Garcinia Cambogia capsules detailing the FTC’s allegations regarding their efficacy claims. In addition, the order requires the defendants to notify Amazon, Inc. that they purchased Amazon reviews of their Quality Encapsulations Garcinia Cambogia capsules and to identify to Amazon the purchased reviews.

They have to email all their customers and tell them that they lied to them about the product claims.  That’s going to be awkward.

They also must notify Amazon about which reviews are fakes they paid for.

The Complaint

There’s some gold nuggets in the actual court filing.  Here’s an interesting part about an email that was sent from the seller to the operator of the website “www.AmazonVerifiedReviews.com”.

On October 8, 2014, Jacobowitz wrote to the operator of the Amazon Verified
Reviews website:

As I told you yesterday, I need 30 reviews 3 per day.
Because of my upcoming holiday, I will not be able to watch my reviews
not to get sabotaged by competition.
The goal of my competition is to bring me down to a 4.2 overall rating,
and I need to be at 4.3 overall in order to have the sales.
I am sending you now another $200 and will pay you total of $1000
additional to the cost of the reviews if you stand on the product, and make
sure the next 12 days if someone post a negative review you add real
positive reviews from real aged accounts (no proxy vpn vps) to make it
back to a 4.3 overall.

He then wrote a few minutes later, “Please make sure my product should stay a five star.”

Furthermore, you can see a list of over a dozen examples of screenshots that AmazonVerifiedReviews sent to the seller as confirmation of the reviews they fraudulently created for the product.  Here’s an example (does this look overtly fake to you??):

“I started to using this product 2 months ago and I have lost 15 pounds already. Don’t get me wrong, I was originally 150 pounds and 5’6. I haven’t felt dizzy or anything as these 1-star reviews said, which I was worried at the beginning. Will definitely keep buying!” (Amazon five-star review posted October 28, 2014).

 

ReviewMeta’s Report

Looking at our report for the product in question, we already begin to see some warning signs:

Screen Shot 2019-02-27 at 9.01.38 AM

First off, we see that there’s a MAJOR reduction in the number of reviews.  12,000 to 1,000?  That’s a lot.  What’s going on here?

Screen Shot 2019-02-27 at 9.02.50 AM

There’s so many deleted reviews, we don’t have enough room to display the full number.

Also, look at the first note: “While Amazon.com claims 12,808 reviews, we counted 3,992 available on their site.” If you actually go to the product listing page and try to read all 12,000 reviews, you’ll find that you can only actually find 3,992.  I’m assuming this is due to a bug on Amazon’s site when tons of reviews are deleted and the review count isn’t refreshed.  Or it could be that many reviews are hidden from view but not fully “deleted” from Amazon.  No telling exactly what’s happening here.

A Step in the Right Direction

This marks the first time the FTC has taken action against a seller on Amazon (or for anyone creating fake reviews for any independent platform for that matter).  It’s a great first step, but also somewhat sad to see that it wasn’t until 2019 that the first person got in legal trouble for posting fake reviews to Amazon.  Also, it’s somewhat disappointing to see that the fine will only be $50,000 – likely a tiny fraction of the profits they made by cheating and blatantly deceiving customers.

Hopefully, this will instill some well-needed fear in those who continue to engage in these illegal and unethical practices.


  • TPS

    Finally! I wonder how quickly these prosecutions will gain momentum.…