Yelp (YELP) might have to reconsider its classic slogan, “Real People. Real Reviews.”
Sure, the people might be real, but apparently one-fifth of all the reviews are big, fat phonies.
The number of fake reviews on Yelp rose to 20% in 2013 from only 5% in 2006, according to a new report out of Harvard Business School.
The study, which we found on Market Watch, comes hot on the heels of The New York Attorney General’s bust of 19 companies that specialize in publishing fraudulent online reviews, a process called “astroturfing.”
These companies hire freelancers from places like the Philippines, Bangladesh, and Eastern Europe to write fake reviews for $1 to $10 each, and The Attorney General’s Office slammed them with combined fines of more than $350,000.
But this big reveal just scratched the surface.
“The problem is definitely more widespread than the Attorney General’s investigation,” the new report’s author, Michael Luca, warned Market Watch.
The rush for rave reviews may be growing as more businesses realize the power of Yelp’s 108 million monthly visitors. Boosting a restaurant’s rating on Yelp by even one star can increase its revenues by as much as 9 percent, according to a different study that Luca published in 2011.
So, what’s an honest Yelp user to do?
Pay close attention to the language and source of both one and five-star reviews, as those extremes are more likely to be fake. Also, Yelp tries to weed out professional reviewers by encouraging people to post with their real names, so if you spot an extremely sunny or negative review from a nicknamed user, proceed with caution.