Fake Online Reviews Linked to $152 Billion in Global Purchases

Fake online reviews are responsible for an estimated $152 billion in purchases, according to a new study based on data shared by major e-commerce sites.

Customer acquisition security vendor CHEQ teamed up with the University of Baltimore to produce its Fake Online Reviews 2021 report — part of what it claims to be the “first-ever in-depth economic analysis of the full scale of internet harm.”

The report’s headline claim is based on an average rate for fake reviews of 4% across platforms including Amazon, TrustPilot, Yelp and Tripadvisor, and an estimated global e-commerce market size of nearly $4.3 trillion in 2020.

It breaks down to around $28 billion of consumer spending in the US influenced by fake reviews, $6.4 billion in Japan, $5 billion in the UK, $2.3 billion in Canada, and $900 million in Australia.

In the US, travel and fashion (both around $4 billion) are the sectors most affected in purely financial terms, followed by electronics ($3 billion), furniture and homeware ($2 billion) and entertainment ($1 billion).

The report reveals the sheer size of the underground trade in five-star reviews, which it claims are charged at anywhere between 25 cents to $100 per review. Reviewers may be encouraged to purchase an item for ‘review’, which they are then reimbursed for and allowed to keep, sometimes in addition to a commission.

This was the kind of scam uncovered by researchers recently when they discovered a misconfigured database containing the personal details of around 200,000 such reviewers.

However, the same kind of thing is increasingly done by ad fraud bots which are signed up via travel, e-commerce paid search and social campaigns, the report claimed.

Overall, the impact could be to diminish customer trust in online reviews, and therefore in e-commerce itself, and to unduly harm businesses whose rivals have posted fake negative reviews about them online.

“Given the size of the market, the ease of entry and the immediate economic benefits, bad actors remain highly incentivized to engage in fake reviews,” argued report co-author Roberto Cavazos at the University of Baltimore.

“This complex market is adversely influencing our purchases, causing significant economic detriment, creating real revenue losses for businesses, and severely diminishing trust in online purchasing.