The Federal Trade Commission (FTC) and six states are suing Roomster, alleging the roommate pairing app used fake positive reviews and fake listings to lure new customers. The company is accused of buying 20,000 fake customer reviews.
According to a court filing, the defendants “have inundated the internet with tens of thousands of fake positive reviews to bolster their false claims that properties listed on their Roomster platform are real, available, and verified.”
The plaintiffs assert those reviews were dripped out in a steady stream to help boost the Roomster’s standing in app stores like Apple and Google Play.
Roomster denied the allegation that they directed an independent contractor to post fake reviews.
“To be clear, there is absolutely no merit to the FTC’s allegations,” Roomster co-founder and CEO John S. Shriber wrote in a response. “In fact, we are proud of the many reviews Roomster has received over the course of our nearly two decades in business. While most of them have been positive and recognized the valuable service that Roomster provides, some have been negative, providing constructive (and sometimes less constructive) feedback.”
The lawsuit is shining a light on the larger problem of fake reviews that can be found all over the internet in every industry.
“It’s been around with us almost as long as user reviews have been online. What’s new now is the organized nature of it,” John Breyault, vice president of public policy for the National Consumer League said. “As you saw in the Roomster case, the scammers are getting very organized and are able to spread literally thousands of user reviews across various platforms to make products or services look more attractive than they actually are.”
A study by the University of Baltimore found that in 2021, fake reviews influenced $28 billion in consumer spending in the U.S. and $152 billion around the world. The study said the rate of return is worth the cost. The FTC found in one case, a company spent $250,000 on fake reviews which helped generate $5 million in sales.
“And if that trust gets eroded, we think that there are real damage to be done to consumers. Not just in money lost when you buy, you know, a product thinking that it has five stars, when in fact it’s a piece of junk. It could also lead to consumers buying unsafe or even dangerous products,” Breyault said.
The problem is expected to get worse with the advent of AI platforms because that could cut out the need to hire someone to write the reviews.
“So it’s not hard to imagine a scammer going to ChatGPT or another generative AI platform and saying, ‘hey, write me 100 unique user reviews about product x, y and z,’” Breyault said.
The National Consumer League suggests checking multiple sources to ensure that a user is getting is exactly what they think it is.
“Read reviews across multiple platforms. If you have friends or family that you trust, ask them if they’ve ever been to one of these places. Certainly there are places like Consumer Reports, the Better Business Bureau that consumers can check to try and gather as much information as they can before they make a purchasing decision,” Breyault said.