Did you know that posting fake reviews online about a business or professional service provider could land you with a massive fine? In fact, a reviewer was recently ordered by a court to pay $530,000 in damages.

Fake review defames and damages reputation of plastic surgeon

In this particular case, a woman claimed in a Google review that she had been charged for a procedure by a plastic surgeon, but the work had not been done. Even though the surgeon denied the woman's claim, his business dropped by 23 per cent in the week after the review was posted. (See Tavakoli v Imisides (No 4) [2019] NSWSC717.)

The woman received a court order to withdraw the review. This was done, but she posted yet another negative review. The surgeon then took the case to the NSW Supreme Court, alleging both defamation and "injurious falsehood".

The surgeon satisfied the court that the review was not only defamatory (damaging the surgeon's reputation) but also an injurious falsehood, meaning that it damaged his business.

Why online reviews must be monitored closely

If you are a professional or you run a business, it's important to keep an eye out for fake reviews that have been posted online.

The Competition and Consumer Act 2010 requires a business to monitor positive online reviews posted by the business, by friendly reviewers and consumers. This is a check to ensure that such reviews genuinely represent the opinions of those posting them and to prevent consumers from being misled.

Consumers expect reviews to be independent and genuine. The Competition and Consumer Act ensures that consumers get information about products, services and businesses based on the honest experience of other consumers. This is whether the reviews are posted on the website of the business, on social media or on a dedicated review platform.

Penalties exist for businesses which do not remove fake reviews

Businesses can be fined if they do not remove reviews they know to be fake or misleading. (For more information, please see the ACCC website, Managing online reviews.)

These may include reviews posted by the business about itself, or damaging reviews a business posts about its competitors. It also encompasses paying someone or providing them with incentives to write favourable reviews about your own business.

Fines can also be applied if a business selectively removes or amends negative reviews, because editing of this kind will result in consumers being misled.

For instance, in 2011 a removalist company had to pay a $6,600 fine for posting fake online reviews, praising its services on its own website, after it was taken to court by the Australian Competition and Consumer Commission. (Please see the ACCC website, Removalist admits publishing false testimonials.)

Right to complain about negative fake reviews

Negative fake reviews, posted on online platforms over which the business has no control, can be extremely damaging.

Businesses affected by negative fake reviews should seek legal advice, as they have a right to complain to the platform where the review has been published. They can also report the review to the relevant regulatory authorities.

In extreme circumstances, businesses that are the victims of ongoing harassment or serious threats through fake reviews may also consider contacting police.

Geoff Baldwin
Business disputes and litigation
Stacks Champion

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.