UK businesses could be losing millions of pounds due to receiving fake or malicious reviews, according to industry experts.
Internet review sites allow consumers to write reviews about businesses and their services without any check on whether they are genuine or bogus.
"A single bad review can ruin the chances of gaining new customers and create a long standing, horrible word of mouth campaign offline," said Mark Hall, managing director of UK-based online reputation management agency Got Juice, in a press release.
"If left, the review could quickly lead the company to bankruptcy," he added.
Whether it's a holiday, hotel or restaurant, it is now almost standard practice for a potential customer to visit a website such as Trip Advisor or Yelp and search for a review of the particular business or service he wants to use.
As more and more consumers around the world rely on social media ratings and reviews before making a purchase, businesses are increasingly paying or rewarding people to leave reviews.
Gartner Inc., a leading information technology research and advisory company, predicts that 10 to 15 per cent of all reviews by 2014 will be paid for by businesses.
With the increasing exposure from the media on fake reviews, Gartner believes top companies will face litigation from the US Federal Trade Commission.
It is estimated that 1 in 10 reviews are fake, according to Got Juice.
Although the UK defamation law is in place to protect businesses and individuals from unjust mentions online, this law is difficult to enforce, says Hall, as the vast majority of review sites are based overseas and do not acknowledge the UK law.
However, a case of a guest house manager taking on the might of Trip Advisor was recently highlighted in the Daily Mail.
Richard Gollin, who owns a guest in the Outer Hebrides, is to sue Trip Advisor for a £2,000 loss.
Gollin decided to sue after customers confirmed they had cancelled bookings because of criticism of his guest house on the site. He said that although he accepted genuine criticism, some of the reviews were factually inaccurate and malicious, according to the Daily Mail.
Hall advises businesses that do receive negative reviews not to take it personally and to respond to the customer online calmly.
"A good response would be to offer an apology and an invitation to discuss things in more detail," he said.
He added that arguing or defending your business could lead to more negative comments and an increased chance of the content appearing on the first page of search engine results.
"It may be possible in some cases to remove the negative review or comment, but in many cases this requires professional guidance and management," advised Hall.
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