Today, more than ever, consumers are relying heavily on online reviews when making purchase. This is particularly true in the automobile industry. Online reviews are supposed to be a simple way for customers to give their informed opinion and experience with a recent purchase. When it comes to reviews on cars and automobiles, Edmunds.com is the most popular review website.
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Edmunds allows reviewers to post comments and reviews on vehicles of a variety of makes and models. These reviews are supposed to be honest experiences from customers, and Edmunds works hard ensure that the reviews are real and honest opinions from people who have actually purchased the vehicle. Edmunds tries to ensure the validity of each review by having employees hand screen every review. While this method may be tedious, it proved effective earlier this year when an employee detected fraudulent reviews traced back to a Texas company named, Humankind Design Ltd.
Humankind is an online reputation management company. Upon the discovery of the fake reviews, Edmunds sued Humankind for fraud and breach of contract, claiming the company created 2,200 face accounts as a means to post phony positive reviews on Edmunds.com. The lawsuit was settled in July of this year for an undisclosed monetary amount, and with assurances from Humankind to provide Edmunds with all the phony account information the company created.
Humankind is no longer allowed to post any reviews on Edmunds and while Humankind owner Justin Anderson declined to make a statement, a press release by Edmunds stated that its website was not the only site in which Humankind posted phony reviews. Edmunds claimed that the company would share information with Yelp, Foursquare and Google+ since Humankind may have also posted phony reviews on through these websites.
Edmunds was able to catch Humankind’s fraud because the website is particularly diligent about reviews and customer postings. While other sites that allow for customer reviews may not be as stringent as Edmunds, a recent study found that sites that allow online reviews are not as filled with phony or fake reviews as some would have you believe.
The Atlantic Wire’s Rebecca Greenfield reported on the findings of a study of online reviews. Greenfield writes that the overwhelming majority—95% of the 325,869 reviews studied—are actually written by people who purchased the item or service they are reviewing. Thus, a mere 5% of the reviews were considered “fake.” Furthermore, the study revealed the fake reviews were not actually from competitors of the company who makes the products, but were actually written by customers who purchased other products, just not the product they were reviewing.
While the majority of the phony reviews were actually positive reviews, the study concluded that negative reviews do have an overall impact on sales. The more negative reviews a product receives the more harm done to sales. Unfortunately, this study did not study car dealership reviews, but it does reveal that online reviews are pretty reliable.
Overall, this incident showed that Edmunds is one of the most reliable and dependable sources when it comes to car dealership reviews. The company’s painstaking policy of having employees sift through reviews helped the company to put an end to Humankind’s fraud and helped alert other sites to possible fake reviews that Humankind may have posted.
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