The New York Attorney General recently sued a moving services broker, alleging that the company operated illegally and also used fake online reviews to promote the company. The NYAG obtained a court order permanently banning the broker from operating the business and imposed $65,000 in penalties and costs.
The NYAG alleged that the broker, operating as Pan-American Relocation Services, AAA Moving Services, and Mayflower Moving Services, paid for fake positive online reviews to make consumers believe that they were dealing with qualified moving companies. The broker posted the reviews on his companies' websites under the heading, "CHECK OUT OUR REVIEWS POSTED BY CUSTOMERS JUST LIKE YOU," when none of the reviews were, in fact, made by actual consumers.
The NYAG is clearly worried about online reviews generally. In announcing the action, the NYAG warned that, "Consumers are advised to thoroughly vet any moving company they are considering hiring, even if the company has many positive online reviews."
The NYAG also alleged that the broker was operating illegally. The NYAG said that the company misled consumers into believing they were dealing with actual moving companies, when, in fact, the company was only a broker. The NYAG alleged that the company, once it received an order, then would go out and hire an unaffiliated mover for the job -- ones that were often poorly reviewed, disreputable, and unlicensed.
While it's yet another case that emphasizes that the NYAG is stepping up its consumer protection efforts, it's also an important reminder that endorsement-related issues continue to be a focus of consumer protection authorities.
While much of the current enforcement related to the FTC's Endorsement Guides is on disclosure of material connection, sometimes the issue is not about disclosure at all. Even without the allegations of fraudulent moving services, this isn't likely a case where the problematic consumer reviews could have been fixed with a disclosure. That's because the reviews were alleged to be fake. Even when you're paying a spokesperson to endorse a product, or incentivizing a consumer to leave a review, the opinion that they're giving still has to be real. As the Endorsement Guides say, "Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser."
"My office has zero tolerance for scammers who attempt to defraud and deceive New York consumers" -- Attorney General Barbara D. Underwood