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Edmunds.com sues company for fake reviews of car dealerships

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Auto-information website Edmunds.com sued a company that allegedly posted more than 60 fake reviews of car dealers.

Santa Monica-based Edmunds screens every review consumers post on its website, and in early February, the moderators began noticing a pattern among reviews of about two dozen dealers. Within a month,  Edmunds determined several reviews were coming from a single source. Email addresses of 2,000 member accounts traced back to Humankind Design Ltd., which operates Glowingreviews.co out of Galveston County, Texas.

“The reviews were obviously not coming from the variety of sources and locations being stated,” Edmunds chief general counsel Ken Levin said.

So as not to tip off fraudsters, Edmunds would not discuss what clues lead them to believe a review is fake. But Levin described the fake reviews in this case as being “short and not too specific” and unbalanced.

“They are just glowing,” he said.

The lawsuit was filed in Texas on Tuesday. Among other things, the lawsuit accuses Humankind Design of fraud and breach of the Edmunds.com membership agreement.

Online reviews have become a major factor in consumer decision-making, with businesses failing on negative ratings. Reputation management and public relations firms have popped up to help businesses improve their online identities.

Digital Air Strike, a company that sells these sorts of services, found in a consumer survey released in May that online reviews were the most helpful factor in deciding where to buy a car. Edmunds was the second-leading destination that buyers visited.

Edmunds, which provides consumer information about car shopping,  has not yet reached out to the dealers who were reviewed by Humankind, so it’s not sure to what extent they were involved.  

"We're not sure if they were complicit or if they were victims too," Levin said.

Last month, Yelp also sued a pay-for-reviews website. The popular business-search portal accused BuyYelpReview.com of posting fake reviews in violation of Yelp’s terms of service.

Edmunds, which is seeking to shut down Humankind’s review service and receive monetary damages, is bringing a similar case. The lawsuit states that Humankind violated Edmunds’ membership agreement by posting bogus reviews and defrauded fellow members with those reviews. Humankind could not immediately be reached for comment.

Levin said Edmunds chose to invest in litigation after much deliberation to protect its readers. The website registers about 4,000 reviews a month and has 10 million to 20 million visitors a month.

"If we sent them a request to stop, they might have just started up again in a couple of months or have found a better way to hide what they are doing,” Levin said.

Glowingreview’s website says that it can post reviews to many other local search pages, including Google+, Yelp and cars.com. Edmunds plans to reach out to those companies and government regulators too.

“There’s a real opportunity to purify consumer reviews,”  Edmunds spokeswoman Jeannine Fallon said.

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Copyright © 2014, Los Angeles Times
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