Technology

Fake reviews: Watchdog targets Australian cleaning company Electrodry

The consumer watchdog is taking legal action in the Federal Court against an Australian cleaning company it says was involved in posting fake testimonials about its business on the internet.

The company, Electrodry, has more than 100 franchises and provides carpet, drapery, grout, upholstery and mattress cleaning services, the Australian Competition and Consumer Commission (ACCC) said.

The ACCC alleges that a contractor for Electrodry, acting as its agent or at its direction, made false or misleading representations by posting the fake testimonials relating to Electrodry on the internet.

The ACCC also alleges that the company induced or attempted to induce its franchisees to make false or misleading representations by posting fake testimonials on the internet.

The fake testimonials allegedly appeared on a number of sites, including Google, True Local and Word of Mouth. It is alleged that the testimonials were written and posted by people associated with, or contracted to, Electrodry, and not by its genuine clients as the testimonials implied.

"While online testimonials can be a useful and genuine marketing tool, it is important that online businesses understand that making or inducing false or misleading representations about testimonials breaches the Australian Consumer Law," ACCC deputy chair Michael Schaper said.

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The ACCC is seeking declarations, penalties, injunctions and corrective notices from Electrodry.

Electrodry has been contacted for comment.

The ACCC promised it would target misleading reviews in 2012 and has been working on investigations with state and territory fair trading authorities across Australia.

It has set guidelines for businesses to manage online reviews.

So far, it has taken issue with three companies over fake reviews. Australian removalist Citymove paid a $6600 fine in November 2011 and provided a court enforceable undertaking after publishing false consumer testimonials on its Moving Review website.

Euro Solar and Worldwide Energy and Manufacturing, formerly trading as Australian Solar Panel, paid combined penalties of $125,000 for publishing fake testimonials and making false or misleading representations about the country of origin of the solar panels supplied. The sole director of both companies, Nikunjkumar Patel, was also ordered to pay a $20,000 penalty for his involvement.

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