How Fake Reviews Hurt Local Businesses

Online reviews have become a cornerstone of consumer decision-making, especially for local businesses. Potential customers often check ratings and read experiences before choosing a restaurant, store, or service provider. This reliance on reviews means that honesty and authenticity are critical. Unfortunately, not all reviews can be trusted.

Fake reviews – whether overly glowing endorsements or maliciously critical comments – have proliferated across major platforms. These deceptive reviews mislead consumers, undermine trust, and unfairly damage honest businesses.

In this article, we explore how fake reviews harm local businesses, examine the scale of the problem, discuss recent legal crackdowns, and provide guidance for both business owners and consumers on navigating this challenge.

The goal is to present an up-to-date, comprehensive overview of the issue with people-first insight and authoritative sources, adhering to the latest E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness) guidelines for quality content.

The Prevalence of Fake Reviews: An Alarming Trend

Online review fraud is no longer a rare occurrence – it’s a widespread problem affecting virtually every review platform. Recent research highlights just how pervasive fake reviews have become:

High Volume of Fakes: Roughly 30% of all online reviews are estimated to be fake. In other words, nearly one in three reviews encountered on the web could be intentionally misleading.

Major review sites struggle to keep up with this volume of fraudulent feedback, despite increased moderation efforts.
Frequent Encounters: 82% of consumers have encountered fake reviews in the past year. This means the vast majority of people who rely on reviews have come across reviews that were not genuine at least once in a 12-month period.

Younger consumers are especially exposed – one analysis found 92% of people aged 18–34 saw fake reviews, compared to 59% of those 55 and older.
Global Economic Impact: Fake reviews aren’t just a minor nuisance – they carry a huge financial cost. It’s projected that in 2025 fake reviews will cost consumers around $787 billion worldwide due to misleading purchases.

By steering customers toward subpar products or services, fraudulent reviews lead to wasted money on things that don’t live up to advertised claims.
Rapid Growth: Alarmingly, the problem is growing. Industry data show that the number of fake reviews is increasing about 12% faster than the total number of new reviews being posted.

Despite platforms removing thousands of fake comments, the influx of fraudulent reviews continues to rise year over year.

In short, fake reviews have evolved from an isolated issue to a mainstream crisis in the digital marketplace. Their sheer volume and growth rate threaten the integrity of online review systems that local businesses and consumers depend on.

Why Fake Reviews Exist: Motivation and Methods

Understanding why fake reviews are so common is key to grasping the damage they do. There are several motivations and methods behind fake reviews:

Boosting Business with False Praise: Some businesses (or their hired marketers) post fake positive reviews to artificially inflate their ratings. The incentive is clear: higher star ratings and glowing comments can attract more customers.

In fact, studies show that fake positive reviews can increase sales by about 12.5% in the first two weeks of a product’s listing. In a five-star rating system, just one additional star can raise consumer demand by 38%. This creates a tempting reward for unethical operators willing to cheat the system.
Harming Competitors with False Criticism: Conversely, businesses may post fake negative reviews about their rivals to sabotage them. These malicious reviews aim to drag down a competitor’s reputation.

The impact can be severe – a campaign of fake negative reviews can potentially cut a business’s revenue by up to 25%. For small local businesses that depend on a good reputation, even a few unjustified one-star reviews can scare away customers and be financially devastating.
Paid Review Brokers and Incentives: A shadow industry of review brokers has emerged, where companies outright purchase positive reviews or offer incentives to real customers for five-star feedback.

During the pandemic, as online shopping surged, as many as 4.5 million retailers were found to have purchased fake reviews via Facebook groups. Some businesses try to incentivize genuine customers with discounts or gifts in exchange for reviews.

However, offering compensation for a review with a particular sentiment (positive or negative) is now explicitly prohibited by regulations. These pay-for-praise schemes undermine the authenticity of reviews and can backfire legally.
Insider and Employee Reviews: In some cases, a business’s own insiders (owners, employees, or their family and friends) may post biased positive reviews without disclosing their connection.

These “astroturfing” practices create a false image of customer satisfaction. Similarly, a disgruntled former employee might leave a revengeful negative review. Both scenarios deceive readers by not revealing the reviewer’s conflict of interest.

New rules now ban undisclosed insider reviews – for example, the U.S Federal Trade Commission (FTC) prohibits company managers and employees from reviewing their own business unless they clearly state their relationship.
Automation and AI-Generated Reviews: Technology is making fake reviews easier to produce. AI-generated fake reviews – where bots or AI tools write human-like comments – are on the rise. These can be churned out in large volumes, overwhelming review platforms.

The FTC’s new rule explicitly flags AI-written reviews by non-existent “customers” as a form of false review that will be targeted for enforcement. Platforms are increasingly using AI themselves to detect unusual review patterns, but the cat-and-mouse game is ongoing.
Review Gating and Suppression: Another tactic some businesses have tried is suppressing or cherry-picking reviews. This might involve pressuring unhappy customers not to post feedback, or even threatening legal action to take down negative reviews.

Such review suppression distorts the overall picture by hiding legitimate criticism. It’s also illegal in many places – for instance, the new FTC rule bars businesses from using unwarranted legal threats or intimidation to prevent or remove a negative review. Authentic feedback, both good and bad, should be visible for a fair representation of customer sentiment.

Impact on Trust and Reputation

Honest local businesses rely on trust and word-of-mouth. Fake reviews directly erode that trust in multiple ways:

Consumer Doubt: As fake reviews become more common, consumers grow more skeptical of all reviews. A recent survey found 67% of consumers worry about the authenticity of online reviews.

If potential customers suspect that a business’s five-star ratings are padded with fakes, they may doubt even the genuine positive feedback. This general atmosphere of doubt means that legitimate businesses lose out, because hard-earned good reviews carry less weight amid fear of fakery.
Loss of Credibility: If a local business is caught with fake positive reviews, the reputational damage can be severe. Review platforms like Google now penalize businesses for manipulative behavior – adding prominent warning labels to profiles that show suspicious review activity.

Imagine searching for a local service and seeing a warning on their Google listing that the reviews might be deceptive. Most people would immediately avoid that business. Thus, any short-term boost from fake praise isn’t worth the long-term hit to a company’s credibility when exposed. Trust once lost is hard to regain.
Negative Bias Effects: Fake negative reviews are especially harmful because consumers tend to believe negative feedback more readily. Paradoxically, while many real negative reviews are truthful, studies show negative reviews are actually more likely to be fake than positive ones.

Nonetheless, readers give them great weight – research from 2025 revealed that participants were significantly more likely to trust negative reviews over positive reviews, even though in reality the negative ones were more often fraudulent.

This “truth bias” toward negative feedback means a single false one-star review can tarnish a local business’s reputation disproportionately. People may assume “where there’s smoke, there’s fire,” and stay away, not realizing the review was maliciously planted.
Snowball Effect on Ratings: For small businesses that only have a handful of reviews, one fake review can swing the average dramatically. A false five-star review might boost a mediocre business unjustly, whereas a false one-star can drag a great local shop from a 5.0 to a 4.0 or lower overnight.

Such swings influence consumer behavior: over half of consumers say they won’t buy a product if they suspect it has fake reviews. Even a whiff of inauthenticity can lead customers to abandon a business listing and look elsewhere, depriving honest owners of patronage.

In essence, fake reviews create an environment where no one knows which reviews to trust. This hurts the honest business owner most – their positive reputation can be undermined by others’ cheating or by unjust attacks, and their hard-earned reviews carry less credibility. Maintaining trust is fundamental to local commerce, and fake reviews corrode that foundation.

Financial Consequences for Local Businesses

Beyond damaging trust, fake reviews have direct financial impacts on businesses:

Lost Revenue from Fake Negatives: As noted, organized fake negative campaigns by competitors can steal business. If a family-owned restaurant or shop is hit with a flurry of unjustified one-star reviews, the drop in its overall rating can lead many potential customers to avoid it.

Lower foot traffic and sales follow. Research indicates a significant revenue hit – possibly around 25% revenue loss – for businesses targeted by persistent fake negative reviews. For a small local business with tight margins, a quarter of revenue gone due to malicious reviews can be crippling.
Misallocated Spending by Consumers: Fake positive reviews might initially draw more customers in, but they often lead to disappointment and demands for refunds or returns when the product or service doesn’t live up to the hype.

This creates wasted expenditures. Globally, consumers are estimated to waste on average $125 per person annually on purchases influenced by fake reviews.

Locally, that might mean people paying for a service that was misrepresented, then leaving with a negative impression of the business once the truth is evident. In the long run, this erodes the customer base and lifetime value.
Marketing Budget Waste: Some business owners feel pressured to “fight fire with fire” by buying fake reviews to compete, especially if rivals seem to be doing the same. This is essentially a waste of the marketing budget on unethical practices.

Any temporary gain in rating can be wiped out if platforms detect and remove the fake reviews (along with real ones sometimes caught in the net). Worse, if punitive actions follow, the money spent on fake reviews yields a negative return.

The U.S. FTC found that a business that purchased fake reviews might see a staggering 1,900% return on investment in increased sales – but that calculation changes instantly when fines or bans enter the picture. The apparent short-term gain can lead to long-term financial penalties and lost future revenue when trust is broken.
Higher Customer Acquisition Costs: With reviews polluted by fakes, genuine businesses may have to invest more in other marketing channels to prove their worth. If consumers don’t trust online reviews, a local business might need to rely on costlier methods like direct mail, promotions, or community events to attract customers.

Essentially, fake reviews can raise the cost of acquiring customers for honest businesses, who can no longer count on organic positive reviews to do the work.
Damage to Local SEO Rankings: Many local businesses rely on appearing in search results (e.g., Google’s local map pack) to bring in customers. Reviews and ratings play a role in these rankings.

If a business is hit by fake negative reviews and its rating drops, it could also slide down in search result prominence. Conversely, if competitors artificially boost their ratings, they might outrank honest businesses.

This distortion means a business might have to spend more on ads or SEO efforts to stay visible. In short, fake reviews can skew the online visibility of local businesses in search and map results, indirectly affecting revenue.

Unfair Competition and a Race to the Bottom

Fake reviews create an unlevel playing field in local markets:

Honest businesses pride themselves on earning positive reviews through good service and quality. But when competitors cheat by flooding platforms with fabricated praise, it puts pressure on everyone to consider unethical tactics.

Those who “do the right thing” are at a disadvantage if bad actors are not caught. This scenario can spark a race to the bottom, where businesses feel they must either join the fake review bandwagon or risk losing out. The overall quality of services can decline when success is driven not by merit but by who can game the system better.

This unfair competition also damages the broader local business community. It erodes the trust between consumers and businesses in general.

A consumer burned by a fake five-star review (for example, hiring a poorly performing contractor who had glowing fake reviews) may become jaded and avoid trying new local providers, sticking only to big, well-known brands.

This hurts legitimate small businesses that rely on winning new customers through their good reputations. In essence, fake reviews poison the well for everyone, skewing consumer choices and rewarding deceit over quality.

Regulators and platforms recognize that left unchecked, fake reviews harm honest businesses and consumers alike. This understanding has driven recent legal developments and enforcement actions to restore fairness – which we will discuss next.

Consumer Harm and Safety Risks

It’s important to note that fake reviews don’t just hurt businesses – they can also lead to real harm for consumers, which in turn circles back to damage trustworthy businesses’ reputations:

Health and Safety Concerns: In sectors like healthcare, childcare, or food service, fake positive reviews can have dangerous consequences.

For example, if a poorly qualified medical clinic plants glowing fake patient reviews and a consumer trusts those, the consumer could end up receiving substandard or harmful care.

Similarly, fake reviews that boost a daycare center or a restaurant with cleanliness issues could put people (or children) at risk. Regulators have highlighted that in areas “where trust directly impacts user safety, fake reviews can result in actual harm”.

A single scandal where customers are misled into a dangerous situation due to fake reviews can severely damage public confidence in reviews for that industry at large.
Financial Scams and Fraud: Some fake reviews are part of larger scams – for instance, fake endorsements for a local contractor who then takes deposits and disappears, or false reviews for a product that is counterfeit.

Consumers who fall victim to these lose money and may blame the platform or the entire local business category. Legitimate businesses then face an uphill battle convincing wary customers that they are genuine. Trustworthy local providers suffer by association with the bad actors.
Erosion of Consumer Trust: Over time, widespread fake reviews can lead to consumer apathy or cynicism. If people feel they cannot trust online feedback at all, they may stop engaging with local businesses they don’t personally know.

This hurts new or lesser-known businesses that rely on reviews to gain visibility. Consumers might stick to known franchises or options, reducing opportunities for local entrepreneurs.

The overall trust infrastructure that reviews provide – helping match good businesses with interested consumers – breaks down, to everyone’s detriment.

In summary, fake reviews introduce hazards and distortions that ripple through the local marketplace, impacting both sides of the transaction. Ensuring authenticity in reviews is not just about fairness, but about safety and maintaining public confidence in the local business ecosystem.

How Platforms and Regulators Are Fighting Back

Given the significant harm caused by fake reviews, both online platforms and government regulators have ramped up efforts to combat the problem. Recent developments show a strong push to crack down on fraudulent reviews:

Major Platforms’ Anti-Fake Review Measures

Leading review platforms and e-commerce sites have invested heavily in detection and removal of fake reviews:

Google: In 2023, Google reportedly blocked or removed 170 million reviews worldwide that violated its policies (including fake and spam reviews). This was a 45% increase in removals from the previous year, indicating a growing effort.

Google also took down around 12 million fake business profiles that year, as fake listings often go hand-in-hand with fake reviews. Google has improved its algorithms and user reporting systems – notably, it has committed to an enhanced reporting function so users can easily flag suspicious reviews or undisclosed incentives.

To deter abuse, Google now imposes consequences: businesses caught buying reviews may get a warning label and lose the ability to receive new reviews, and repeat offenders can have all reviews wiped for 6+ months. These steps aim to protect the integrity of Google’s local business listings.
Yelp: Yelp has long touted its aggressive stance on review fraud. It uses an automated filter to detect suspicious reviews and already has a practice of publicly shaming businesses using fake reviews (through consumer alerts on profiles).

According to data, around 5% of all Yelp reviews get removed for violating guidelines, and an additional 18% are flagged as “suspicious” and not recommended. Yelp’s approach helps warn consumers, but some legitimate reviews can get caught in the filter, which shows how tricky distinguishing fakes can be.
Tripadvisor: The travel and restaurant review platform blocked over 2 million fake reviews in 2023. Those fraudulent contributions accounted for about 6.3% of all Tripadvisor submissions that year.

The company noted that this represented a 50% increase in fake review removals compared to 2022 – evidence that fake reviews had spiked and that moderation efforts had to scale up accordingly.

Tripadvisor has implemented penalties such as reducing a property’s ranking if it’s caught with fake positive reviews, and even pursuing legal action against paid review companies in the past.
Amazon: Although more focused on products than local services, Amazon’s review system heavily influences buyers and third-party sellers. Amazon has escalated its fight against fake reviews through lawsuits and technology.

In 2024 alone, Amazon proactively blocked over 275 million suspected fake reviews from ever being published – an enormous number dwarfing many other platforms, reflecting Amazon’s vast scale.

The company also reports having 8,000+ employees and a $500 million budget dedicated to combating fraud and fake reviews. Amazon has gone so far as to sue thousands of bad actors and even collaborate with other companies (like a joint lawsuit with Google against a fake review broker).

It also formed a Counterfeit Crimes Unit, which recently helped law enforcement prosecute and jail fraudsters who ran a fake review scheme targeting Amazon (and competitors). These actions send a strong message that facilitating fake reviews can lead to serious consequences.
Other Platforms: Niche and regional platforms are also stepping up. Trustpilot, for instance, removed about 3.8 million fake reviews in 2024, roughly 6% of all reviews on its site.

Facebook and other social media also have the fake review problem via business page recommendations; studies have found an estimated 4.9% of Facebook reviews might be fake.

In response, Facebook (Meta) has shut down groups trading reviews and cooperated in some legal actions. Across the board, platforms are deploying better AI detection, stronger user reporting tools, and stricter penalties to discourage review fraud.

Legal and Regulatory Developments (U.S., UK, EU)

Governments have recognized that fake reviews constitute a form of consumer fraud and unfair competition, and they’ve started updating laws and enforcement to address it. Some notable legal developments include:

United States – FTC’s New Rule (2024): In August 2024, the U.S. Federal Trade Commission announced a groundbreaking rule explicitly banning fake reviews and testimonials.

This FTC rule (a Trade Regulation Rule on Reviews) makes it illegal nationwide to create or disseminate fake consumer reviews.

It covers fake positive and fake negative reviews, including those that are: written by someone who doesn’t exist or hasn’t really used the product/service, reviews that misrepresent someone’s actual experience, and reviews by company insiders posing as ordinary customers.

It also forbids buying or selling reviews – businesses cannot pay for reviews expressing a certain sentiment, nor can they procure reviews from employees or family without disclosure.

Additionally, the rule bans practices like review suppression (e.g., threatening customers to prevent negative reviews) and the sale of fake social media influence metrics (like buying fake followers or likes) for deceptive promotion.

The FTC’s rule gives the agency power to seek civil penalties against violators. Each fake review or related deceptive act could incur fines up to about $50,000 per violation. The FTC explicitly noted it wanted to deter AI-generated fake reviews under this rule, keeping the law up to date with technology.

The message is clear: in the U.S., fake reviews are not just unethical – they’re illegal, and businesses engaging in them risk hefty penalties and legal action.
United Kingdom – Digital Markets, Competition and Consumers Act 2024: The UK has moved aggressively to outlaw fake reviews through new legislation. In May 2024, the UK passed the DMCC Act 2024, which among many consumer protections includes a ban on fake and misleading reviews.

Effective from 6 April 2025, it became illegal in the UK to: submit or commission fake consumer reviews, hide incentivized reviews without disclosure, or fail to take reasonable steps to prevent fake reviews on one’s platform.

In short, a business cannot hire someone to write a bogus review, and if they run a site that publishes reviews, they must actively police and remove fakes. Violations in the UK can lead to severe fines – up to 10% of a company’s global turnover (annual revenue) for serious breaches.

The UK’s Competition and Markets Authority (CMA) has been empowered to enforce these rules directly, without needing lengthy court procedures. The CMA has given businesses a short grace period to comply (until July 2025), and has issued guidance on avoiding fake reviews.

Notably, the CMA also struck an agreement with Google in early 2025 to bolster anti-fake review measures. Google agreed to warn consumers on UK business profiles if the business was found using fake reviews and to sanction those businesses and reviewers involved.

The CMA estimates that £23 billion of UK consumer spending is influenced by online reviews annually, so these legal moves aim to protect a huge portion of the economy and ensure a level playing field for honest businesses.
European Union – Omnibus Directive (2022) and Beyond: Across the EU, fake reviews are addressed under consumer protection law.

In May 2022, the EU implemented the Omnibus Directive (Directive (EU) 2019/2161), which among other updates explicitly bans the posting of fake reviews and review manipulation.

Under EU law, it is illegal to “submit or commission false consumer reviews or endorsements” or to misrepresent reviews on online platforms. Online marketplaces and review sites in the EU must also ensure reviews are from real consumers – for example, by verifying that reviewers actually purchased the product or service. If they don’t, they risk fines from national consumer authorities.

Many EU countries have since incorporated these rules into their national laws, meaning a company posting fake reviews can be fined (the exact amounts vary by country, but EU consumer law allows for significant penalties, often a percentage of annual turnover for widespread infringements).

The emphasis is on transparency and verification: platforms should tell users how they check reviews for authenticity. The EU’s stance makes it plain that fake reviews constitute an unfair commercial practice.

Moreover, under the new Digital Services Act (DSA) effective 2024, large online platforms have a duty to address systemic risks like misinformation – which could include ubiquitous fake reviews – or face further penalties. In Europe too, the writing is on the wall: fake reviews are illegal and enforcement is tightening.
Elsewhere Globally: Other jurisdictions are also taking action. For example, Australia treats fake testimonials as a violation of consumer law, and its regulators have fined companies for fake review campaigns.

India issued guidelines in 2022 for online reviews to ensure authenticity and curb fake reviews on e-commerce sites.

Various countries are updating advertising and competition laws to explicitly include fake online reviews as prohibited, recognizing them as a form of false advertising. The trend worldwide is a growing legal consensus that fake reviews are a serious matter.

Real Consequences for Offenders

The stepped-up legal environment has led to tangible consequences for those who engage in fake review schemes:

In the U.S., the FTC has fined companies and individuals (even before the new rule) for posting fake reviews or failing to disclose paid endorsements. Now with the rule in place, we can expect more enforcement cases with substantial fines and orders to cease such practices.
In one high-profile example, Amazon supported criminal investigations that resulted in two major fake review brokers (operating out of China) being sentenced to 2.5 years in prison for fraud schemes involving fake Amazon reviews.

This marks one of the first instances of imprisonment for fake review sellers, highlighting that authorities are willing to pursue criminal fraud charges in egregious cases.
In Italy a few years ago, a man who sold fake TripAdvisor reviews to hospitality businesses was prosecuted and given jail time, sending an early signal that writing fake reviews for money is akin to fraudulent business practice.

Now, with clearer laws across the UK/EU, such cases will likely become easier to prosecute.
Platforms themselves continue to sue fraudulent review providers. In 2025, Amazon won a legal case shutting down a network of 75 websites that sold fake reviews, seizing those domains.

Amazon and Google have filed joint lawsuits against fake review sites to reinforce that this behavior won’t be tolerated. The private sector is partnering with law enforcement to ensure there are serious repercussions (fines, shutdowns, bans, and even jail) for those manipulating reviews.

For local business owners, the takeaway is clear: engaging in fake review practices can lead to legal trouble, including heavy fines or worse. The legal landscape has shifted decisively against tolerating fake reviews, in order to protect consumers and honest competitors.

How to Spot Fake Reviews (Tips for Consumers)

While authorities and platforms work to weed out fake reviews, consumers can also play a role by staying alert. Here are some common signs of fake reviews that shoppers and clients can watch for:

Overly Generic or Over-the-Top Language: Fake positive reviews often sound very broad and enthusiastic without providing specifics. Phrases like “Amazing product! Best ever!!!” without details of why it’s good can be a red flag.

Genuine reviews usually mention specific aspects (e.g. “the air conditioning in the room was broken” or “the pasta was homemade and very tasty”).
Extreme Sentiments with No Middle Ground: Be cautious if a business has a cluster of very extreme reviews – either all 5-stars full of praise or a sudden slew of 1-stars full of outrage – especially if they lack nuance.

A sudden spike of negative reviews might indicate a smear campaign, whereas an overnight jump in glowing reviews could indicate purchased feedback. Look at the timing: fake reviews are often posted in batches rather than a natural flow.
Unfamiliar Reviewer Profiles: Check the profiles of suspicious reviews. Do they have a history of only one or two reviews (possibly created solely to post a fake review)? Do they review across a wide geographic area (e.g., someone reviewing a plumber in New York, a cafe in California, and a salon in London within a short span)?

Such patterns can indicate a paid reviewer or bot. Also, profiles with no personal details or generic names might be less trustworthy.
Repetitive or Similar Wording: If multiple reviews for the same business use very similar phrasing or share unusual words, they might originate from a script.

For example, if three different “customers” all mention a very specific phrase or proselytize in the same way, it could be coordinated. Real customers usually have varied writing styles.
Lack of Detail or Context: A fake positive review might be vague (“Great service, will use again!”) without describing any real interaction.

On the other hand, a fake negative review might make extreme claims without context or evidence (“This place is awful, a total scam!” but giving no specifics of what went wrong). Authentic reviews tend to include some storyline or context about the experience.
Reviewer Distribution and Timing: For local businesses, see if the distribution of ratings looks natural. If a business had mostly moderate reviews but suddenly receives ten five-star reviews in a week from accounts that all started recently, that’s suspect.

Similarly, if a competitor down the street opened and then the first business suddenly got multiple one-star reviews that week from new accounts, it might be foul play. Timing and volume anomalies are clues.

By applying a critical eye and these tips, consumers can better differentiate real feedback from fiction. Many platforms also show if a reviewer is “verified” (meaning they actually purchased or visited) – that can lend more credibility.

When in doubt, cross-reference across multiple review sites if possible; if only one platform has extreme praise or criticism while others are average, it could be a sign of manipulation on that one platform.

If you suspect a fake review, you can usually report it to the platform. Google, Yelp, TripAdvisor, and others have reporting tools for users to flag suspicious content.

With Google’s new measures, there is even a specific option to report reviews that appear incentivized or fake. Crowd vigilance helps keep the review ecosystem honest.

What Local Businesses Can Do to Protect Themselves

For small business owners and marketers, dealing with fake reviews can be frustrating and stressful. However, there are proactive steps to mitigate the harm:

Monitor Your Reviews Regularly: Keep an eye on incoming reviews across all platforms where your business is listed (Google, Yelp, Facebook, industry-specific sites, etc.). Set up alerts if possible. Early detection of a fake negative review can help you respond or report it before it does too much damage.
Report Fake or Violating Reviews: If you identify a review that is blatantly fake (for instance, it describes an incident that you have no record of, or it’s from someone you have no record of as a customer), use the platform’s procedure to dispute or report it.

Provide any evidence you have to the platform’s support team. Many platforms will remove reviews that clearly violate policies (e.g., competitor attacks, off-topic rants, or reviews by non-customers).
Respond Calmly and Factually: In cases where a review might be fake but isn’t removed immediately, consider responding publicly (professionally) to correct misinformation.

For example, “We’re sorry, but we have no record of this customer or incident. We take feedback seriously; if this is posted to the wrong business, please let us know.”

This signals to other readers that the review is questionable. Never harass or threaten the reviewer – that can backfire legally and reputationally (and as noted, threatening reviewers is illegal in some jurisdictions).
Encourage Genuine Reviews from Real Customers: The best defense against a handful of fake reviews is a strong offense of many authentic positive reviews. Remind satisfied customers that their feedback is appreciated.

You might post signage like “Love our service? Please consider leaving a review!” or send a polite follow-up email after a sale.

Do not incentivize the review with rewards – just request honestly. Building a large base of real reviews will dilute the effect of any single fake one and make fakes easier to spot (they’ll stand out as anomalies).
Maintain High Quality and Transparency: Continuously focus on providing excellent service/product quality. Businesses with a strong local reputation offline tend to have loyal customers who will vouch for them online.

If you suspect a smear campaign, often your genuine fans will jump in to defend your business with their own positive accounts. Additionally, be transparent – if you did have a real issue that led to some negative reviews, address it and communicate improvements.

Being responsive and authentic in all feedback, good or bad, builds trust that can withstand the occasional fake review.
Document and Seek Support if Necessary: In a serious case of competitor sabotage or defamatory fake reviews, document everything (screenshots, dates, any patterns).

You may need to escalate to legal counsel if the platform doesn’t act – in some cases posting fake negative reviews can be considered defamation or unfair competition.

With new laws (like the UK’s DMCC Act), authorities might take interest if a business is persistently targeted. Don’t hesitate to inform law enforcement or regulators if you have proof of organized fake review attacks.
Stay Informed on Guidelines: Keep up to date with platform policies and legal regulations regarding reviews. For instance, know that writing your own fake reviews or quietly paying for them can lead to massive fines now in the US and UK.

Educate your staff and any marketing agencies you work with that fake reviews are off-limits and monitor third-party contractors to ensure they aren’t engaging in shady practices on your behalf.

It’s better to have a slightly lower rating that’s genuine than a stellar rating that’s fabricated – the former you can improve over time with real effort, while the latter could implode with one crackdown.

By taking these steps, local businesses can safeguard their online reputation as much as possible and foster trust with their customer base. It’s about playing the long game of integrity rather than short-term tricks, especially now that regulators are watching.

Frequently Asked Questions (FAQs)

Q1. Are fake reviews illegal?

A1. Yes – in many jurisdictions fake reviews are now explicitly illegal. In the United States, the FTC’s 2024 rule bans creating, buying, or selling fake reviews (positive or negative) and allows hefty fines per violation.

In the UK, as of April 2025, it’s unlawful to publish or commission fake or incentivized reviews under the DMCC Act, with fines up to 10% of global turnover for violators. The European Union also prohibits fake reviews via the Omnibus Directive.

In short, posting fake reviews can lead to legal consequences almost everywhere now. Business owners should steer clear of this practice, and consumers caught selling fake reviews (or anyone facilitating them) could also face penalties.

Q2. How do fake reviews hurt customers?

A2. Fake reviews hurt customers by misleading them into poor purchasing decisions. A customer might choose a local service or product based on glowing reviews, only to have a bad experience if those reviews were false.

This can waste money and time, and even pose safety risks in areas like healthcare or home repair (choosing an unqualified provider due to fake high ratings). Fake negative reviews can also scare customers away from good businesses, limiting their options.

Overall, fake reviews erode trust – making customers second-guess all reviews and potentially miss out on quality products or services because the review landscape is polluted with misinformation.

Q3. What are the signs of a fake review I should look out for?

A3. Some tell-tale signs include generic overly-positive language (or excessively harsh negative language) with few specifics, multiple reviews with similar wording or posted around the same time, and profiles that seem inauthentic (new accounts with no other activity, or accounts reviewing businesses in many far-flung locations).

If a review lacks detail about the actual experience or sounds like a marketing blurb, be skeptical. For negative reviews, watch for ones that make extreme claims without context.

Checking the spread of ratings can help – if a business has all 5-star reviews that look copy-pasted, or a sudden cluster of 1-star reviews out of nowhere, those could be fake. Always consider the consensus from multiple reviews and sources rather than trusting one isolated review.

Q4. What should I do if my business gets a fake negative review?

A4. If you suspect a review on your business is fake (for example, it describes an event that never happened or you believe it’s from a competitor or someone who never actually used your service), take a proactive approach.

First, report the review to the platform – most sites have a flag or report function. Provide any evidence to show it’s fraudulent (no record of the reviewer as a customer, etc.).

Second, you may choose to respond politely but publicly, noting that you don’t have evidence this person was a customer and inviting them to contact you to resolve their concerns (often fakers won’t respond). This signals to readers that the review is questionable.

Do not lash out or threaten; remain professional. Encourage many happy customers to leave honest reviews – a single fake will have less impact if you have dozens of authentic positive reviews.

If fake reviews persist as a targeted attack, keep documentation and consider alerting legal authorities or the platform’s support team for further action. Remember, given new laws, regulators are on your side and may act against businesses posting fake negatives about competitors.

Q5. Can a few fake positive reviews really help my business, and is it worth the risk?

A5. While a few fake positive reviews might seem to boost your rating in the very short term, it is absolutely not worth the risk.

Firstly, it’s illegal and against platform policies – if (or rather, when) you’re caught, the fallout could include fines up to tens of thousands of dollars per fake review, public warnings on your profile, deletion of all your reviews, and a destroyed reputation.

Secondly, consumers are increasingly suspicious of overly perfect ratings. A streak of obviously fake reviews can turn savvy customers away, as they may assume your business has something to hide.

Lastly, fake reviews don’t address the real improvements a business might need. Investing in genuine customer satisfaction will earn you real positive reviews that carry far more weight with readers.

In essence, fake reviews are a short-term gimmick with potentially long-term dire consequences. It’s far better to ask for feedback from actual customers and grow your reputation honestly. The trust you build will be much more valuable and resilient.

Q6. How are companies like Google and Amazon dealing with fake reviews?

A6. Major companies are taking multi-faceted actions against fake reviews. Google has implemented stronger detection algorithms and user reporting tools, removing hundreds of millions of policy-violating reviews (170 million removed in 2023 alone).

They now sanction businesses caught using fakes by flagging their listings with warnings and even suspending reviews on those listings. Amazon uses advanced AI and a large team of investigators to block fake product reviews – it stopped over 275 million suspicious reviews in 2024 before they were seen by shoppers.

Amazon also pursues fake review brokers through lawsuits, and has worked with law enforcement to prosecute perpetrators, resulting in some jail sentences.

Both Google and Amazon (along with other platforms like Yelp, TripAdvisor, Trustpilot) are investing heavily in fighting fake reviews, because they know their credibility with users depends on it.

They’re also collaborating with regulators (for example, Google’s agreement with the UK CMA to improve anti-fake processes) and partnering with each other (joint legal actions) to tackle review fraud.

The fight is ongoing, but these companies are continuously updating their systems to detect fake accounts, identify suspicious review patterns, and remove inauthentic content quickly in order to maintain trust in their platforms.

Conclusion

Fake reviews represent a significant and evolving threat to the trust economy that local businesses rely upon. They skew consumer perceptions, reward dishonest practices, and can inflict real financial and reputational damage on hardworking business owners. As we’ve seen, the prevalence of fake reviews is high, but so is awareness of the problem.

Fortunately, actions are being taken: review platforms are investing in detection and removal, and governments around the world (from the FTC in the U.S. to the CMA in the UK and the EU Commission) are enacting rules to outlaw review fraud and punish offenders.

For consumers, the key is to stay vigilant, cross-check information, and not be swayed by reviews that seem too good (or too bad) to be true. For businesses, the mandate is clear – focus on authentic customer experiences and legitimate marketing.

In an era of crackdowns on fake reviews, honesty is truly the best (and safest) policy. A business that builds its reputation organically will not only avoid legal penalties but also earn the kind of customer loyalty that no fake review could ever buy.

In summary, fake reviews hurt local businesses by eroding trust, distorting competition, and misleading consumers, but through combined efforts – ethical business practices, informed consumers, robust platform policies, and strong legal enforcement – the integrity of online reviews can be protected.

Local businesses thrive when they compete on a level field where quality and service, not fraud, determine success. By understanding the impact of fake reviews and supporting measures against them, we can all contribute to a fairer marketplace where both consumers and honest businesses win.