Automobile-information website Edmunds.com is suing a company that it says posted more than 60 fake reviews of about two dozen car dealers.
The reviews, which were posted on Edmunds' website, were favorable to the dealerships and came from a single source, Edmunds said in its lawsuit filed Tuesday. Eight of the dealerships are in the Los Angeles area, Edmunds said.
"They are just glowing," said Ken Levin, chief general counsel for the Santa Monica company. "The reviews were obviously not coming from the variety of sources and locations being stated."
Online reviews have become a major factor in consumer decision-making, with businesses sometimes failing because of negative ratings. Reputation management and public relations firms have popped up to help businesses improve their online identities.
Digital Air Strike, a company that tracks such 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-most-popular review website, just behind Cars.com.
In its lawsuit, filed in Texas, Edmunds alleges GlowingReviews.co, operated by Humankind Design, of creating multiple accounts and submitting fake reviews in breach of Edmunds' membership agreement. The company also accused GlowingReviews.co of using Edmunds' logo on its website without permission.
Humankind, based in Friendswood, Texas, did not respond to an email and a voicemail seeking comment. But Justin Anderson, who runs GlowingReviews, told Bloomberg that he was collecting handwritten comment cards and submitting them to Edmunds. He called the allegations groundless and vowed to work with Edmunds to allay its concerns.
Edmunds spokesman Aaron Lewis declined to respond to Anderson's comments, saying it was not productive to go back and forth through the media.
Edmunds allows consumers to post reviews of cars and dealerships on its website, but it screens each posting. In early February, 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, Edmunds said in the lawsuit.
Levin declined to discuss how the company spots fakes among the 4,000 reviews it receives each month. But he described the reviews in this case as being "short and not too specific" and unbalanced.
Levin has not named or contacted the dealers that it alleges were reviewed by Humankind.
"We're not sure if they were complicit or if they were victims too," Levin said of the dealers.
According to GlowingReviews' website, the firm charges as little as $25 a month to post reviews on behalf of businesses to as many as 15 websites. Those Web services include Google (GOOG)+, Yelp and Cars.com. Edmunds reached out to those companies to alert them of the suspected fraud.
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.
Levin said Edmunds decided to sue Humankind to protect its nearly 20 million monthly visitors.
"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.
Edmunds is seeking damages and a court order shutting down Humankind's review service.
"There's a real opportunity to purify consumer reviews," Edmunds spokeswoman Jeannine Fallon said.