Friday, 20 December 2019 09:37

NZ’s Commerce Commission imposes $117,000 fine over misleading online reviews Featured

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New Zealand’s competition regulator The Commerce Commission has fined holiday rental management and accommodation company Bachcare $117,000 for misleading consumers by altering and withholding publication of online reviews posted by users of its accommodation services.

The penalty was imposed following a Commerce Commission investigation in which Bachcare pleaded guilty to two charges under the Fair Trading Act 1986 - the first litigation action the Commission has issued over online reviews.

The investigation found that between 1 June 2017 and 28 September 2018 Bachcare edited customer reviews which were published on its website, removing negative comments about the rental properties listed by the company, and/or Bachcare’s maintenance and management of properties.

Holiday rental management and accommodation company Bachcare has been fined $117,000 for misleading consumers by altering and withholding publication of online reviews posted by users of its accommodation services.

Following a Commerce Commission investigation Bachcare pleaded guilty to two charges under the Fair Trading Act 1986, in what is the first litigation action the Commission has issued over online reviews.

The Commission says that Bachcare misled consumers through the creation of artificially positive impressions about certain properties and its services, with its conduct including:

  • deleting comments regarding the cleanliness and amenities of properties, and regarding reviewers’ experience of properties; and
    withholding from publication reviews for properties to which customers had given a star rating of lower than 3.5 out of 5.
  • The Commission said that this conduct meant that no listed property at the time could display a customer rating lower than 3.5 stars out of 5.

Commerce Commission Chair Anna Rawlings says, “Online reviews are an important source of information for consumers contemplating the purchase of goods and services. This is particularly so in markets such as short-term property rentals, where customers may not have access to other information to help them to decide whether a property is suitable for their needs”.

“Consumers have a right to expect that reviews solicited from past customers will be published in a way that accurately represents the feedback received.

“In this case, consumers had no way of knowing that star ratings were inflated, or that the text of some reviews had been edited to cast the property in a more positive light. This type of conduct undermines the trust that consumers will place in reviews of products or services.”

Rawlings warned that “all businesses who collect and present online reviews must faithfully present genuine customers reviews”.

“Any discretion exercised by the trader over the publication of reviews must be made very clear, otherwise consumers can be misled and traders risk breaching consumer law.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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