Fake Paid Amazon Reviews Prompt Groundbreaking FTC Lawsuit

Fake Amazon reviews, or reviews companies allegedly pay for to falsely promote their products, are under scrutiny by the Federal Trade Commission (FTC).

The federal agency recently settled a lawsuit it lodged against Cure Encapsulations Inc. over allegations that it paid for fake Amazon reviews to keep the online ratings of its appetite supplement, Quality Encapsulations Garcinia Cambogia, high.

According to the FTC, the company, owned by Naftula Jacobowitz, used a third party to boost their Amazon ratings by touting the product as “powerful” and that it “literally blocks fat from forming.”

In a statement, the FTC’s director of consumer protection pointed out that “[p]eople rely on reviews when they’re shopping online. When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”

According to the FTC lawsuit, Cure Encapsulations sold a supposed weight loss supplement made from an Indonesian plant called garcinia cambogia.

“The recommended daily dose of Quality Encapsulations Garcinia Cambogia is one two-capsule serving. A serving contains 1,000 mg of garcinia cambogia extract standardized to 60% hydroxycitric acid (‘HCA’),” noted the FTC complaint. “In other words, one serving contains 600 mg of HCA.”

Though the plant is supposedly known for weight loss, one researcher found that it can cause liver failure requiring organ transplant.

Despite potentially harmful side effects, Cure Encapsulations sought to keep the online ratings of its supplement high, contracting with another website, AmazonVerifiedReviews.com, to write fake Amazon reviews. The company promised to keep ratings at 4.3 out of five stars for Cure.

Cure allegedly relied on Amazon for all of its sales.

In the first of its kind action over fake Amazon reviews, the FTC accused Cure Encapsulations and its owner of misleading consumers. The reviews concocted by AmazonVerifiedReviews.com were fabricated, according to the FTC.

The FTC pointed to communications between Jacobowitz and AmazonVerifiedReviews.com that stated, “Please make my product … stay a five star.”

In addition, the owner offered to pay a total of $1,000 for 30 reviews, while noting that “the goal” of his competition was to bring his Amazon rating to 4.2 stars.

Fake Amazon reviews touted the effectiveness of Cure’s supplement. Some reviews said that the buyer had lost as much as 20 pounds as well as two pounds a week. These reviews, according to the FTC, were not made by anyone who had actually purchased Quality Encapsulations Garcinia Cambogia capsules.

According to the FTC’s lawsuit, “the Amazon reviews of the Quality Encapsulations Garcinia Cambogia product were not truthful reviews by actual purchasers of the product, but instead were fabricated by one or more third parties who were paid to generate reviews.”

The FTC said that the owner of Cure Encapsulations settled the litigation a mere week after it was filed.

Under the terms of the settlement, without “competent and reliable scientific evidence in the form of human clinical testing,” Cure and its owner are prohibited from making “weight-loss, appetite-suppression, fat-blocking, or disease-treatment claims for any dietary supplement, food, or drug.”

Additionally, the company will be required to notify consumers who purchased their product, along with Amazon, that they purchased fake Amazon reviews and made false claims about the efficacy of the supplement.

“Finally, the order imposes a judgment of $12.8 million, which will be suspended upon payment of $50,000 to the Commission and the payment of certain unpaid income tax obligations. If the defendants are later found to have misrepresented their financial condition to the FTC, the full amount of the judgment will immediately become due,” the FTC states.

The Fake Amazon Reviews Lawsuit is Federal Trade Commission v. Cure Encapsulations Inc., et al., Case No. 1:19-cv-00982, in the U.S. District Court for the Eastern District of New York.