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Fake or incentivised reviews

Ratings built on fake reviews, or on reviews customers were rewarded for without saying so. The reputation you think you are buying may not survive scrutiny from platforms or regulators.
Category
Online and platforms
Applies to
All business models
Severity
Deal breaker
Last updated
Author
Loupe editorial
Reviewer
Not yet reviewed

Why it matters

Reviews affect what a business can charge and how easily it wins customers, so they are part of what you pay for. If the ratings were manufactured, the goodwill behind the price is overstated, and it can vanish when a platform removes reviews, adds a warning to the listing or suspends the account.

The legal exposure has grown too. In the US, the Federal Trade Commission's final rule on consumer reviews, announced in August 2024, bans fake reviews, offering payment or other incentives for reviews that must express a particular view, and reviews by company insiders that do not disclose the connection, and allows the FTC to seek civil penalties from knowing violators. In the UK, the Digital Markets, Competition and Consumers Act 2024 bans fake reviews and concealed incentivised reviews, and since April 2025 the Competition and Markets Authority can fine a business up to 10% of its global turnover for breaking consumer protection law. Other countries have their own rules, so take advice from a qualified lawyer where the business trades.

Buying the business does not always leave the history behind. In a share sale (stock sale in the US), the company's past conduct comes with it. In an asset sale, legal liability may stay with the seller, but a platform's response will still land on the listings and accounts you bought.

Systematic manipulation also tells you how the seller presents information generally. A few old reviews gathered with an undisclosed discount may be fixable. A pattern of fabricated reviews is usually a reason to walk away.

Goodwill

Goodwill is the part of a purchase price above the value of a business's identifiable assets, less its liabilities. It reflects things like reputation, customer relationships and trained staff.

Asset sale versus share sale

In an asset sale you buy selected assets of a business; in a share sale (a stock sale in the US) you buy the company itself, with its full history. The choice shapes risk, tax and what needs consent.

How to spot it

  • The rating is well above competitors with similar products, prices and complaint levels.
  • Five-star reviews arrive in bursts, often after a launch or a run of poor reviews.
  • Reviews share generic wording, repeated phrases or details that do not match the product or service.
  • Reviewer profiles are new, have few other reviews, or review unrelated businesses in distant places.
  • Public ratings do not match private signals such as refund rates, complaints, support tickets and repeat purchases.
  • Inserts, emails or follow-up messages offer refunds, gift cards, free products or prize draw entries in return for a review.
  • The accounts show payments to review services, reputation agencies or product testing groups.
  • A platform has removed reviews or placed a consumer alert on a listing.

Questions to ask the seller

  • How does the business ask customers for reviews, and has that process changed over time?
  • Have you ever offered anything in return for a review, including discounts, refunds, free products or prize draws?
  • Have staff, family, friends or agencies written reviews of the business or its competitors?
  • Has any platform removed reviews, labelled the business or restricted a listing because of review activity?
  • Which review or reputation agencies have you paid, and what did they do?
  • Has a regulator ever contacted the business about reviews or endorsements?

Documents to request

  • Review request templates, email sequences and product inserts used in the last three years
  • Invoices and contracts for any review, reputation, influencer or product testing services
  • Platform notices, warnings and correspondence about reviews
  • A dated export of reviews from each platform, so volume and timing can be analysed
  • Refund, complaint and support ticket data for the same period
  • The written review policy, if the business publishes reviews on its own site

Sources

  1. Federal Trade Commission Announces Final Rule Banning Fake Reviews and Testimonials (opens in a new tab). Federal Trade Commission, 14 August 2024.
  2. CMA to boost consumer and business confidence as new consumer protection regime comes into force (opens in a new tab). Competition and Markets Authority, 7 April 2025.
  3. Short guide for businesses: publishing consumer reviews and complying with consumer protection law (opens in a new tab). Competition and Markets Authority, 4 April 2025.

Want this checked properly on a real listing?

A dossier checks the listing's figures, registrations and risks, with a source and confidence for every finding. Open a listing in the feed and request a dossier from its page.

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  • Goodwill

    Goodwill is the part of a purchase price above the value of a business's identifiable assets, less its liabilities. It reflects things like reputation, customer relationships and trained staff.

  • Warranties and indemnities

    Warranties are the seller's statements of fact about a business in the purchase agreement; indemnities are promises to reimburse specific losses. Together they decide who bears risks that diligence could not rule out.

  • Asset sale versus share sale

    In an asset sale you buy selected assets of a business; in a share sale (a stock sale in the US) you buy the company itself, with its full history. The choice shapes risk, tax and what needs consent.

  • Due diligence

    Due diligence is the investigation a buyer carries out before committing to a purchase, testing the finances, contracts, legal position and operations against what the seller has described.

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