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FTC settles its first case for fake paid reviews on Amazon

The Federal Trade Commission announced on Tuesday that it had filed its first lawsuit against a marketer who used fake paid reviews to increase the sale of his product to Amazon.

The FTC had accused Cure Encapsulations to pay AmazonVerifiedReviews.com and post fakes reviews to maintain an average Amazon rating of 4.3 out of 5 stars for the company Garcinia Cambogia weight loss supplement. The agency also accused the company of making false and unfounded claims, including assessments that the product caused a weight loss of two or more pounds and "literally blocks the formation of fat".

Customer reviews have been an integral part of Amazon's business for more than 20 years. The written rating system and the 5-star rating system provide buyers and sellers with a helpful form of accountability and a sign of the popularity and quality of the products. But like any rating system, people try to get around it.

Amazon says it has invested heavily in automated and manual controls to monitor hundreds of millions of reviews on its website in order to preserve their authenticity and to prevent judgments that could fool customers. The company has filed lawsuits against fraud since 201

5, and has already sued more than 1,000 registered sellers who allegedly created fake product reviews on their websites.

"People rely on ratings when they" "shop online," said Andrew Smith, director of the FTC's Consumer Protection Ministry, in a statement. "If a company buys fake reviews to increase its Amazon ratings, it harms both buyers and companies that stick to the rules."

Under the terms of the proposed settlement, Cure Encapsulations is not entitled to make statements about the health benefits of food supplements without clinical evidence. The defendants must also inform their customers of the allegations made against them and determine the ratings they have earned for Amazon.

Against Cure Encapsulations, a judgment of $ 12.8 million was imposed, which is suspended if the company pays $ 50,000 to the FTC and meets other tax obligations. The full amount of the judgment will be due immediately if the Commission misrepresents the financial situation of the company.

Amazon has not responded immediately to a request for a comment. The operators of Cure Encapsulations and AmazonVerifiedReviews.com, which is no longer a working website, could not be reached immediately for comment.

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