Holiday rental website’s guilty plea earns $117,000 fine.
Bachcare, which allows holidaymakers to rent Kiwi baches and holiday homes, has been ordered to pay $117,000 for two counts of breaching the Fair Trading Act after it misled consumers by editing and withholding hundreds of online reviews.
The company, which manages about 1500 properties and has 100,000 customers every year, pleaded guilty when the Commerce Commission took it to the Auckland District Court.
The commission’s investigation found Bachcare withheld customer reviews that had a star rating of less than 3.5 out of 5 stars. The offending took place between June 2017 and September 2018. More than 900 reviews, of a total of 6800 posted, weren’t published. This artificially inflated rental properties’ web ratings, as no listed holiday home could have a score lower than 3.5 stars.
As well as refusing to publish less-than-stellar reviews, Bachcare selectively deleted comments about its maintenance and management of properties, and comments about the holiday homes’ cleanliness and amenities.
The commission said these practices misled customers. The case is the commission’s first legal action in response to manipulated online reviews, which are a common problem.
Commission chair Anna Rawlings said “consumers had no way of knowing that [Bachcare properties’] 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.”
Ms Rawlings warned any business collecting online reviews to “faithfully present” genuine customer reviews.
“Consumers have a right to expect that reviews solicited from past customers will be published in a way that accurately represents the feedback received,” she said.
District Court Judge A Swaran Singh, who set the $117,000 fine, said “offending such as this is difficult to detect. Bachcare’s offending only came to light because a consumer noticed that his review had been edited”.
Bachcare said it had “unreservedly apologised” for its actions and had removed all reviews posted before October 2018. “We have taken the learnings from this experience [and] commit to always operate with integrity and professionalism.”
Companies can be fined a maximum of $600,000 for breaching fair trading laws.
Here’s how to spot fake feedback online:
If you think the reviews on a website aren’t legit and it’s a company operating in the New Zealand market, you can report it to the Commerce Commission.