It could be you

Posted by Peter Labrow on 9 July 2010

The recent conviction of a man found guilty of placing fake bids on eBay has implications for organisations which manage their reputation on line.

For the first time, someone has been fined for placing false bids – a process known as ‘shill bidding’ – on eBay. Paul Barrett was fined £3,000 and ordered to undertake 250 hours’ community service.

He’d done what apparently quite a few people do: placed bids on his own auctions, using another username, to push up the value of his sales.

The story, not surprisingly, got quite a lot of news coverage. What I found interesting was the way that the news coverage focused on the eBay aspect of the story but missed the wider picture.

The law broken in this case is the relatively new ‘Consumer Protection from Unfair Trading Regulations 2008’, which I’ve discussed before.

Under the regulations, a trader can’t pose as a consumer – which is what Barrett had allegedly done, having more than one eBay account, one for the purpose of bidding on his other account’s auctions. (Apparently it transpired that he even sold things to himself, so he could leave himself a good seller’s rating and thus increase his apparent trustworthiness.)

There are implications here for businesses which manage their reputations on line – or pay others to do it for them.

One practice that some companies engage in is to review their own products as if they were consumers. An example might be that, if I manufactured televisions, I could go to various on-line stores and leave ‘objective’ reviews as to how good the televisions are.

Under the act, this is illegal – and the fine, for company directors, can be as much as £5,000. Unlike the regulations the act replaced, activities such as this are now a criminal offence. And that means a custodial sentence is also a possible punishment – up to 3 years’ imprisonment.

I spoke to someone recently who does this as part of his company’s marketing. His company pays outworkers to review his products – he believed that he was protected from the law because it wasn’t him of or his company directly placing the reviews. Not so. In such a case, the company’s directors would still be responsible.

This is something organisations need to really be aware of.

It’s all too easy for an eager sales or marketing team to believe that adding false reviews will create a word-of-mouth buzz, or that they are engaged in ‘guerrilla marketing’ – but the fact is, they could be putting you and your company at risk.

It also demonstrates that it’s vital to know exactly what any search optimisation companies, reputation management companies or managed social media companies are doing on your behalf. As they say, ignorance of the law is no excuse.

Any organisation which has a website that promotes or sells products or services of any kind and which manages its reputation on line needs to be aware of this law, in full.

This is but one aspect of it – there are other offences which many companies are committing daily. This conviction should be a wakeup call: getting it wrong can have serious consequences.

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