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Bogus online reviews face EU ban

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Business people who write fake reviews of their own products will fall foul of new European laws from next year. Laws banning businesses from misleading consumers will bar the act.

As consumers rely increasingly on online forums and message boards for impartial advice from other consumers on products and services, business people have started posting fake reviews praising their own goods.

From Amazon book reviews to travel site hotel write-ups, several business people have been caught pretending to be consumers and giving their businesses rave reviews. The new European laws will outlaw the practice.

The EU Directive on Unfair Commercial Practices creates new protection for consumers against the practices of businesses and introduces a "general duty to trade fairly" for the first time in the UK.

The directive empowers business rivals to sue those who engage in unfair commercial practices. Organisations with an interest in combating unfair commercial practices, such as the Office of Fair Trading in the UK, can also take legal action.

The directive orders member states to set their own penalties for breaching the new rules, demanding only that they are "effective, proportionate and dissuasive".

"The new legislation outlines 'sharp practices' which will be prohibited throughout the EU, such as pressure selling, misleading marketing and unfair advertising," said an explanation from the European Commission's Consumer Affairs department.

"A commercial practice is misleading if it in any way, including overall presentation, deceives or is likely to deceive the average consumer, even if the information is correct and causes or is likely to cause him to take a transactional decision that he would have otherwise not taken," the Directive says.

Though UK consumers have consumer protections, they tend to be sector specific and contained in a number of laws. The act of transposing the directive into UK law will put consumer protection law in one place for the first time. That must take place by 12 December this year.

The new laws are designed to protect consumers, and include demands that businesses not mislead customers, that they do not engage in aggressive marketing such as door step selling, fake "closing down" sales and the use of pester power, where products are marketed to children who are expected to annoy parents into buying them.

The Sunday Times recently carried out a survey of travel recommendation sites and found a number carried "reviews" by restaurant and guest house proprietors. Owner David Bremner admitted writing a glowing review of his hotel, the Drumnadrochit hotel near Loch Ness, without mentioning that he was the proprietor.

It found that establishments with poor ratings could transform them in just a few hours by posting positive reviews whether or not the reviewers had been there or were connected with their owners.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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