FTC Levies $12.8 Million Fine against One Amazon Seller over Fake Reviews

The Federal Trade Commission takes decisive aim at fake Amazon reviews, slapping one seller with a colossal $12.8 million fine…

Fake reviews on Amazon are a continual problem; hurting both the platform and buyers. Now, in a landmark case regarding same, the Federal Trade Commission has resolved its first case. The FTC’s complaint accused an Amazon seller of paying for fake reviews.

The defendant, Naftula Jacobowitz and Cure Encapsulations Inc., paid amazonverifiedreviews.com to create and post bogus reviews for a weight-loss product.

$12.8 Million FTC Fine Targets Fake Amazon Reviews

The commission alleged owner Jacobowitz directed the fake review writer to work to give his product listed as “Quality Encapsulations Garcinia Cambogia Extract with HCA” an average rating of 4.3 out of 5 stars. 

Basically, the FTC claims the owner paid for reviews which appeared real but were in fact, fake. This boosted credibility and enabled the product to maintain a high rating, although fabricated.

This isn’t new for Amazon. The online marketplace has long wrestled with this particular problem. The company has gone so far as to file lawsuits against several fake review websites and thousands of individuals on providers like Fiverr in the past few years. For instance, Amazon sued amazonverifiedreviews.com back in 2016.

Andrew Smith, the Director of FTC’s Bureau of Consumer Protection, wrote in a statement:

“When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”

The end result in this specific case is a fine of $12.8 million. However, the FTC agrees to suspend the fine in exchange for a $50,000 payment to the commission. But, that payment must be made in-full and the entire fine becomes due if the company violates the terms of the settlement.

Bill Boyles

Bill is a freelance writer who covers a wide range of topics, including apps, social media, and search.