In more than 560 postings each day,sellers offered a refund or payment for a positive review,usually around $6. Amazon told CNBC it works with socialmedia sites to report bad actors who are cultivating abusive reviewsoutside our store. And we've sued thousands of bad actorsfor attempting to abuse our reviews systems. The FTC requires reviewers todisclose any payment or connection to the product being reviewed. On some sites like Fiverr andFreelancer, users get around this by advertising marketing services, a thinlyveiled reference to pay-for-play reviews. There's also the more directapproach where sellers include a note inside a package asking for areview in exchange for a discount or other compensation. It's hard to keep ontop of five million sellers and 600 million products.
There's always a few bad seeds in themix, and it's the bad seeds that get the attention. It's not thatAmazon's sitting back doing nothing. It's that the scope of whatwe're dealing with is so vast. There are legitimate paid reviewerprograms like Amazon Vine, Early Reviewer and Amazon Associates, whichrequire reviewers to disclose that they've received a product for free inexchange for what's supposed to be an honest review. But Amazon has littleway to detect a compensated review when deals are madeoutside these programs.
There's a Velcro panel in the back soyou can constantly reset the size and it's always the proper support. Sisters Joy Kosak and Debra Abbaszadehdesigned a new type of hands-free pumping bra and started selling it onAmazon in 2009, where sales took off quickly. But for the past three years,sales have been flat, dropping off after Amazon started to openly courtChinese sellers to join its marketplace.
Cheaper bras with anexceptionally similar design to theirs started popping up, getting hundredsof five star ratings seemingly overnight. When that happened, we sawa pretty immediate race to the bottom in terms of pricing. The sisters have been tracking reviewactivity on listings from competitors like Momcozy and sharingthe data with Amazon. Our best seller, where we used to benumber 25 in baby, we over the past ten years of being on Amazon, wehave collected a little more than 10,000 reviews. It took them a couple ofmonths to to increase by 4,000. Big brands like Nike and Birkenstockhave been so burned by competitors selling knockoffs with thousands of fivestar reviews that they stopped selling on Amazon altogether. Although Nike's landing page still appearsactive on Amazon, the items there are being soldby third-party sellers.
They're fake, they're counterfeit. They're either bought from Alibaba oreBay and then they're resold on Amazon. So a lot of thesesellers are actually ruining Nike's reputation and they're putting in all the reviewsinto the official listing for Nike. At times, big brands themselvesare soliciting fake reviews. Last year, for example, skincare brandSunday Riley settled with the FTC after it was caught encouraging employeesto post fake reviews on Sephora.com.
On Amazon if you're not doingsome sort of, you know, tricky technique, it's at least one hundred ordersfor each review that you get. Bernie Thompson sells about 120consumer electronics products on Amazon from his warehouse outside Seattle. Competitors have tried to undermine hissales with fake review tactics. We've had people take our mostnegative review, the one that's most embarrassing, and we've had competitorsvote up those negative reviews. Let's say your competitor has a one-starreview on the first page, you can buy 100 helpful votes.
When they're considered most helpful, they showup at the top of the results. And so you can reallyharm your competitors by doing that. That helpful box can easily be clippedby bots instead of humans or by click farms overseas. The ones that I've been contacted byare all in Bangladesh, India, I think one of them, Vietnam. They have computers and they've gotfake accounts and they basically turned in this whole system where they go inand just click on "helpful" once and then log into a different account andthen click on "helpful" again and so on to where you can just payfor basically taking down your competitors.
Bots are also getting betterat generating convincing written reviews. We actually see a lot of thesefake review farms leveraging open source projects from these behemoths, suchas Google, Open AI, multibillion dollar research firms and leveragingit to produce fraud. And by this case, we're producing humanlike text that looks like really realistic. Amazon's own algorithms dousually detect these patterns and remove them within weeks. Amazon says we're going to wait 30days and if we detect that there's enough fake reviews, we'll pullback those fake reviews. The problem is, during that 30day policing period, the product can generate a whole lot of salesthat it didn't otherwise deserve.
In 2019, Amazon changed its review systemso customers can leave a simple star rating with one click insteadof a full written review. This tool that Amazon put out there tomake it easier for consumers to give real feedback has actually made iteasier for the scammers to elevate their star rating, just the volume, because nowall they have to do is say all you have to do is click a button.
No one can tell who left the rating. You will not see those ratings as alist of authors on the bottom of the page. And we see products with thousandsof ratings that have no body, text body attached to them. While a rating can only be leftby someone who bought the product, Amazon allows reviews from anyone even ifthey haven't made a purchase. We see certain categories have over 90%of the reviews on the product are unverified. And when you look at them, itjust looks like a flood of bot reviews.
What Amazon does is theygive different weights to different kinds of reviews and so a verifiedpurchase review will have more of a weight than someonewho wasn't verified. But the intention is that you could havebought it at Walmart and want to review it. You could have bought itsomewhere else and want to review it. And then there's a slew of newtricks popping up from bogus seller accounts to mysterious free Amazon packagesappearing on people's doorsteps. In one tactic known as Review Highjacking,a seller takes over a once popular listing. So you'd have thesecrazy situations where, you know, our product was a USB hub butwe had to discontinue it. And somebody's selling like women's eyelasheswould take over that product, change the picture to women'seyelashes, change all the text. The reviews would showthese 2,000 positive reviews. But if you'd read thereviews, they're not about eyelashes.
They're about a USB hub. Another recent tactic involves seed packetsfrom China showing up at hundreds of people's houses who don'tknow where they came from. The Better Business Bureau warns thatthe scam, often called Brushing, means the seller is using the seedsto generate fake Amazon orders tied to U.S. addresses. Then they can writefake verified reviews about themselves falsely inflating theirseller rating. Then there's sock puppet reviews, whichare bogus accounts created by a seller to write positive reviewson their own products. Sellers can also hack into a customer'sAmazon account and post a positive review from there withoutthe customer ever knowing. And they're all new products that aregetting reviews at an amazing rate.
It's just not, it's not believable. With so many ways to createrealistic fake reviews, some start-ups have developed ways to detect them. Fakespot is one of these. Fakespot launched a new Chrome plugin inMay that has a quarter million downloads so far. It analyzes thecredibility of a listing's reviews and gives it a grade from A to F. The Fakespot Guard will actually catchthese sellers dynamically as you're browsing Amazon. And we will offer you an alternativeseller that is authentic and genuine that we've seen before thathas high customer satisfaction. Other online tools that customers canuse to check the credibility of Amazon reviews include ReconBob, ReviewMeta,the Review Index and Review Skeptic. Shoppers willing to spend timeto vet their purchases can manually spot fake reviews, too. The number one way consumers tell usthey identify a fake review are multiple reviews with thesame language in them.
So they're basically looking forpatterns in the reviews. The second most important way is reviewsthat are not actually about the product. The third ispoor grammar and misspellings. And the fourth, and I actually think thisis one of the more important ones is overwhelming number offive-star positive reviews. If a product only has two or threereviews that it's gathered over a long period of time and those two orthree reviews look pretty good, consumers actually need to give kind of moretrust to a product like that. Clearly, that brand and thatmanufacturer, they're not gaming anything.
If you do spot a fake review,Amazon encourages customers to use the report button next to each review. But whether Amazon will take any actionafter fake reviews are reported is a different question. We go down these rabbithole that take a lot of time to look for this information and thenwe share it with Amazon and nothing happens. And it's just exhausting. After CNBC brought Simple Wishes' complaintsto Amazon, months after it was first informed of the illegitimatereviews, Amazon said, "We've taken appropriate action on these accounts." Amazontold CNBC it uses powerful machine learning tools and skilledinvestigators to analyze over ten million review submissions weekly, aimingto stop abusive reviews before they're ever published.
Getting Amazonto actually do investigations, quite frankly, they don't have enoughinvestigators to do all the possible investigations needed. When I was at Amazon, there wasa time when Amazon had about 20 investigators for thewhole United States. There was over a million sellers on Amazonat the time and there were 20 investigators. In an unprecedented move,Amazon hosted a virtual conference earlier this month to give tipsand listen to concerns from its third party sellers, who make up58% of Amazon's e-commerce business. When it comes to outside regulation,fake reviews are prohibited by the FTC, but it's a complex issue. Where you can leave a review andyou receive some kind of compensation, you need to put in a disclaimer.
And that's consumer law. That's been around for a while. But there are different ways thatthis is now being gamed. There is no law attached to ratingswhere you can leave them without text. Targets and Walmart, they are theyare held to a higher standard. They have to vet products that theyput on their shelves or through their e-commerce platform becausethey are liable. And that's the huge difference here. Unless Amazon is purchasing the productfrom the seller as a wholesale purchaser and they are representing asthe seller, they have zero liability. And that's frightening. Last year for the first time, theFTC prosecuted a company for fake reviews on Amazon. The inflated reviews werefor a weight loss supplement that's made with a plant thatcan cause acute liver failure.
