Research outfit Gartner claims that up to 15 percent of all product reviews by 2014 will be made up. It is predicting that the media attention on fake social media ratings and reviews will result in at least two Fortune 500 brands facing litigation from the U.S. Federal Trade Commission (FTC) over the next two years.

Jenny Sussin, senior research analyst at Gartner said that with half of the Internet's population on social networks, organisations are scrambling for new ways to build bigger follower bases, generate more hits on videos, garner more positive reviews than their competitors and solicit ‘likes’ on their Facebook pages. Marketers have turned to paying for positive reviews with cash, coupons and promotions including additional hits on YouTube videos in order to pique site visitors' interests in the hope of increasing sales, customer loyalty and customer advocacy through social media ‘word of mouth’ campaigns.

However Organisations who opt to pay for phoney reviews can, and have, faced both public condemnation as well as monetary fines. In 2009, the FTC determined that paying for positive reviews without disclosing that the reviewer had been compensated equates to deceptive advertising.

Ed Thompson, vice president and distinguished analyst at Gartner said that marketing, customer service and IT social media managers looking to use reviews, fans and ‘likes’ to improve their brand's reputation on social media must beware of the potential negative consequences on corporate reputation and profitability.

Companies need to weigh the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics.

He thinks that the US FTC will crack down on this practice of fake reviews/ratings. The counter measure to this is to have teams of people identifying fake and defaming reviews and requesting the reviewers or host site remove them or face legal repercussions. Gartner analysts said they expect a similar market of companies to emerge specialising in reputation defense versus reputation creation.