Action Taken Against Meriton Serviced Apartments for Alleged Misleading Online Reviews

Friday 25 November 2016 @ 1.24 p.m. | Trade & Commerce

After a year-long investigation by the Australian Competition and Consumer Commission (ACCC), legal proceedings have been instituted in the Federal Court against one of Australia’s largest residential apartment developers, Meriton Property Services Pty Ltd, trading as “Meriton Serviced Apartments” (Meriton), with the ACCC alleging that Meriton engaged in misleading or deceptive conduct in connection with the posting of reviews of its properties on the TripAdvisor website.

Background to the Action

TripAdvisor offers a service called “Review Express” where participating businesses provide TripAdvisor with email addresses of recent customers who have consented to passing on their details. TripAdvisor then emails the customers, prompting them to submit a review of their recent experience with that business.

The ACCC alleges that from November 2014 to October 2015, Meriton took steps to prevent guests it suspected would give a negative review from receiving TripAdvisor’s “Review Express” email to avoid them posting potentially negative reviews.

It is alleged that this was done by inserting additional letters into guests’ email addresses provided to TripAdvisor so that the email addresses were ineffective, and not sending other guest email addresses to TripAdvisor.

On several occasions, Meriton allegedly engaged in this conduct in respect of the majority of guests that stayed at one of its hotels during periods where infrastructure or services failed, such as no hot water or a lift not working, in an attempt to ensure that guests would not receive TripAdvisor’s “Review Express” prompt email in case they left an unfavourable review.

The Deceptive Action

The ABC reports a former hotel manager (who requested anonymity) explained the process involved adding the letters "MSA" to the email addresses of guests who complained to the front desk, ensuring a TripAdvisor feedback from — which is supposed to be sent to every guest — bounces.

The former hotel manager who spoke to the ABC in 2015, said staff would "mask" negative reviews sometimes dozens of times a day and were criticised by their superiors when they failed to do so.

Claims of Staff Bribing Guests

The ABC's source also raised allegations staff were bribing guests to remove negative reviews from the website. It is alleged that an employee contact a guest via email:

"If you ever do change your mind in regards to removing your review … please allow to [sic] compensate you $100.00 off your whole stay, which is a little over 10 per cent in total."

Comment from the ACCC

ACCC Commissioner Sarah Court said of this matter:

“We allege that Meriton’s conduct was a deliberate practice, undertaken at the direction of Meriton’s senior management, aimed at minimising the number of negative reviews. This practice was likely to create a more positive or favourable impression of the standard, quality or suitability of accommodation services provided by Meriton. Consumers rely on independent review platforms like Trip Advisor when making purchasing decisions.  If reviews are manipulated to falsely create a more favourable impression about a provider, consumers may choose that provider on the basis of that falsehood over another accommodation provider who has not engaged in misleading conduct.”

Statement from Meriton Serviced Apartments

A statement released by Meriton Serviced Apartments said it would fight the claims. With Group General Counsel Joseph Callaghan saying:

"In every Meriton Serviced Apartment there is a notice inviting all guests to review their stay on TripAdvisor. Meriton does not agree that the public has ever been deceived or misled. The proceedings will be defended."

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

Related Articles: