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"What a complete and total scam!" What if it’s your business they are talking about? Read IPA’s new article dealing with online defamation, libel and what to do about it.


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Beware of the online business cyber attack

The worst lies are told behind your back. Protect your business from an online cyber attack

It is said that the worst lies are told behind your back. Until recently, rumors about businesses have generally been oral, fleeting in nature, and (hopefully) not given much credence. Unfortunately, the dynamics of the rumor mill are changing. In today’s technologically advanced world, frauds, scams, rip-offs, cold calling schemes, etc. can all be easily found and researched with a few clicks. Just about everything on the Web, including the good, the bad and the outright lies, is now indexed by search engines.

In the online world, rumors and lies are receiving unprecedented publicity primarily because Congress granted service providers (those not involved in, or responsible for, the content of a Web site) immunity from liability as publishers of defamatory content. Coupled with the anonymity of the Web, damaging lies are now easier to tell, and unfortunately it is easier to tell them without getting caught. Even large corporations such as Capital One Financial Corporation and Government Employees Insurance Company (more commonly known as GEICO) are not immune to these lies and online defamation as a whole. However, these lies do not simply come across to others as baseless rumors. They now have credibility, because they are right there on the Internet to see! To make matters worse, sometimes others will appear to have posted similar false claims about a company, giving the appearance of independent validation.

The source of the defamation seems to come from four types of online information purveyors: Weblogs, industry forums or boards, commercial Web sites and self-proclaimed consumer protection sites. Regardless of the source, there is almost always a direct economic motivation by the author. Perhaps the responsible party is an affiliate or supplier of a competitor, or the competitor itself. For example, recently, an online industry forum was providing customer satisfaction ratings in a seemingly objective manner. It became quickly apparent, however, that the revenue from the site was exclusively banner advertising, and those companies not advertising on the site were receiving negative customer ratings.

Of particular interest lately are the spam sites that label a company a spammer. The reason these companies are labeled as such is due to the fact that these sites use a definition of spam that includes even those companies complying with the federal CANSPAM Act. For example, let’s say a site owner is reportedly selling e-mail software in competition with many of those reported as spammers on his own site. Well, all you have to do is follow the money as that is often the motivating factor for the publication of online defamation.

It is not surprising, then, that the most prevalent platforms for defamation are chat boards or forums on which competitors, acting like customers, offer up damaging testimonials about how your company is engaged in fraud, scams, lawsuits – such as those involving RICO offenses, for example – and rip-offs in general. Of course, the author, purely for the benefit of public consumption and protection, helpfully points out that all of your employees are sleazy and crooked. The general public, your customers and your vendors often view these comments on public service sites as unbiased and, therefore, truthful. If you rely on the Web to drive business sales, how many unknown prospects went elsewhere after researching your company?

Unfortunately, these are complex matters to solve. Search engines, Web sites, chat boards, public service sites, rating sites and the like generally will not agree to remove a defamatory post without a court order. After all, Congress gave them immunity from liability. However, there are ways to deal with online lies without engaging in a lawsuit.

Sometimes the site publishing the statements is not a quality and reliable service provider, such as the Better Business Bureau, since it influences content and is therefore not immune. The realization of possible litigation tends to get the attention of the site proprietor if a convincing theory of liability is put forth.

Also, occasionally the poster can be tracked down and identified through research. An author facing a lawsuit can often be motivated to remove the offending postings. An employee’s actions are often imputed to a company, so that legal notice to a business that is a suspected source can reap dividends.

In the end, though, if litigation does become necessary to identify the author and to seek damages and an injunction, the anonymity of the Web often dissolves. The chance of identifying the author is high if you move quickly. Remember that most Web sites and ISPs keep log files and access records for between 30 and 90 days, so time is of the essence. However, having your lawyer send a standard cease-and-desist form might be unwise as you may find it posted as support for newly alleged fraud, extortion, intimidation and harassment. All demand letters, such as the aforementioned cease-and-desist letter, must be exacting, detailed, tactful and direct, and have allegations supported by facts that the recipient would not want to post.

The following are steps your company can take to manage the damage caused by this type of cyber attack:

  1. Monitor the search engines. I strongly recommend utilizing the Google Alert feature. This feature sends a report of indexed results based upon your keywords (consider using company, business, product, officer and key employee names). While you are at it, consider adding your key competitors to the alert for business intelligence.
  2. Designate a person to search the top engines (Google, Yahoo!, MSN, AOL, Dogpile, etc.) and have that person take note of the results of your keywords on a regular basis.
  3. Do your best to determine what your customers, and prospective customers, are hearing about you. There are ways to prevent search engine spiders from indexing a Web site, and even the most devious competitor can post lies, providing a confidential link to select parties. Remember: the worst lies are told behind your back.

How often does Internet defamation and related defamation of character occur? More often than you may realize. Many times, the only way to know about these rumors is to search the engines. The following are a sampling of the issues my firm has tackled.

  • A prominent online business was targeted on a Weblog through Internet defamation and the posts escalated to the point that death threats were being made and a map to the company’s headquarters was posted. Google had indexed the blog in the first position whenever someone searched for the client.
  • A small business was defamed by a competitor launching a Web site. The competitor went so far as to post a portion of the small business owner’s credit report.
  • Industry bulletin board posts from a former customer claimed that a client was running a scam.
  • A consumer protection review site seemed to always return extremely negative and detailed reviews of any company not advertising on that particular review site.
  • An unhappy customer launched an extensive Web site critical of a client, which included false and misleading claims and altered documents.
  • A nationally recognized speaker was defamed on a series of review sites surreptitiously run and controlled by competitors and indexed high on the major search engines.
  • A prominent university professor was informed of a site containing his name and photograph. The site falsely claimed he was a convicted pedophile.
  • A long-established and upstanding franchise company was attacked on fraud, scam and rip-off reporting sites by a disgruntled former franchise holder.
  • A Web hosting client was wrongly sued for hosting an allegedly defamatory Web site, despite being immune under federal law.
  • A dissatisfied distributor of a client’s products used a copy of the client’s electronic customer list to send out defamatory e-mails to all of the client’s customers.
  • A client was sued in California for allegedly creating defamatory postings on a Web site forum made by a third party.
  • Dissatisfied customers decided to publish defamatory statements that quickly appeared on the first page of organic Google results.
  • A client’s business was initially referred to by a popular blogger as a scam, an inaccurate description requiring immediate attention as the results were appearing at the top of Google’s search results.
  • A business was told it would have to pay a very significant amount of money for a defamatory posting in order to be removed from a rip-off reporting site.
  • The major business bureau issued a fraud warning on a client, threatening the existence of its business, without having conducted adequate due diligence and appropriate analysis to fully understand the nature of the business.
  • The president of an online marketing company was in the cross hairs of a former client. The former client launched a site dedicated to attacking the other client’s business and posted links on a major scam Web site to his personal site and demanded money for its removal.
  • A disgruntled customer posted a string of defamatory comments on his Web site and demanded an exorbitant sum to remove them.
  • An industry rating Web site had a client baffled as the great majority of complaints were about that particular client. After investigation, it became clear that the site was owned and controlled by its chief.

IPA, a management consulting firm, is focused on North American small and medium-size privately held businesses. We have guided many clients through effective application of advanced methods in sales, financial planning, cost control, advertising, marketing and management.

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