How consumer blackmail puts businesses at risk

Consumer blackmail, often referred to as review extortion, is an increasingly prevalent threat in the business world. As online platforms become a primary source of information for consumers, businesses are finding themselves vulnerable to manipulation through negative reviews. This form of extortion can lead to significant financial and reputational damage, as businesses are coerced into providing concessions to avoid negative feedback.

Consumer blackmail typically involves a customer threatening to post a negative review unless their demands are met. These demands can range from refunds to free services or discounts. The rise of online review platforms has made it easier for consumers to wield this power, as businesses heavily rely on their online reputation to attract new customers. Businesses are increasingly confronted with threats that can tarnish their reputation and bottom line.

The Competition and Markets Authority (CMA) has highlighted the issue, stating, "Consumers may be using the threat of a poor review to 'blackmail' businesses into providing some concession, such as a price discount". This underscores the delicate balance businesses must maintain between customer satisfaction and protecting their integrity.

The Impact of Negative Reviews

Negative reviews can have a lasting impact on a business's image. Research indicates that a single negative review can significantly affect consumer perception and deter potential customers. This is particularly challenging for small businesses that may not have the resources to counteract the effects of negative publicity.

Businesses in the hospitality industry, such as restaurants and hotels, are particularly vulnerable to review extortion. A New York Times article revealed that some businesses have been forced to pay extortion fees in the form of cash or gift cards to remove negative reviews. This practice can severely impact profitability and even lead to business closures.

Strategies to Combat Consumer Blackmail

To mitigate the risks associated with consumer blackmail, businesses can adopt several strategies:

Establish a Robust Review Management System: Actively monitoring and responding to reviews can deter potential blackmail attempts. Engaging with customers and showing that feedback is taken seriously can reduce the likelihood of extortion.

Educate Employees on Handling Threats: Training staff to recognize and appropriately respond to blackmail threats is crucial. Employees should know when to escalate issues to higher management or legal teams.

Document Everything: Keeping thorough records of customer interactions can be beneficial if a blackmail situation arises. Documentation provides support when defending against unjustified claims.

Offer Professional Customer Service: Ensuring a high level of customer satisfaction through effective communication and resolution strategies can reduce the likelihood of negative attempts.

Legal and Ethical Considerations

Businesses facing consumer blackmail should be aware of their legal rights. Blackmail and extortion are illegal, and businesses can take legal action against perpetrators. Consulting with legal professionals and documenting all interactions can provide a strong defense against false claims.

Moreover, businesses should strive to maintain ethical practices and not succumb to extortion demands. As one Reddit user advised, "Take screenshots of the communications and reply to her 'reviews' with the screenshots demanding money". This approach not only protects the business but also discourages future attempts.