PhotoJust as the search engine spawned an industry known as Search Engine Optimization (SEO), so has the advent of consumer review sites like this one and social networks like Facebook brought forth a growing industry called reputation management.

In both cases, it is often said that unscrupulous practitioners give their white hat brethren a bad name, although others would argue that both industries are in the information manipulation business.

Black hat SEO companies spam the search engines with questionable content and keywords while black hat reputation management companies flood the Web with fraudulent glowing reviews designed to mislead consumers.

As you'd expect, there are extreme opinions on both sides.

Some small businesses and, in particular, healthcare professionals seem to think that no one should be able to say anything about them. They tend to bluster, threaten and even sue the websites and individuals who post reviews about them, almost always unsuccessfully. Other businesses, especially large corporations, tend to simply ignore the critical comments, confident that their multi-million dollar advertising budgets will drown out the pipsqueaks.

$41 million

Most businesses fall somewhere in between and they have made reputation management companies forces to be reckoned with. One of the largest, Reputation.com, today said it has raised $41 million in its latest round of funding.

The company currently has around 150 employees and said it hopes to hire around 100 more in the next year as its expands its product line-up.

Currently, the company's portfolio includes such relatively benign services as “promoting a positive and accurate image online” while, more ominously, it promises to “suppress negative information.”

Not censorship?

When the government tries to suppress information, that's called censorship but when private companies do it, it's apparently just business as usual. Reputation.com assures clients it can help them “fix false or misleading reviews, bad press, wrongful lawsuits or disputes.”

It and similar companies do this primarily by generating positive material, genuine or otherwise, and using SEO techniques to crowd out actual, though perhaps negative, content.

Now Reputation.com wants to go a bit deeper. It will use some of its $41 million to build a “dataset” business – building profiles of individuals that will enable it to assess their attitudes and interests.

The company will then offer consumers the opportunity to license that data and be paid by marketers who want to sell them something, said CEO Michael Ferlik. He calls it a “pro-privacy business model.”

Being a fairly murky business not generally recognized outside Web business circles, reputation management has generally avoided criticism from the privacy and free speech advocates who might be expected to rail against it.

Free & unfettered

PhotoThis is not to say, of course, that everything on the Web is Gospel. Fair-minded observers must admit that consumers are sometimes guilty, at the least, of overstating their case and, at the worst, making inaccurate and potentially harmful statements about their experiences.

Case in point: Mairi of Lee, Mass. She signed up last year for JustFab.com, a ladies' shoe boutique that uses a buyers club business model. Members get a monthly selection tailored to their preferences for a flat fee of $39.95.

“This shopping web site started charging me a $39.95 'credit' every month. When I called to ask why I was getting random charges, they said I was supposed to 'opt out' of the last three months fashion selections. Basically it's a scam that forces you to make purchases,” Mairi said in a complaint posted on ConsumerAffairs.com.

No it's not, said another poster who did not give his or her name.

“The company is not at fault if the person signing up does not understand what they are signing up for. Not only that, the site sends you reminder to go check your selections for that month. If they just bother to go to the website once a month and refuse to buy any of their selections there are absolutely no charges,” the JustFab.com defender wrote, a point echoed by JustFabulous CEO Adam Goldenberg.

“At JustFabulous we pride ourselves in not only the level of our products but also in the quality and transparency of our service. Customers can receive for free a custom, hand-picked boutique; once they become a paying customer, as part of their membership agreement, customers can easily skip a month of purchasing for no charge and avoid buying a product credit. Any ongoing charge if the consumer doesn’t skip is considered a credit towards one of our items,” Goldenberg told ConsumerAffairs.com.

“This particular issue does not come up often at all, but if it is addressed on a forum like Consumer Affairs or through our own Facebook page,  our customers are the first to jump in with a response to clarify to fellow customers.  We will continue to educate new and existing customers about how JustFab.com works through our website, newsletters and social media platform so everyone can enjoy JustFabulous.”

The site's FAQ is actually pretty clear about how the service works:

Do I have to purchase an item every month?
No, with JustFabulous, there is no obligation to buy. We know that although our members love fashion, not everyone can afford to splurge each month. We've made it easy to skip any month. Simply visit your Boutique between the 1st and the 5th of the month and select the Skip This Month option. Then you won't be charged that month. 

Yet in her complaint, Mairi said, “There is no statement that if you don't 'skip this month', they will charge you any way.”

Consumer dialogue

“Sounds like the consumer is the irresponsible one in this case by not keeping track of their account OR their credit card,” the JustFab defender wrote. “You can't just blame the company when you don't do your part. You should remove this incorrect review.”

Review sites generally don't try to determine whether a user submission is justified, unjustified, correct or incorrect. Review sites are public forums that are open to one and all. Consumers can complain, companies and other consumers can respond.

And, as the JustFab example shows, free and unfettered consumer comments tend to be self-regulating – if one or more consumers complain loudly but incorrectly, others are likely to chime in to defend the company being raked over the coals.