24
Nov
Personal finance is all about watching your money. You need to spend, invest and save wisely to reach your maximum potential.
As someone with an interest in personal finance, I’m a massive fan of consumer education. Smart consumers spend more wisely and make better decisions.
I want you to avoid bad deals and bad companies. I strongly support online research as a means of protecting your interests as a consumer. Knowledge really is power and individual consumer self-empowerment is great.
So, it would stand to reason that I’m also a fan of websites dedicated to revealing scams and rip-offs, right?
Wrong.
At least I’m not a big fan of the most successful online “pro consumer” site and I’m actually very suspicious of many others.
The reigning champ among sites that purport to give consumers the low-down on bad businesses is Ed Magdeson’s Rip Off Report. For reasons that defy both logic and Google’s stated preferences, Rip Off Report is often one of the top results when you query search engines with company names. It’s a busy place, frequented by thousands upon thousands of Internet users looking for information about businesses.
If you aren’t familiar with the way Rip Off Report works, here it is in a nutshell: Anyone can sign up with the site and then submit a warning or complaint about a business that consumers engaged in pre-purchase research can then find.
That sounds good, but the reality is a little stickier. Although I’m sure there have been many people who have avoided bad deals because they read a post on Rip Off Report, there are big problems with relying upon it for smart guidance.
Many of these reasons to be wary of Rip Off Report apply to other similar sites, where user-generated content or reviews serve as foundational material, by the way.
Here’s why you need to take those negative reviews with a grain of salt (and then some).
The customer isn’t always right. I know that people love to say that the customer is always right, but that doesn’t make it true. Anyone who’s ever worked in a retail environment knows that a hefty percentage of customers are very wrong. They’ll also tell you that the ones who are the most wrong are also the ones who are most likely to complain. The folks who are willing to take the time and effort to unload on someone via Rip Off Report may not be your best source of entirely accurate and sane assessments of situations and transactions.
There’s zero editorial control. There’s very, very little exercise of editorial control at Rip Off Report. That isn’t an accident, either. The lack of editorial meddling is one of the reasons why its ownership can deftly avoid losing defamation lawsuits via the safe harbor provisions of existing laws. In any case, though, no one is actually monitoring or investigating the often wild complaints lodged by site users. These entries could’ve come from a perfectly reasonable person who wants to warn others of bad business tactics. They could also come from a frustrated fiction writer on a two-week whiskey bender who has a series of psych diagnoses and has opted not refill necessary prescriptions. The comments can be 100% accurate or complete fabrications and no one is testing them before publication at the site.
Where there’s a lot of smoke… Rip Off Report is a fairly frequent target of lawsuits. Some are tossed out, some are settled and others end up resulting in uncontested judgments against the site’s ownership. We can argue about the legal and overall merit of individual cases, but when you start hearing the same accusations from a variety of seemingly reputable people, you might reasonably assume that something might be wrong.
Following the money. If you run a business and someone unleashes on you with a scathing review, you can get the folks at Rip Off Report to intervene on your behalf. You’ll just need to pay them. Alot. Charging companies to battle negative reviews appears to be a key component of the ROR business strategy. That’s alarming, to say the least.
There are other reasons to question the veracity of the complaints lodged at sites like Rip Off Report. Some contributors are obviously disturbed and/or of limited intelligence. You’ll notice a variety of obviously baseless reports and a tendency amongst those “squeaky wheels” to wedge any inconvenience into the “evil conspiracy” category.
Being a smart consumer is great. Self-education can be one of the best ways to protect your money. Sites like Rip Off Report, however, aren’t the best place to get an education.
In our next post, we’ll discuss a few ways to get better information about the quality and legitimacy of those with whom your considering doing business and a few other consumer education tips.
NOTE: By the way, if you’re interested in learning more about ROR and its founder, I strongly recommend a rather lengthy article that originally appeared in the Phoenix New Times. I think it’s at least somewhat fair to the site and its operator, Ed Magdeson, and it’s a lot more comprehensive than other criticisms of the site. Let me add that whether you love or hate the site, it’s certainly a very interesting story.
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Online Consumer Education & Rip Off Report (Part 2) How to Dispute Your Credit Report How To Get An Experian Free Credit Report Can Lexington Law Firm Help You Repair Your Credit Score? Comparison of Online Credit Report and Score Websites 
[...] Online Consumer Education & Rip Off Report (Part 1) [...]
While you raise some valid points about being careful about what you read online, I disagree with your overall judgment on Ripoff Report. Yes, there are oddballs there, but I have found overwhelmingly that most people who comment there have a valid argument. I use the site for researching trends in ripoffs and scams, and I think you can safely say the 80-20 rule applies here, where 80% of what’s there is valid. Even the newspapers can hardly get that right, given retractions and corrections, etc., and they claim to print only the truth! The truth is that everything is biased, down to the choices made by editors as to what goes on the front page or in the newspaper at all.
As to your points, no, the customer isn’t always right, but the customer always has something to teach the savvy listener. What is it that customer REALLY wants? Companies need to learn to listen and respond better.
As to the lack of editorial control, frankly I can’t imagine how they could possibly investigate every claim made. It’s a he said-she said problem most courts take months, even years, to determine and at great cost. To attempt it is foolish, just as any comments made here or at any blog won’t be investigated for truth.
As for the money bit, I see it as a necessary part of doing business, and view it more like PR. Magedson investigates when he is paid to do so, just like any investigative reporter. Heck, I don’t know any reporters who work for free! So, I figure he deserves to get paid, plus he’s adding an Editor’s note that works like PR, so if people see it at the top, they’ll know those claims have been investigated, and the company has agreed to make customers happy. How is it any different from paying an advertising agency to write PR for you, or to buy a banner ad at a popular website? I just don’t see the difference. And don’t be fooled, a good PR person will cost you thousands for that kind of exposure.
So, yeah, people should be careful when they read Ripoff Report, but they should be careful when they read ANYTHING on the internet, and even what they listen to on the radio. I say use it as a source and recognize it for what it is: a complaint site that can help you avoid being ripped off. It’s always best to have lots of opinions and do lots of research before committing to anything involving money, and ROR is one site among many. It’s a reference, but it’s hardly the only book in the library.
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80% validity? I might be a little negative, but that’s VERY, VERY optimistic.
I checked products and service providers with whom I’m familiar. Some of the complaints had merit, but the majority of them involved some combination of whining, unrealistic expectations, outright ignorance, sorry-to-say-it-but-it’s-true stupidity, etc.
Maybe other areas on the site are more attuned to reality. I suppose that might be the case.
The reason ROR doesn’t submit the posts to editorial scrutiny isn’t simply a matter of efficiency, although the volume would be challenging. The intentional failure to edit allows ROR to claim safe harbor protections against lawsuits that aggrieved companies might otherwise pursue.
Comparing a payment to ROR to mitigate nasty reviews left on the site to hiring a good PR person doesn’t make sense to me. I know exactly what it costs to hire a good PR firm and to get that kind of exposure–and I know they earn it by doing real work. I write ads, marketing materials and press releases for a living. The folks at ROR just toss up a few paragraphs on their site and collect checks for the effort. In essence, they get paid to counteract their own ugliness–even when that initial ugliness is wholly without merit.
ROR isn’t the only book in the library. We agree on that one. Personally, I wouldn’t bother checking it out even if it was the sole remaining volume, personally.
There are plenty of ROR haters out there who have all sorts of nasty things to say about the site and its administration. I’m not interested in piling on… I am interested in pointing out that the content of the site shouldn’t be taken very seriously, though.
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Julie, you clearly have never had a false report posted about you on ROR or you would think again about using it as a resource. When you wake up one morning and you google your name and find that according to an anonymous poster on ROR you are a convicted criminal and a thief, scammer and robber you will then understand the reality of this evil site. The very least that should happen is that there is a dispute process for the falsely accused like my3cents has although not particularly useful either at least they recognize with some common decency that a person deserves the right to dispute a false complaint without running up a huge legal bill. The sooner CDA 230 is repealed the better as a private citizen I have the right to the same defamation protection online as I so offline thanks to CDA 230 and its abuse by sites lilke ROR I get no such due process.
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