The FTC and six states just announced that they had filed a lawsuit against Roomster – a platform through which people can find rooms and roommates – along with its owners, alleging that they had "inundated the internet with tens of thousands of fake positive reviews to bolster their false claims that properties listed on their Roomster platform are real, available, and verified." At the same time, the regulators announced a settlement with an individual who allegedly sold Roomster many of the fake reviews.

Roomster advertised that its platform had "millions of verified listings" in a "safe community with real members worldwide." To test how well Roomster verified the listings, the regulators listed a room for rent on the platform at an attractive price. Had Roomster attempted to verify the review, it would have learned that the address of the listing was actually a US Postal Office commercial facility. According to the complaint, though, Roomster never asked any questions.

To bolster its marketing campaign, the company allegedly flooded the internet and app stores with tens of thousands of 4- and 5-star reviews, many of which were fake. In fact, Roomster bought over 20,000 reviews from AppWinn alone. (More on them later.) Emails between Roomster and AppWin show a detailed plan addressing how and when the reviews should be posted. According to the complaint, the number of positive fake reviews diluted the real reviews, many of which warned of scams on the platform.

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