Categories
Weight Loss Products

How Airbnb Uses Payments To Stay Competitive





Consumers who rent a vacation home through Airbnb must trust that the keys will be there for them upon arrival, as much as the host must trust that they’ll be paid in a timely manner, and that their property won’t be damaged.

As the sharing economy grows globally, fostering that confidence and trust between buyers and sellers has become more crucial for platforms to stay relevant and competitive. They must also excel at securely handling payments and personal data, while recommending services at the right moment to enhance transactions along the way.

In the new Payments And The Platform Economy Playbook series, powered by Yapstone, PYMNTS examines the latest developments in the platform economy, and seeks to offer a roadmap for managing risks, optimizing rewards and creating a trusted business environment.

Around the Payments and Platform Economy World

A job marketplace platform in India is looking to connect trained trade workers with employers. Co-founder and CEO Pravin Agarwala of BetterPlace asserted that more than 60,000 workers have been onboarded since its 2015 launch, and more than 1,000 large employers are using the service. The digital platform provides hiring, training, compliance management and payroll solutions to its clients, and is geared toward the facilities management, private security and logistics industries, to name a few.

Further east, Airbnb is taking off in South Korea, with a reported 2.9 million tourists using the platform in 2018, a 56 percent increase over the prior year. While hosts in rural communities are legally allowed to accept both Korean citizens and foreigners as guests, hosts in urban areas can only accept those from outside the country. The South Korean government indicated it intends to ease restrictions on urban hosts, as a homesharing bill was submitted to its parliamentary committee on culture, sports and tourism in 2017 — a move that would help normalize and boost the homesharing industry in the country.

This is not to say, though, that sharing economy platforms are completely ironclad. Cybercriminals have recently targeted apps like Uber and Airbnb to launder money, which is then further used for committing illegitimate activities. Platforms need to pay careful attention to fraud across dozens of markets, meaning the ability to detect and manage fraud will only become more crucial as the sharing economy grows.

Read these and the rest of the latest headlines in the Tracker.

Airbnb on Payments, User Friction and Security Challenges in a Global Market

As sharing economy platforms expand globally and become more popular, the pressure is on to cater to consumers, and offer seamless experiences to both buyers and sellers to remain competitive. This means localizing their services and not taking a one-size-fits-all approach when it comes to payment methods and user experiences.

With more than 5 million worldwide listings, Airbnb has to stay up to date with local, state and national digital security regulations as it operates in over 191 countries, according to Logan Vander Linden, payments partnerships lead for Airbnb, in a recent PYMNTS interview. In this month’s feature story, Vander Linden explained how Airbnb works to stay compliant in each market as worldwide competition grows fierce.

Find the full feature story in the Playbook.

HomeAway’s Wins and Losses in the Ever-Competitive Sharing Economy

Renting a room or home online — or through a mobile app — is familiar to consumers, who are used to browsing and booking listings with a few taps on their touchscreens. However, that familiarity creates challenges for homesharing companies, which need to capture customer loyalty in an increasingly competitive market. Their user experiences need to be easy and friction-free, no matter the churning waters in the back end.

In the latest Playbook, PYMNTS analyzes how HomeAway is treading the rapidly changing market conditions. HomeAway is navigating the changing regulations, shifting consumer behaviors and all the other challenges that come with global expansion, as it works to stay competitive. To read the Case Study, download the Playbook.

About the Playbook

The monthly Payments And The Platform Economy Playbook series, a collaboration between PYMNTS and Yapstone, aims to help platform payment decision-makers identify and manage the risks and rewards inherent in shaping their approaches, enabling them to optimize their operations and navigate the real-time challenges they face.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS B2B API Tracker Report 

, , , , , , , , , , , , , ,

Recommended for you

Categories
Weight Loss Products

FTC’s first case over fake paid Amazon reviews targets dodgy diet pills

Illustration of a diet pill with a measuring tape wrapped around it.

The maker of a supposed fat-blocking weight-loss pill that didn’t help much with weight loss paid for fake Amazon reviews to push its false and misleading claims, the Federal Trade Commission said in a lawsuit announced yesterday.

It’s the first time the FTC has filed a lawsuit “challenging a marketer’s use of fake paid reviews on an independent retail website,” the agency said. The FTC complaint was filed against Cure Encapsulations, Inc. and its owner, Naftula Jacobowitz, in US District Court for the Eastern District of New York. The defendants have agreed to settle the case, pay a $50,000 fine, and notify past customers that there’s no scientific evidence backing up the weight-loss claims. Customers may get refunds, but it’s not definite.

The FTC said its complaint “alleges that the defendants made false and unsubstantiated claims on their Amazon product page, including through the purchased reviews, that their garcinia cambogia product is a ‘powerful appetite suppressant,’ ‘Literally BLOCKS FAT From Forming,’ causes significant weight loss, including as much as twenty pounds, and causes rapid and substantial weight loss, including as much as two or more pounds per week.

“[T]he reviews the defendants bought were posted on Amazon.com and gave the product a five-star rating,” the FTC also said. “The complaint charges the defendants with representing that the purchased Amazon reviews were truthful reviews written by actual purchasers, when in reality they were fabricated.”

In October 2014, Jacobowitz agreed to pay $1,000 to www.amazonverifiedreviews.com, a website that no longer exists but which “offered Amazon sellers the ability to “‘Push your product towards the top!’ using ‘verified’ product reviews that will ‘help your product rank better in the internal search engine,'” the FTC complaint said. Jacobowitz asked for 30 reviews and asked the operator of Amazon Verified Reviews to “Please make sure my product should stay a five star.”

The resulting five-star reviews, which were listed in the complaint, included the following:

  • “I started to using this product 2 months ago and I have lost 15 pounds already. Don’t get me wrong, I was originally 150 pounds and 5’6. I haven’t felt dizzy or anything as these 1-star reviews said, which I was worried at the beginning. Will definitely keep buying!”
  • “Wow. I’m actually still amazed that it worked way faster than I expected. I have lost 20 pounds by using these amazing capsules. The pills help you with your intake of food, cleans all toxins from your body and does not allow fat or sugar to stick. Highly recommended! 3.”
  • “This product really cuts your appetite! I didn’t eat much and i was already feeling full. I used this product for 3 month’s and I am very glad I did. It helps with weight loss. I really love it.”-
  • “lost 10 pounds in the past 2 months, while not a single pound from boobs, lol.”-
  • “made in the USA. safety ensured. 110lb to 100lb in 40 days, its beyond 5 star.”-
  • “Lost 7 pounds in one month. What more can I say? I was originally 140 pounds and 5’6. Now I felt like a model. lol.”

The FTC accused the defendants of violating US law by making false or unsubstantiated efficacy claims and by making false endorsement claims through the fake Amazon reviews.

Amazon itself has cracked down on fake reviews over the years, in part by suing the operator of websites that sold reviews. Amazon emailed Ars with a statement saying that it “welcome[s] the FTC’s work in this area.”

“Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers,” Amazon said. “Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.”

Pills don’t block fat but may cause nausea

The defendants’ “Quality Encapsulations Garcinia Cambogia Extract with HCA” pills were sold only on Amazon.com. Each pill contained 500mg of garcinia cambogia extract, which in turn included 300mg of hydroxycitric acid (HCA), and the company recommended taking two pills a day. The company sold bottles, containing 180 capsules each, for $19.99 a bottle.

According to a National Institutes of Health (NIH) fact sheet, weight-loss pill makers have claimed that the hydroxycitric acid (HCA) in garcinia cambogia fruit can “decrease the number of new fat cells your body makes, suppress your appetite and thus reduce the amount of food you eat, and limit the amount of weight you gain.”

In reality, “Garcinia cambogia has little to no effect on weight loss,” the NIH says. The NIH further says that Garcinia cambogia “seems to be fairly safe,” but “can cause headache, nausea, and symptoms in the upper respiratory tract, stomach, and intestines.”

An exhibit in the lawsuit provided this screenshot of the now-deleted Amazon page from February 8, 2017:

Few details on refunds

The FTC has not said how many customers bought the product.

The proposed settlement includes a judgment of $12.85 million, but most of it would be suspended, and defendants would be ordered to pay the FTC only $50,000. The deal letting Cure Encapsulations and Jacobowitz off the hook for most of the financial penalty “is expressly premised upon the truthfulness, accuracy, and completeness of Defendants’ sworn financial statements and related documents,” the proposed settlement says.

All money paid to the commission will “be used for equitable relief, including consumer redress and any attendant expenses for the administration of any redress fund,” the proposed settlement says.

But the settlement says it’s possible that there won’t be any refunds if it turns out to be “impracticable.”

“If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Defendants’ practices alleged in the Complaint,” the settlement says. “Any money not used for such equitable relief is to be deposited to the US Treasury as disgorgement.”

“We don’t have scientific proof”

Officially, the defendants did not admit or deny any of the allegations. But they agreed to identify customers who bought the product on or after March 6, 2017, and send this exact email to them:

Subject Line: FTC says company deceptively advertised a product you bought

Dear Customer:

Our records show you bought our Quality Encapsulations Garcinia Cambogia Extract with HCA product. The Federal Trade Commission (FTC), the nation’s consumer protection agency, has charged us with deceptive advertising. To settle the case, we have agreed to send this notice to people who bought our product.

According to the FTC, we deceptively claimed–among other things–that our product causes significant weight loss, is a powerful appetite suppressant, and blocks the formation of new fat cells. We don’t have scientific proof for any of those claims.

You might want to look at the attached National Institutes of Health fact sheet on dietary supplements for weight loss. It discusses common ingredients in weight-loss dietary supplements, including garcinia cambogia. It says, “Garcinia cambogia has little to no effect on weight loss.” The fact sheet also addresses other topics, including whether weight-loss dietary supplements can be harmful and choosing a sensible approach to weight loss.

Sincerely,

Naftula Jacobowitz Chief Executive Officer Cure Encapsulations, Inc.

The emails would have to be sent within 30 days after the settlement is approved by the court.