- A fake Walmart press release announcing a partnership with a cryptocurrency duped the media and investors.
- Press release distribution has major blindspots when it comes to verifying information.
- The fake press release got significant traction, after it was up for two hours.
- See more stories on Insider’s business page.
A GlobeNewswire spokesperson told Insider that a fraudulent user account issued the press release and that the company has implemented new steps to prevent repeat incidents, but did not elaborate further.
But press release distributors remain at risk because they issue thousands of press releases per day, especially during busy parts of the year like earnings season, said Charlie Terenzio, CMO at Newswire, a competitor to GlobeNewswire.
“There’s always going to be one-off situations that put a strain on the systems and processes you’ve developed,” Terenzio said. “Overall, it’s really important for us to use technology on individual platforms and to have manual checks and balances.”
When Newswire issues a press release about a partnership between two companies – like the fake release that claimed Walmart was working with Litecoin – it requires written permission from a ranking marketing or C-level exec, Terenzio said.
BusinessWire’s editorial teams would double check if phone numbers on press releases matched the company headquarters, or they’d verify that the author of the press release works at the company they claim to represent, said former president Gregg Castano.
But that tremendous volume means it’s impossible for editors to manually contact every company listed on every press release, said Castano, who’s now CEO of press release distribution startup Newsdirect.
“No matter how many failsafes you have in place, nothing is ever going to be foolproof,” he said.
So while Cision, the world’s biggest PR software firm, said it vets more than 400,000 press releases every year to prevent the spread of misinformation, it does not claim to be the final line of defense.
“Ultimately it is our clients who author and are responsible for their own content,” a Cision spokesperson said.
Press release distributors also struggle to balance ensuring the information they disseminate is accurate with being easy for clients to use.
While some distributors call new clients directly to verify that they are who they say they are, Terenzio said Newswire doesn’t require a call to make it easier for new clients to join and send releases.
Another issue is that algorithms that amplify news on social media, across search engines, and trading platforms means errant press releases need to be taken down immediately. The fake Walmart-Litecoin release went out at 9 am and wasn’t taken down until after 11 am.
The effects that bad actors have can move markets. When the fake Walmart release came out, Litecoin’s value spiked more than 30%. After Walmart and GlobeNewswire disavowed the statement, Litecoin plunged back to its original value.
And the Walmart-Litecoin fiasco isn’t an isolated incident. In 2013, a fake press release from Sweden-based Fingerprint Cards falsely claimed it was being acquired by Samsung for $650 million and in 2010, a fake press release was falsely claimed then-US President Barack Obama ordered an investigation into the food company General Mills.