Class action fraud suit filed against Yelp

This lawsuit is no surprise to me.  I’ve been hearing stories about Yelp’s shady practices for months so now they’ve been documented here in this class action complaint filed in LA Federal Court late last month (link to complaint here).

The fact pattern in question is that a small business receives a negative review and gets a call from a Yelp representative who offers to take down the negative ad if the merchant agrees to advertise with Yelp for six months.  If the merchant cancels the advertisement after the six months the negative ad reappears.

There are lots of problems with this approach to running a business if these allegations are true but undermining trust is paramount, the trust that the negative ad is in fact legitimate and not something encouraged or written by Yelp.  The trust that consumers receive an accurate representation of what people think of a business.

Impact on attorneys:  This lawsuit and the behavior it alleges suggests the dangers of not being active on the Internet.  You maybe a terrific lawyer but if one person writes something negative about you and you don’t have a website or any other social networking presence then this negative review could receive undue prominence.

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