Reviews Site Yelp Hit With Fraud Lawsuit

A screen capture of popular reviews Web site Yelp. A recent lawsuit accuses the site of essentially fraudulent reviews. (Yelp.com)

A suit filed against San Francisco's Yelp Web site alleges that the services it provides -- consumer-driven reviews of restaurants, retailers and products -- are in essence fraudulent, the Wall Street Journal's Law Blog reported Friday.

The allegations, embodied in a lawsuit filed in Los Angeles federal court on Wednesday, go like this: On some occasions, if someone posts a negative review of, say, a restaurant, Yelp workers will call the restaurant and offer an advertising package whereby for, say, $300, the restaurant will get some advertising on the site as well as the bad review removed.

The complaint is chock full of alleged examples, like this one:

"Mary Seaton, the owner of a furniture store in San Mateo, took Yelp up on an offer to remove her negative reviews if she advertised at a cost of $350 per month for six months. During that time, her negative reviews were removed and old positive ones showed up. After her contract was up, a negative review appeared, which Seaton said contained lies."

Furthermore, according to the complaint, Yelp employees have, on occasion, written negative reviews of businesses.

Yelp has yet to respond to the suit in court, but issued this statement to TechCrunch, claiming it will defend the suit “aggressively.”

"Yelp provides a valuable service to millions of consumers and businesses based on our trusted content. The allegations are demonstrably false, since many businesses that advertise on Yelp have both negative and positive reviews. These businesses realize that both kinds of feedback provide authenticity and value. Running a good business is hard; filing a lawsuit is easy. While we haven’t seen the suit in question, we will dispute it aggressively."