August 30, 2014

Yelp Sues Business For Faking Its Own Reviews

Fake Yelp reviews

Yelp filed suit against a business (a law firm no less!) over what it claims are fake reviews the business created for itself.  While there have been stories before of companies “outed” for being behind fake review efforts, and even FTC complaints, Yelp filing a lawsuit is new.

Yelp claims that the McMillan Law Group, of San Diego, had employees create fake accounts to leave positive reviews.

Mike Masnick at TechDirt observes that the firm’s employees allegedly were not very good at covering their tracks. He writes:

The filing details, rather comprehensively, how over a period of a few months, it appears that employees at the firm created accounts and immediately posted positive reviews of the firm, sometimes claiming things that are unlikely to be true. For example, certain users claim to be clients of the firm, which focuses on bankruptcy law, and then point out that the individuals in question have never filed for bankruptcy. There’s also an amusing bit in which four accounts are created, one after the other, from a McMillan IP address, each leaving very positive reviews within minutes of creation, then logging out right before another account is created. … Oh, and two of the accounts created one after the other started their posts with the identical sentence, including a typo:  They promissed [sic] me a fresh start through a Chapter 7 Bankruptcy and I got it.

Yelp also alleges that the McMillan law firm participated with a group of other San Diego law firms, to “trade” favorable reviews.

The basis for the lawsuit is that faking Yelp reviews violated Yelp’s terms of service document.  Such documents are typically written as if they are a contract you agree to by using the site.  Yelp says that it was a breach of contract to write reviews about one’s own business, to write fake Yelp reviews, and to trade reviews with other businesses. Yelp also claims that under California law it was false advertising – although the standing to claim that seems tenuous.

Quite likely, Yelp deals with thousands of fake reviews on its site monthly – probably weekly. So you might wonder why it chose to file a lawsuit in this instance.

Well, it turns out that the McMillan law firm beat Yelp in small claims court in May of 2013, winning a $2700 judgment and a write-up in the Wall Street Journal.

The law firm had sued to get a refund of advertising money paid to Yelp.  The judge in that case used strong words, likening the advertising contract written by Yelp, to a Mafia protection racket.   The law firm even has a page up on its website about the judgment it won, asking small businesses that have had issues with Yelp to contact them.

Yelp is appealing.

And apparently playing hardball.

Fake image via Shutterstock

40 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

40 Reactions

  1. Fake reviews is not new. In fact, most business do it at the beginning just so they can get some real reviews. It’s a good thing that Yelp is looking after things like these. It make the website a more reliable source when it come to customer reviews.

  2. Anita,

    Yes, those businesses should get sued for doing so and Yelp is doing whatever they can to protect their reputation.

    Fake reviews can be very much misleading and when customers and clients find out about the fake reviews, not only the businesses, but Yelp also suffer the consequences.

    I do wonder how Yelp is discovering who’s cheating…

    • Hi Ivan, I’m quite sure Yelp has lots of information about who is accessing the site and their activity. And if the facts contained in the lawsuit are found to be true, then I’m sure it was easy to trace the activity.

      Faking reviews is a bad thing, I agree. It erodes the public’s trust.

      Regardless of any past history involving the two parties, fake reviews should not be allowed to stand. No matter who does them.

      - Anita

    • no F**king way that Yelp discovers who is cheating…! Yelp discovers and only cares who is paying for their advertisement, so Yelp can rise their good reviews and “filter” bad ones!!! Many small businesses hurting, because of these bunch of bullshit FAKE review sites and Fake people do some f**ked up shit for money!! Sites like Yelp should have permission from Businesses to list them on their site!!

    • But what about 1000′s of business owners across the nation who are saying, including several who posted here as well as myself is, Yelp is putting fake bad reviews on businesses who won’t advertise with them. They also take good ones off, hurting their rating and hurting incoming business clients. (this would be my case)
      The sheer number of people who all have similar stories nearly unequivocally shows that Yelp is doing neither the consumer nor the businesses it exploits any beneficial service to anyone.

  3. Fake reviews are commonplace. Businesses do it to create credibility especially if it is a new kid on the block. Potential naive clients will be convinced and buy from them. This is just business.

    • In Internet Marketing, yes – fake reviews are very common. Unfortunately, people buy that and believe every words of them. That’s why such reviews run rampant in the online world – and companies doing so profit from it. Unethical, but you are correct – it’s just business.

      Perhaps taking a grass-root approach and a little background check is better: Who’s reviewing the business? How’s his/her reputation?

      But then again, Yelp should also educate visitors and users on how to know which ones are fake reviews and which ones are not.

      Not an easy task, especially online.

  4. yelp is the Enron of social networking

    If it wasn’t a scam, why is Jeremey Stoppleman dumping his stock everyweek?

  5. I think this move will backfire on yelp. Through discovery, yelp will have to disclose how their algorithm works. Plus they look like they’re bullying a small business who won a lawsuit against them.

  6. Here’s the problem, being an attorney myself. People don’t usually come in and post positive reviews of an attorney. People are usually only motivated to post negative reviews. This is because, even if they are successful in court, the whole litigation process is so burdensome that at the end, it doesn’t feel like they were successful. So not only are they not motivated to leave a positive review, if they even merely perceive that the attorney did something wrong, they will feel motivated to leave a scathing review, often anonymously. This hurts an attorney’s business. People should have to leave their full names when leaving a review so that an attorney can challenge it.

    • Anne,

      Thanks for sharing your comment – it’s a new perspective for me and it’s valuable in helping me understand from your point of view.

      The thing is, people often use the anonymity of the Internet as “tools” to say whatever they way, such as leaving bad reviews and disappearing into thin air.

      I agree that when leaving reviews, people should leave their real name so a business can redeem itself and explain things from their perspective. It’s only fair, IMO.

    • Anne, I agree wholeheartedly about the idea that people should be required to leave their real name. I can’t believe the things people say when they are “anonymous”, things they would never say in person to anyone. Also, too many take advantage of this in the wrong way from unhappy ex-employees to unethical competitors.

      • It’s so true, Kelly, about what people say when they think they are anonymous.

        We get a lot of comments whenever we review products, from anonymous cowards who supposedly had a rotten experience with a product. Or who want to tell us about a competing product they supposedly discovered and used on their own.

        Well, we don’t allow reviews to be “trashed” by someone who is anonymous, because it’s usually a competitor.

        If someone is willing to put their real name and website URL down with their comment, then and only then will we allow such comments to stand. But anyone who thinks they can lob grenades anonymously, in hit and run attacks — forget it.

        We get several of those a day. I can only imagine the volume that Yelp has to deal with on a daily basis.

        - Anita

    • I have 2 negative comments on my business. I have emailed repeativly asking to verify these reviews. No one will email me back. I do not believe they are customers. I do not have any customers by the name listed nor do the projects sound familiar. Why does Yelp not return emails and when you research to find phone number it is a message machine and no one returns phone calls?
      If the are such a great company should they not have beter business proactices?

    • Anyone who reviews or selects a lawyer for anything based on a yelp review deserves EXACTLY what they get

  7. I’m never happy to see these things go to court. That usually means tons of money being wasted on legal fees and lawyers, all over a few reviews.

  8. Yelp isn’t much more than an extortion racket. If you’re a business that has received a negative review on their site, you can’t even reply to it without paying a fee for a business membership.

    Good luck figuring out their secret algorithm that seems to only allow negative reviews until you pay that fee.

    • Hi Bildo,

      I hear small business owners complain with some regularity about the Yelp algorithm — as to which reviews are displayed and which not. I don’t have a Yelp business account and haven’t left Yelp consumer reviews. So I have no firsthand experience on that point.

      However, as a consumer, I will say that I have found some Yelp reviews helpful — especially for restaurants in strange cities when I travel.

      - Anita

      • If I were to open a little restaurant across the street from an established restaurant business. The business would have people goto yelp and leave very convincing bad reviews against me.
        Not trying to offend, but someone like you who is not aware of certain things would goto yelp to see my restaurant
        A)with several bad reviews and few good ones (i’m new remember)
        B) people using yelp to find a place would never see it, low rating=listed at the bottom.

        Then the locals will start to talk, and without anyone ever going there my place will be known as not being very good. I run out of capital and soon have to close down.

        This is the kindve influence yelp has. They exist because they have very craftily convinced the consumer that their reviews are trust worthy. And the most certainly are not.

  9. I’m sure fake reviews are common, but this business was stupid enough to get caught.

  10. Um, can we, small businesses, then sue Yelp for filtering out good reviews? We’re a coffee shop who’ve only gotten 47 reviews in over a year. Yelp think it’s doing us a favor by removing 6 to 7 5-star reviews and bombarding our email/phone line with offers for cheap advertising.

  11. I find this quite fascinating that Yelp, who has been unsuccessfully sued for its own practice of filtering reviews, now sues someone else for their using a bit of fakery in their own review process. Yes, it was unethical for doing this and I don’t condone it at all, but suing them for the effort instead of just removing their listing seems more than harsh.

    It also goes to show how powerful these reviews are at helping businesses get more business. No matter what trend or method Google or other use to make things “fair”, people will find a way to use it to their advantage. No, it shouldn’t be done, but human nature is what it is and all Yelp should be able to do is de-list them.

    • I think you guys are missing the fact that Yelp is doing this because this law firm sued Yelp in the past and offers small businesses help if they have issues specifically with Yelp. Clearly, Yelp is taking it personally that this firm has done these things AND has the audacity to blatantly fake reviews on the site.

      It’s not a feel-good story but certainly understandable from Yelp.

      • I think you are missing the fact that this lawfirm had no choice but to deal with Yelps listing. They cannot opt-out. Yelp will not, ever, take down your listing.
        You are also missing the big fact that Yelp removes reviews from the businesses it exploits (i had all nine 5 star reviews removed from my listing), which is no different than putting fake ones up.
        Yelp is pretending to fight for its integrity rather than simply close the guys account.

  12. yelp is a joke, another waste of time that is trying to build credibility by promoting there service thru a law suit.

  13. I never trust online reviews. They are too easy to fake. And how can this possibly be illegal? I saw a report on MSNBC how Yelp suppresses positive reviews, allowing negative ones to float to the top. Yelp needs to seriously reconsider how they do business.

  14. I own a small construction business. I never wanted a listing on Yelp. I got a bad review on yelp, then noticed a decline in customers calling me.
    I asked Yelp to remove my listing, they said no of course.

    After a year I had built up 9 5 star reviews, phone was ringing again. Last week Yelp removed all my positive reviews, leaving me with a single bad review.
    Business has taken a hit again. Its amazing this is legal. Yelp is hurting small businesses across the nation. Search “Yelp Missing Reviews”

    You can see the reviews Yelp removes by looking under the review on the bottom, gray letters “[filtered]” , click on that, enter provided password there they are. You can see McMillan’s on his page…no doubt Yelp filtered them all out after he won that lawsuit. He is likely locked out of his listing…legal under the terms of the agreement.

    Yelp is absolutely full of themselves, i can’t wait to see them fall….

    • Markavelli,

      Wow – an eye opener.

      I do wish someone from Yelp can help clarifying things. Because if it’s true that legit positive reviews are removed without any justifications, then Yelp is not doing what it should – helping visitors to make well-informed decisions via reviews – not mentioning the negative, direct impact to the businesses reviewed.

      • Well I have been wondering about McMillans’ pending arbitration…if it hasnt happened already. What if I showed up, with 5 or 6 my clients who had their positive reviews removed by Yelp on my listing, and had them testify that Yelp removed them? I think Yelp would look foolish for suing, and look like mafia headhunters for going after punitive damages. Not to mention open the doors to a possible federal investigation.
        Could it be that simple? And easy?

  15. Yelp is an extremely righteous company. They know the law, very well. They are exploiting a loop hole in Regs. Unfortunately the mountain of businesses affected by their nefarious ways will eventually force regulations that nobody wants. If only Yelp would stop messing with businesses it exploits. Then again, like the article says, they haven’t turned a profit since they went public on the stock market. Business advertising is their main source of revenue. It all makes perfect sense.

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