Yelp Accused of Alleged Extortion Scheme

Yelp has built its brand around consumer trust and site transparency. Since its founding in 2004, the popular consumer-generated business review site has generated over 9 million consumer reviews that rate local businesses, providing some of the most genuine consumer-driven insights on the web.

However, news broke last week that threatens all the good will that Yelp has ever amassed.

Local businesses have filed a Class Action Suit against Yelp over allegations that Yelp has removed or pushed down business reviews in exchange for money – an implication that not only threatens Yelp’s reputation, but the company’s entire business model as both are so intrinsically linked.

Yelp Chief Executive Jeremy Stoppelman denies the claim that Yelp sales reps are offering to take down negative reviews for money, but as the complaints have persisted for over a year, doubts have begun to gather.  Media coverage of the issue has reached the New York Times, Wall Street Journal, Mashable and beyond – which has created a PR nightmare for Yelp.

Whether Yelp has actually been tainting their reviews or whether this entire crisis is, as Stoppellman suggests, the unfortunate miscommunication to businesses on the behalf of the Yelp sales team, it will remain a thorn in Yelp’s side until it resolves itself. It will certainly influence the way the 26 million Yelp site visitors read their reviews.

Brands should take note at both the media firestorm created by Yelp’s non-authentic adventures and the negative consumer reaction to Yelp’s questionable ethics. While bad reviews may be frightening at times, it certainly beats consumers’ mass mistrust of a brand’s platform or product. While Yelp will likely remain an intact source of customer reviews after the Class Action Suit has been resolved, consumers’ seeds of doubt regarding the site’s authenticity have been planted and will take a far longer time to settle — out of court.

For more details about the Class Action Suit against Yelp, please view Mashable.

Posted via web from Speaking of Social Media

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