The “Yelp Class Action Website” (Law firms, Beck & Lee from Miami and The Weston Firm from San Diego) cites to previous stories of similar behavior reported by The Wall Street Journal and others alleging review and rating website operator Yelp of unfair business practices.

The lawsuit alleges that Yelp runs an “ext ortion scheme” and has “unscrupulous sales practices” in place to generate revenue. It cites as example that company employees call businesses monthly, demanding payments vis-a-vie advertising contracts, in exchange for allowing the business the authority to remove or modifying negative reviews.

The plaintiff in the suit, includes a veterinary hospital in Long Beach, CA. They allege that they contacted Yelp to inquire about removing a negative review from the website, which was allegedly refused by Yelp. However, just as has been alleged by many others in the past, sales representatives began to contact the plaintiff repeatedly offering an opportunity to allow them to effectively control the order of review and even hide negative ones for the hefty fee of $300 per month in advertising.

This is certainly not the first time this has been heard of. As of the past few months similar stories have sprung up all across the blogosphere with alleged accounts of Yelp running up tabs at restaurants and other venues in exchange for good reviews or to hide negative reviews. In some cases, business have alleged that once they stopped their advertising contracts with Yelp they would immediately see a rise in negative reviews and suddenly entire groups of positive reviews would disappear.

Among the many explosive stories that emerged last year include on published by East Bay Express, which basically accusing Yelp of being in the ‘Business of Extortion 2.0′, which account numerous similar incidents by business who had claimed to be strong armed by what sounded like a Mafioso Yelp sales team. This fear was so pervasive that some business owners feared the retaliation would hurt their business and asked that their identities be concealed. Shortly after reporter Kathleen Richards published the article, Yelp vehemently denied everything and called her piece inaccurate. However in light of so many strangely familiar stories being told by business alike, it seems that some legal pursuit was clearly inevitable.

Namanh Hoang, co-founder of Baduku.com recently commented on the topic on the Techcrunch.com website, responding commentary about Yelp’s business policy and whether they should be updated.

Well, business conduct doesn’t necessarily have to be published to the public. A code of conduct is internal and even still isn’t instilled in paper but by the moral and ethics of it’s employees and environment. Somewhere inside Yelp they must have slowly bread this type of mentality that has been passed on over time and now becomes expected. Each new recruit is indoctrinated into the system of promoting the site via extortion and coercion. Lets just say I don’t think it’s easy to just change on paper. They may have to get rid of a lot of the management to make the new policy trickle down appropriately.

Yelp the company can and should be held accountable for the actions of it’s employees and this complacency probably extends far up the ladder. Yet there are probably just as many good people at Yelp who have attempted to fight this type of unethical practice but are probably silenced by the majority or even working in fear of proposing change. Yelp needs to have an overhaul and perhaps start nurturing the good aspects and good employees that still remain. Until then there are plenty of competitors ready to step up to the plate and lead by example with their own ideas such as baduku.com, hunch.com, and lunch.com.

Recently TechCruch.com has obtained this response from Yelp which is posted on their website at techcrunch.com: