Review sites like Yelp are enormously helpful for consumers when they're looking to see if a business is indeed legit, and such sites can be beneficial for the businesses themselves if they build up a history of feedback from satisfied customers.
But there's also a downside for businesses, in that just one bad review can have a huge negative impact on a company's reputation, resulting in missed job opportunities and a subsequent loss of revenue. In most cases, those that receive negative reviews probably deserve them, but there's always the chance that a company's reputation can be sabotaged by 'fake' bad reviews.
According to one Virginia builder, that's exactly what happened to him when a customer refused to pay outstanding bills. In an attempt to collect the money owed to him, Christopher Dietz has filed a lawsuit against one of his customers, only to discover later that the person in question had given him a '1 star' rating on Yelp, accusing him of charging her for work that was never completed and also stealing jewelry.
Unsurprisingly, Mr. Dietz reckons he's lost quite a bit of business due to this negative review, but he's refusing to take it lying down, filing a lawsuit against the woman that he says has sabotaged his business.
Dietz has filed a lawsuit asking for $750,000 as compensation for lost business and harming his company's reputation, claiming that he's missed out on many new contracts as a result of that bad review.
Dietz might not be able to prove beyond all doubt that his company has suffered due to the negative review, but his arguments are backed by a recent Harvard study that suggests a one star increase in overall rating can lead to a 5% to 9% increase in revenues. He can also take heart from a similar case last year, which according to Forbes, saw one unnamed company rewarded with a $1.6 million payout after a blogger had alleged it stole money from him.
However, Dietz case is likely to be a tricky one for the courts to decide, as cases of this nature are often very complex. Forbes explains:
'These lawsuits are tricky since they present a conflict between freedom of speech and a company's online persona. Freedom of speech, however, doesn't extend to defamatory statements. Since defamation must be based on a false statement in order for the writer to be held liable, lawyers advise writers of these reviews to stick to opinions and truths. If you don't lie, misrepresent yourself or exaggerate your experience, you should not be held liable.'
Ultimately, Dietz will have to prove that the woman in question was lying when she posted her negative review, something that will no doubt be further complicated by the fact that the pair were once classmates in high school together.
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