We have had many Fight Back! readers contact us about how the website Yelp! has hurt their businesses. Upon further investigation, we have come across numerous stories detailing how Yelp! defrauds its users and often blackmails business owners in return for good reviews on the site. Here are some stories that warn about Yelp! and their unfair business practices.

—-

Here is a quick summary of what Yelp! is:

When you go to a new restaurant and have a good experience, it’s likely that you won’t keep the place a secret. After all, when people enjoy a great meal, exceptional service or a pleasant atmosphere, they typically make an effort to tell other people about it. Many of us, particularly city dwellers, are naturally curious about what’s new, popular or just plain good around town, and sharing with others is one of the easier and more reliable ways of establishing the best locations. The same goes for many other types of businesses or services — drivers often recommend a good mechanic to people looking for affordable, honest work on a car, while someone in need of a new doctor might ask around for recommendations.

But it can work the opposite way, too. If you go to a restaurant and have a terrible time — maybe the food is unappetizing, or the service is poor — you want to warn others about it. Instead of allowing your friends to suffer through an expensive meal that most likely won’t satisfy, maybe you recommend they think twice about their choice of restaurant and suggest somewhere else to enjoy a night out.

Businesses live and die by this kind of communication, and now the Internet has made it even easier for word to spread quickly about the quality of all kinds of services. One of the more popular social networking sites that focuses on reviewing businesses and sharing information about them is Yelp.com. Founded in 2004 in San Francisco, Calif., the Web site is like a large online bulletin board featuring user-generated content, all geared toward personal reviews based on experiences at local businesses. Yelp takes a Web 2.0 approach to their sites, where members run the show as far as sharing, reviewing and communicating is concerned. Although the company is based out of San Francisco, its set up online communities in every major city in the United States and can be found in several other countries, too. Yelp has recently expanded its reach to Canada, Ireland and the United Kingdom.

Here’s how it works:

Anyone with an Internet connection can browse the Yelp Web site. It’s easy to look through business reviews and ratings and read about other people’s experiences. When you open up Yelp’s home page, chances are the site will recognize the nearest major city or town to which you live and display popular locations and highlighted reviews. For instance, if you’re accessing Yelp from New York City, you’ll probably open up yelp.com/nyc when you type in the regular address.

But you can’t write your own reviews or follow other Yelp users if you don’t first sign up for, and manage, a personal account. Signing up for a Yelp account is basically like signing up for most other social networking Web sites — to create a profile, the site needs your first and last name, your e-mail address, a password for logging in and, if you live in the United States, your ZIP code, too. If you live in Canada, you’ll be asked for your postal code, in Ireland, your city/town and in the United Kingdom, you’ll need to provide your postcode. Your gender and age are optional. Once you’re signed in, you’re officially a yelper, the common nickname for Yelp users.

Now you can review practically any establishment in your community. To write a review, users simply click on the “Write a Review” button near the top of the page. From there you can search for the establishment you’d like to review by typing in the business name and the city and ZIP code in which it’s located. Once you select the business from the search results, you can click on the “Write a Review” button next to it. At the top of the review you can give the business a star rating from one to five, with one meaning “Eek! Methinks not!” (poor) and five meaning “Woohoo! As good as it gets!” (great). A text box where you can type your review is directly below, and there are optional selections that are either objective or subjective. You can give an average price range, for instance, or you can note whether or not they accept credit cards or have outdoor seating.

—-

Now that you understand what it is and how it works, here are stories of how it has hurt businesses:

—-

The Chicago Tribune has highlighted how Yelp! has hurt businesses:

With the Web site Yelp still responding to allegations by San Francisco businesses that it manipulates the prominence of positive and negative reviews, some Chicago merchants are adding to the heat.

They allege that Yelp representatives have offered to rearrange positive and negative reviews for companies that advertise on the site or sponsor Yelp Elite parties.

Ina Pinkney of Ina’s restaurant in the West Loop said that last summer a Yelp salesperson offered to “move up my good reviews if I sponsored one of their events. They called it rearranging my reviews.”

Since the allegations first emerged, other businesses have come forward with claims. One is attorney Jason Luros. Last fall, Luros says, there were two positive reviews for his law firm, Hudson & Luros in Napa, Calif.

“But then one of our reviews mysteriously disappeared,” he told the Tribune. “So I contacted Yelp and was given the usual canned response about how no humans control the reviews. But when I said I would consider advertising if they restored the review, it mysteriously reappeared.”

Lorenzo Puertas says his restaurant Croll’s Pizza & Deli in Alameda, Calif., also garnered several good reviews on Yelp, but when he turned down an offer to advertise with the site last fall, “at least three good reviews disappeared, and since then we’ve gotten nothing but bad reviews.”

Although the Tribune talked to several businesses that allege they were offered or received favors for advertising or sponsorship and vice versa, many also reported good experiences with Yelp. “I’ve had nothing but positive experiences with Yelp,” said Gina Karatasios, co-owner of Venus in Greektown. “Even when I called to cancel my ad with them before the contract expired, they were nice about it.”

But as the Tribune learned during a chefs round table last summer, citizen Internet review sites have proved mixed blessings to many merchants. These sites, they say, can be sources of praise and constructive criticism but also vicious attacks.

Consequently, many, especially restaurateurs, have developed a strained relationship with the site and its Yelpers. Chicago chef Graham Elliot Bowles is one of them. He says he has had his “account removed” for personally contacting those whom he felt posted reviews that were “baseless, lacking in truth or intentionally hurtful.”

—-

Here is a great general warning about Yelp! and websites like it:

Yelp.com prides itself on being a site where people can write reviews about anything and connect with similarly critical peers. Yet as the site grows, some of the businesses scrutinized on Yelp are turning the tables and griping about the company.

The complaints highlight an irony for Web sites that stimulate online communities and let users speak their minds. As the sites make the world more transparent, giving people the power to discuss everything from a great pizza to a bad date, the sites’ own transparency is often questionable, as consumers and businesses struggle to understand how they operate.

This tug of war has become increasingly public with the explosive popularity of social Web sites such as Facebook, Twitter and MySpace, as well as niche sites such as Yelp, which has more than 5 million reviews on establishments in dozens of cities.

Properly balancing the interests of various constituencies – and retaining their loyalty, perhaps through improved channels of communications – will prove key to whether the sites can grow into vibrant, moneymaking operations for years to come.

Many sites have expanded so fast that explanations about what they are doing often come late, after their users have had plenty of time to air complaints. Facebook has felt such growing pains, and now Yelp is, too.

One big gripe from businesses that get reviewed on Yelp is that they don’t quite get how it works.

For instance, some wonder why users’ reviews can seemingly mysteriously disappear from Yelp’s pages about a business.

This irks Leslie Tagorda, owner of a San Francisco-based Web design company, Flair-Designs. She has noticed reviews vanish from the Flair-Designs page on Yelp over the past two years. This worries her because the more reviews she has, the more calls she gets from potential clients, she said.

When she first noticed reviews disappearing, Ms. Tagorda contacted clients who had written the comments, to see whether they had deleted them. They said they had not.

She e-mailed Yelp and was directed to the business owners’ section of the site. Not satisfied, she aired her issues by writing a review of Yelp itself on Yelp’s business page, giving the site two out of a possible five stars.

At last she got a more personal message from Yelp’s chief executive and co-founder, Jeremy Stoppelman. He explained that consumer reviews may be removed by an automated program that is designed to filter out reviews the site considers untrustworthy, such as sniping that a pizzeria owner might write about a competitor.

Ms. Tagorda was satisfied with Mr. Stoppelman’s response but still wanted people to see what she felt were legitimate reviews that Yelp had hidden. So she put up a post on Yelp about her own business, indicating the names of users whose Flair-Designs reviews have disappeared.

So far, her post about Yelp has stayed up, and she recently added a star to that review, updating it to say she’s “becoming a little happier with Yelp as a business owner.” Still, the whole episode has her feeling murky about the site.

“I think they should be clearer about how reviews are displayed on people’s profiles and what happens with bad reviews,” she said.

Mr. Stoppelman defended the quiet way Yelp takes some reviews down, saying that if the company offered a more detailed explanation of the process, people might be able to get around it. (Online retailer Amazon.com Inc. also uses an automated program to filter user reviews, though Yelp’s main competitor in the business-review market, Citysearch, does not.)

Mr. Stoppelman acknowledged that the fluctuation of the site’s reviews “flusters and surprises a lot of business owners.” Some explanations are in the site’s “frequently asked questions,” but not everyone reads those.

“We need to figure out how we make this bonk-you-over-the-head obvious, so that everybody understands, ‘Look, this is going to happen,’ ” he said.

Mr. Stoppelman thinks there will always be tension between Yelp and business owners because consumers are creating the content, which is inherently unpredictable.

—-

Do you use Yelp!? Do you read reviews or contribute reviews on Yelp!? Has Yelp! hurt your business? Email david@fightback.com and share your story with me and Fight Back! readers.

Article by Fight Back! Reader and financial writer Regina King, currently associated with Oak View Law Group. She has been consistently providing people with unique advice on investment,budgeting and debt settlement since 2007. You can reach me at: regina.king85(at)gmail(dot)com.

The Federal Trade Commission prevents the consumers from associating with fake debt settlement companies. The industry has recently gauged a steady growth in the scam companies. So the reputation of the legitimate debt settlement companies is being tarnished by the fraud companies. Therefore, before you hire debt settlement services you should know the following things.

1. FTC prohibits the debt settlement company from taking up front fee. These settlement companies need to provide evidence of negotiation with the creditors before charging for their services. Make sure that you check the following things before providing them with the service charge:

• Check the amount of debt that the company managed to reduce
• Check the settlement letter where the creditors have given his consent to the settlement amount
• If you have started making payment in accordance with the new settlement agreement

2) According to the Federal Trade Commission, the debt settlement companies are required to disclose all information regarding the fee and settlement process to their clients. The information that the company needs to disclose to its clients are as follows:

• The effect of settlement process on your credit report
• The success rate of the settlement process
• The expected length of the settlement program
• The companies should not misinterpret facts according to their convenience.

3) The consumers need to maintain a dedicated account according to the request of the settlement company. These accounts can be utilized to save money for fees and payments. According to the FTC rule, the clients can access and withdraw money from the account without attracting penalty. The debt settlement companies will be violating laws if they exchange referral fee with the financial institution.

Although the settlement companies agree that the industry needs to be more transparent in its dealing. But these companies have vehemently acted against the banning of upfront fees. According to sources, the debt settlement companies are planning to go out of business as the FTC has banned taking upfront fees.

The new rule enforced by the FTC helps to protect the vulnerable consumers from associating themselves with fraud companies. The new changes brought in the Telemarketing Sales Rule have affected the debt settlement companies.

These rules have been implemented by the FTC to secure debtors from fraudulent, deceptive, and unfair business practices of the illegitimate collection agencies.

Regina King is a financial writer and currently associated with Oak View Law Group. She has been consistently providing people with unique advice on investment,budgeting and debt settlement since 2007. You can reach me at: regina.king85(at)gmail(dot)com.

The Consumer Financial Protection Bureau

The bureau, which officially opens for business July 21, will be empowered to protect the American consumer from unfair, deceptive or abusive practices. As envisioned by Dodd-Frank, the Consumer Financial Protection Bureau (CFPB) will:

• Improve disclosure about financial transactions
• Promote fair competition
• Reduce outdated or overly burdensome regulations
• Simplify paperwork and eliminate fine print that hides fees, penalties and other important information
• Hold companies accountable if they break the law

It’s hard to see what can be wrong about any of that, especially after well-documented abuses of the system brought the world’s largest economy to the brink of disaster.

Yet Republicans in Congress have never liked the idea of creating this new agency. They believe it is unnecessary and way too powerful. They’ve introduced a series of bills designed to muzzle this watchdog.

In a statement last week, Elizabeth Warren, the Harvard law professor President Obama tapped to create this consumer agency, said the bills are designed to “defund, delay and defang the consumer agency before it can help one family.”

“These bills are about preventing the CFPB from operating effectively — a dangerous game to play in light of recent lessons in the marketplace and how quickly financial threats to consumers emerge,” she said.

Consumer groups across the country have launched a full-scale counterattack against the proposals.

“This agency will simply make sure costs and risks are presented clearly, so each of us can make smart financial choices,” says Ruth Susswein of Consumer Action.“Why should this be so threatening?”

“A vote to roll back this consumer protection bureau is a vote for the kind of predatory lending that got us in this mess and cost taxpayers so much,” says Kathleen Day with the Center for Responsible Lending.“It will make the recovery take longer, and we will end up with another bubble and bust.”

“Consumers are still dealing with financial tricks and traps even after Congress passed financial reform last year,” notes Travis Plunkett, legislative director at the Consumer Federation of America.“So we need a consumer protection bureau more than ever, to provide a cop on the beat to help consumers.”

Consumer advocates are also taking on the financial institutions that want the CFPB weakened.

“The banks do not want a regulator that is truly independent and has only one job, protecting consumers,” says Ed Mierzwinski, consumer program director at U.S. PIRG.

“Businesses that are playing by the rules and being fair to customers will benefit from the work that the bureau will do,” says Sally Greenberg, executive director of the National Consumers League.“Anybody who is trying to pull a fast one is not going to do so well, and that’s as it should be,” she says.

“Reputable banks and reputable business people have absolutely nothing to fear from this agency,” says Ellen Bloom with Consumers Union,the publisher of Consumer Reports. “We just want to give the consumer an even shot and get back to clarity and simplicity and make things less confusing for them.”

People are confused. Consumer Reports conducted a national poll about financial services last year. An overwhelming majority (84 percent) of those responding said they had applied for a loan or credit card in the last 12 months and had some difficulty in understanding the terms of what they were signing.

The CFPB wants the new standard to be: a simple and straightforward presentation of information that tells people the true cost of financial products and what the risks are.

Just last week the agency proposed simplified mortgage disclosure forms. These prototypes are shorter and easier to understand than forms given to potential borrowers now.

Warren says a clear and simple disclosure form will help people decide if they can afford the loan and make it easier for them to shop around for a better deal.

The CFPB wants consumers and lenders to comment about these disclosure forms on its website.

Solving problems
The Consumer Financial Protection Bureau plans to set up a system to accept consumer complaints and publish them on its website. The Consumer Product Safety Commission and the National Highway Traffic Safety Administration have similar complaint databases.

The CFPB would use this information to answer questions, try to help people solve their problems and use the complaints to take action against those who are not following the law.

“One of the beauties of this agency is that you will not just send in your complaint and hope that someday the agency will sue a company for its wrongdoing,” notes Ruth Susswein with Consumer Action. “It actually has to respond to consumer complaints. It has to interact with people and not just collect complaints and that will be huge.”

My two cents
The last Congress created this agency and the new Congress needs to give it a chance. I’d ask lawmakers to consider the words of Jamie Dimon, chairman and CEO of JP Morgan Chase. In his April report to shareholders Dimon wrote, “Strong regulatory standards, adequate review of new products and transparency to consumers all are good things.”

A Guide For Frequent Flyers

If you fly a lot, you likely take part in one of the airlines’ frequent flyer programs. Here are the highest rated programs of the skies:

Forget expirations, blackout dates and restrictions, there are some frequent flyer programs that are actually worthwhile.

For starters, Southwest debuted a new and improved Rapid Rewards program March 1 to a warm reception by travelers and industry groups alike. In fact, Southwest was Smartertravel.com Editors’ Choice winner for best new frequent flyer development of the past 12 months.

Under the new system, points are earned according to the price of the ticket and its seat class (members earn 12 points for every $1 on business fares and 10 points for every $1 on anytime fares). Those points can be redeemed for Southwest flights as well as rental cars, hotels and gift cards for Amazon or iTunes.

Earn 35,000 points or more and score an upgrade to A-list status, which means priority boarding and — better yet — priority check-in and security lane access.

TrueBlue got a makeover a little over a year ago with some major improvements. Most importantly, the program did away with blackout dates and point expirations altogether.

Now, members can redeem their points for any seat on any flight with at least 5,000 points for a one-way and 10,000 points for a round-trip ticket.

Users get six points for every dollar spent on a flight at jetblue.com but can also accumulate points on purchases from a JetBlue partner. For example: join Netflix and earn an easy 1,500 TrueBlue points right there.

“This is definitely a more user-friendly program that allows our customers to make the most out of the points providing them with more options and flexibility,” noted Mateo Lleras, a JetBlue spokesman.

With a large legacy carrier program like Delta’s, members earn SkyMiles according to how far they fly, rather than to how many dollars they spend. And earning miles is easier because there are so many more partner companies, from FedEx to Fidelity, that offer ways to get bonus miles with everyday purchases.

Thinking of opening a brokerage account? That could get you 50,000 bonus miles — enough for two free round trips.

SkyMiles is very much in line with the other major carriers’ frequent flyer programs with one notable exception: Delta recently implemented a new policy eliminating its mileage expiration, so members can use their miles at any time. The change was effective for all accounts as of Jan. 1 of this year, propelling Delta to the front of the pack.

“Since Delta’s miles no longer expire, they have the advantage,” noted Tim Winship of FrequentFlier.com.

Alaska Airlines has one of the best frequent flyer plans on the market, even for travelers that live far from its hub. Members from all 50 states earn miles every time they fly Alaska Airlines, Horizon Air, or any one of its airline partners, which include Air France, American Airlines, Delta Air Lines and British Airways.

Like the larger carrier programs, users earn miles according to how many miles you fly (rather than how many dollars you spend). A domestic round-trip fare starts at 25,000 miles, but members get 500 bonus miles just for signing up and miles don’t expire as long as your account is active within a two-year period.

Members can also redeem their miles for trips on any of the many partner airlines as well. “That added flexibility gives them a leg up,” said Christopher Barnard, president of Points.com, a reward program management site.

Virgin seems to have its finger on the pulse of what travelers want, like satellite TV and flattering in-cabin lighting and that extends to its rewards program too.

Users earn five points for every dollar spent on Virgin flights but can accumulate points in more fun ways as well. For example, join Gilt Groupe and get 500 points with your first purchase or earn 25 free points simply by “checking-in” using Facebook, Foursquare or Twitter at a Virgin America terminal, gate or baggage claim. With as few as 2,500 points, users start flying free.

There are also no blackout dates or restrictions on reward flights and miles don’t expire as long as your account is active within an 18 month period.