Yelp just announced that it’s releasing a new round of Consumer Alerts, slapping big warnings on top of the pages of 85 businesses. These businesses, Yelp says, are either attempting to buy or offer rewards for positive reviews or have a large number of reviews submitted from the same IP address, which the company considers “a hint that someone may be trying to artificially inflate their rating”.

We emphasized “may” because this has been a subject of heated debate between businesses and Yelp for some time. Some businesses have argued that there are legitimate reasons that reviews could come from the same IP.

Bloomberg TV ran a segment last year including a discussion with both a disgruntled business owner, and a Yelp exec.

A relevant sample from the exchange between these two went like this:

Yelp’s Vincent Sollitto, VP of corporate communications: “Yelp has to recommend reviews that they find reliable. The reason that there are a number of positive reviews for Beverly’s business that are not being recommended is because in fact ten of them came from the very IP address that was used to claim her business owner’s account, and one of them actually was for a one-star review of a competing business to hers. And so the problem is business owners try to game the system, and websites that don’t try to filter out or verify reliable reviews can get gamed. That’s probably why Yahoo decided to go ahead and use Yelp as the de facto standard for local search.”

Business owner: “First of all, in some cases, clients are at your house, and can be using your IP address to write something. That is possible. IP address isn’t the best judgment. People can be at a cafe and use IP address, you know. I don’t think the location of a person writing the review is relevant. I had one guy, for instance, that is in my five-star-deleted – i’ve had like 34 deleted five-star reviews now – I mean not recommended – and another fourteen that have been deleted. And meanwhile I only have seven five-star reviews up. So that’s a big ratio. We’re talking a fifty to seven ratio here. I had one guy that had to go to the library and open an account in order to be able to write a review for me because he didn’t have a computer service, and he wanted to be able to review me because I did good work with him, and he was very pleased, and Yelp removed his review because it seemed suspicious or whatever, but he’s a real person.”

The conversation went in a slightly different direction, and the business owner’s points about IP address weren’t really addressed.

Update: Regarding IP address as a signal, a Yelp spokesperson offered us the following statement:

“There are many data points that we take into account when posting Consumer Alerts, but in order to prevent businesses from gaming the system we can only share some of the measures we take. Reviews coming from the same IP address can be an indicator that someone is trying to artificially inflate a business’ rating. Two scenarios we often see in this case are either 1) The business owner was writing positive reviews of his/her own business or 2) The business owner was asking customers to write Yelp reviews for his business on a computer/laptop located within the business (which can lead to bias, since they’re unlikely to ask any dissatisfied customers for a review).”

Yelp’s Consumer Alert warnings appear on business’ listings for ninety days.

“Although most of the millions of businesses listed on Yelp do play by the rules, and Yelp’s automated recommendation software is already in place to identify and weed out fake reviews, consumers have a right to know about the bad apples before deciding to spend money at their businesses,” writes Yelp’s Kayleigh Winslow on the company’s blog. “For example, prospective customers of Back 2 Normal Physiotherapy in Vancouver, BC would probably want to know that a number of their five-star reviews can be tied to a marketing agency before deciding to visit them for acupuncture or injury treatment. Likewise, you’d probably appreciate the heads up that tattoo removal shop Dr. Tattoff was caught offering Starbucks and Amazon.com gift cards in exchange for Yelp reviews before turning to them for help painfully removing that mistake you made during college spring break. Or if you’re preparing for a big apartment move and want to hire someone you can trust, it’d be helpful to know that we discovered Roadway Moving in Manhattan, NY was offering $100 American Express gift cards in exchange for 5-star reviews.”

Yelp shares an email from Roadway that someone apparently forwarded them.

Yelp considers simply asking for reviews to be spam, so bribing people for five-star reviews is definitely going to get you in trouble with the site.

“Beyond giving consumers a false perception of the business where they are about to spend their money and violating Yelp’s Terms of Service, writing a testimonial without revealing you’ve been compensated can also violate FTC guidelines,” says Winslow. “Consumers have the right to be alerted when a business is attempting to deceive them. Rest assured that when it comes to protecting consumers, we’ll always have your back.”

It’s worth noting that Yelp’s data doesn’t just appear on Yelp. There are over 100,000 developers using the company’s API to integrate its data into their products. Regardless of whether or not consumers are seeking out information on Yelp itself, there’s a good chance they’ll come across Yelp content in other apps and on other websites.

A study released by BrightLocal last summer found that people are trusting online reviews more than ever.

While Yelp loves calling out shady business practices, the company is frequently accused of having some of its own. As Yelp announced earlier this month, the Federal Trade Commission closed its investigation into the company without taking any action.

Images via Yelp, BrightLocal