Thanks to the internet and the rise of business reviews sites, dealing with customers has arguably never been more complicated.

Never before has it been more important to cultivate strong customer relationships and to find ways to parlay them into online reviews that, in some cases, can be powerful drivers of business.

Many businesses have become quite adept at doing this using a variety of legitimate and not-so-legitimate tactics. But when it comes to unhappy customers, there are often few easy answers once that unhappiness has been manifested as a scathing review on a site like Yelp. Such reviews can scar a company, leading potential customers to continue their search for a service provider.

So when a woman named Jane Perez left negative reviews on Yelp and Angie's List for Dietz Development -- reviews that accused the contractor of stealing valuables from her home -- Christopher Dietz was faced with a conundrum: let the reviews and allegation slide, and hope for the best, or defend his business.

Dietz chose to defend himself and took Perez to court, slapping her with a $750,000 defamation lawsuit. Last week, a judge issued a preliminary injunction against Perez. Despite her suspicions, there was no evidence that Dietz and/or his employees stole from her house, and Dietz had never been charged with theft, so the judge ordered her to alter her review.


According to Dietz, the negative review by Perez has cost him at least $300,000 in business. From this perspective, it's not hard to understand why he decided to sue his former customer. But that isn't the end of the story. As noted by The Verge's Chris Welch, non-customers have apparently been targeting the Yelp page of Dietz Development, slamming it for its lawsuit.

One such review, written by someone named Heather A., states in part:

I cannot speak to the veracity of the Perez review. Whether or not her allegations were true, I believe that addressing a bad review in the courts is an example of terrible customer service. If the company performs well, their satisfied customers and good Yelp reviews will soon outweigh one negative review.

Theory versus reality

In theory, Heather A's argument is a reasonable one. While a single negative review can be harmful, if there are far more positive than negative reviews, the ill effects of the negative review can probably be mitigated.

In reality, however, it's not always that simple. A restaurant owner looking at a negative review over bad experience with a waiter probably isn't going to lose any sleep. Some types of businesses, like restaurants, often receive lots of reviews on a regular basis, and consumers of those reviews know that sometimes the rude waiter is really a product of a rude customer. So one bad review isn't necessarily a back-breaker.

But what about businesses like those run by Christopher Dietz? They don't have nearly as many customers, and thus generate fewer reviews. The stakes are higher (he is working on somebody's home after all) and an accusation like the one leveled by Jane Perez (that he or his employees stole from her home) is a serious one that isn't likely to be so easily dismissed by prospective customers, even in the presence of a greater number of positive reviews. That makes it much more difficult to let an untruth slide.

The verdict

So is it ever a good idea to sue over an online review? In most cases, no. But online reviews are a two-way street. When a business wrongs a customer, it can expect to face the consequences in the court of online public opinion. But when a customer wrongs a business, it too shouldn't expect the act to be without consequence.

When that act appears to be defamation -- one that has legitimately cost substantial earnings - the unfortunate news for business owners is that the option of doing nothing may be just as harmful as doing the unthinkable.

Patricio Robles

Published 10 December, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (7)

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John Friend

Interesting article. I think customers under-estimate the power of a negative review when for many products reviews are quite rare. As a developer, I've experienced other developers exploit this, by writing negative reviews against their competitors.

Not that I have any intention of suing, but the article made me wonder, are there are any precedents of people like this being sued?

over 5 years ago

Emma North

Emma North, Digital Marketing Executive at Koozai

This is an interesting article and explores an issue that is likely to become an increasing problem for online businesses as more and more people turn to social media or review sites to both research a business and report on one.

I believe it more important for business to identify and embrace brand ambassadors than to combat negative reviews with lawsuits or tit-for-tat comments. Engaging with positive reviews helps to encourage repeat business and maximise customer retention. Most importantly, it is a powerful tool in itself for countering negativity.

Many businesses ignore positive comments and just look for the complaints when looking over their reviews. While this may be an effective short-term strategy, harnessing the power of brand ambassadors has to be the more sustainable social practice in the long-term.

over 5 years ago


George, Project Manager at Penna

There's a huge difference between a bad review and an accusation of criminal behaviour. I think he did the right thing.

over 5 years ago


Richard Hamer

I manage TripAdvisor reviews for several restaurant clients and regularly have to ask for comments to be removed by people that have either not even been in the place (which suggests a rival business - this is quite obvious when it's a first time reviewer), and people just letting rip and being abusive, even threatening. I've even had to handle accusations of assault and mass food poisoning; only one one table though.

over 5 years ago


Ashwin Naiksatam

Tit for Tat is not the correct mantra in servicing your customers. Businesses should always empathise with their customers and not sympathise. I believe as businesses grow they forget the basics " in business U comes first before I".

over 5 years ago


Ketharaman Swaminathan

I've heard of horror stories on freelance websites where the customer gets the job done, delays payments or underpays for reasons unrelated to the quality of deliverable, then threatens to leave behind negative feedback on the portal if the supplier refuses to "play ball" i.e. accept the delayed or reduced amount of payment. In extreme situations like the one faced by Dietz, I think what it did was right.

over 5 years ago


Lance Wilson

I own a small online review business and this issue is FAR more common than one might expect. Take a look at Dietz's site: the review is still there as of Jan 27, 2012. Bottom line...none of us are going to use this guys business. The best business practice is to do whatever it takes to first resolve the original issue that led to the review. We tell our client's that it doesn't matter if you are right or wrong. All that matters is what folks tell their neighbors (or the world). Check the ego at the door. Suck it up. Love on the person who left the negative review and do everything in your power to over-serve them and earn a change in the review. Only in dire circumstances should a business sue and then they need to be prepared for the backlash. Simply weigh your options and only sue after all other options have been exhausted. Then hire a professional so they follow up with the injunction and actually get the review removed.

about 5 years ago

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