One guesthouse owner says she has been branded a racist after turning a potential guest away and is so upset she has gone to the police. Another says he is giving up the B&B business he has run for 30 years following an online review claiming his rooms were dirtier than a sewage works. A third claims he is in despair because he seems to be spending more time dealing with unfair reports than actually running his successful seaside hotel.

They are just some of the 700 or so members of the hospitality business who have either committed to, or are contemplating, legal action against TripAdvisor, the world's largest travel review site, over what they regard as unfair reports.

A company specialising in protecting online reputations is collecting examples of comments that it believes overstep the mark. The firm, KwikChex, intends to collate the most "serious" examples, then ask TripAdvisor to take action. On one day this week KwikChex was dealing with an inquiry every five minutes.

Among the cases KwikChex is examining was a review on Brook Barn Country House, in Oxfordshire, a five-star B&B billing itself as a "jewel of a hideaway". Most reviewers on TripAdvisor agreed. "What a fantastic place!" says one enthusiast on the site. "A wonderful country retreat" adds a second.

But if readers scrolled down further this week they came across a review from "Ferdi", an IT salesman of Indian origin from the home counties who asked to be shown around Brook Barn. The hotel's owner, Sarah-Jane Ashman, recalls explaining that she could not as the rooms were full but was horrified a few days later when Ferdi's review appeared and seemed to accuse her of racism.

"I hate to ever think it but are there people out there who still have a problem with the colour of someone's skin?" Ferdi wrote. "I think I'll be staying away and would recommend to any other 'ethnics' to do the same. I don't think they like our sort around there."

Ashman says she was so distraught she called the police, arguing that the review could actually break the law by inciting racism. "Everybody gets bad reviews, that's fine," she said. "But to be called racist is completely wrong."

Des Hague's B&B is at the other end of the scale. He charges £25 a night for a single room at Thornsett House, a Victorian villa five minutes from Sheffield city centre. "It's not the Hilton," he said, "But it's tidy and clean."

He claims his business has been undermined by "spiteful" reviews on TripAdvisor. Under the headline "B&B Hell" one reviewer claimed: "I have visited morgues, abandoned buildings, a sewage works and a coal pit. Each and every one was cleaner, tidier and better staffed than Thornsett House."

Other travellers disagree. "Friendly, warm, welcome" says one. But Hague says poor, unwarranted reviews are ruining his business. "Usually the phone is ringing off the hook at this time of year. Now there's nothing."

He says he has been in the business for 30 years but now plans to shut down the B&B. "I can't work out what is happening here. I've had enough," he said.

The Guardian spoke this week to a hotelier in the south-west of England who said he believed his business had been targeted on TripAdvisor by a sacked member of staff. The unfavourable review claimed the person had been bitten by fleas and seen rats.

Another person in the north-west of England said his B&B had been ruined by "malicious" reviews which, he believed, were placed by rivals.

Louis Naudi, who runs the Royal Sportsman hotel, in Porthmadog, north-west Wales, has spent most of the week fighting back against reviews he says are malicious. One painted an unflattering picture of the "unhelpful sour-faced owner" and a room that "stank of mould". The food was "awful and expensive". According to the posting the visitor had stayed in May 2008 but waited until April this year to post the review.

"Who does that?" asked Naudi. He said he believed it was a false review and has complained to TripAdvisor about it. "How do I know any of these customers actually stayed here? They are anonymous and can get away with blue murder. Those who write fraudulent, malicious, embellished reviews are cowards."

KwikChex, which works from an office in Bournemouth, Dorset, and is charging "victims" £35 to join the class action, says it is looking at examples of hoteliers accused of being thieves, or assaulting or poisoning guests. Central to any case will be whether TripAdvisor, based in Newton, Massachusetts, and a part of the online travel firm Expedia, can be held liable as its business is based on publishing user-generated content – the opinions of others. The Communications Decency Act of 1996 in the US has been taken to mean that operators of websites are not legally liable for third parties' words.

Chris Emmins, co-founder of KwikChex, said his firm would be presenting TripAdvisor with "the most severe cases" and giving it 14 days to take action. Otherwise lawyers would start legal proceedings against it and request information on people posting "defamatory" reviews.

Emmins said the protection offered to both hosts of reviews and to anonymous posters of material was "crumbling" with some courts in the US insisting that "due care" needed to be taken by each.

TripAdvisor refuses to comment about any of the cases which are the subject of "threatened or pending litigation". But a spokeswoman said: "We believe our more than 35m reviews and opinions are authentic and honest from real travellers, which is why we enjoy tremendous user loyalty and growth. If the reviews people read didn't paint an accurate picture users would not keep coming back." All reviews were screened by online tools and "quality assurance specialists" investigated "suspicious" ones . Hoteliers had the chance to post a response to reviews. TripAdvisor said it advised travellers to disregard the "anomalies that appear overly critical or overly complimentary".

The Guardian tracked down Ferdi, who commented on Brook Barn. He insisted his remarks had been honest, not malicious, and he did not accept he had accused the B&B of racism. "I was simply writing about my experience. I'm not out to wreck anyone's business. But when I left I felt crap. I thought about it for a few days and thought it was important to make them know I felt like that. It's all about opinion."