Unethical data aggregation practices of many recommendation systems have raised privacy concerns among users. Local differential privacy (LDP) based recommendation systems address this problem by perturbing a user’s original data locally in their device before sending it to the data aggregator (DA). The DA performs recommendations over perturbed data which causes substantial prediction error. To tackle privacy and utility issues with untrustworthy DA in recommendation systems, we propose a novel LDP matrix factorization (MF) with mixture of Gaussian (MoG). We use a Bounded Laplace mechanism (BLP) to perturb user’s original ratings locally. BLP restricts the perturbed ratings to a predefined output domain, thus reducing the level of noise aggregated at DA. The MoG method estimates the noise added to the original ratings, which further improves the prediction accuracy without violating the principles of differential privacy (DP). With Movielens and Jester datasets, we demonstrate that our method offers a higher prediction accuracy under strong privacy protection compared to existing LDP recommendation methods.