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BBB Grade, Rating and Complaint Pitfalls

What Lurks Below the Surface at the Better Business Bureau

© Karla Reed

Feb 20, 2009
BBB Grade,Rating And Complaint Pitfalls, imelenchon
Concerns rise regarding the new grading system at the Better Business Bureau and highlight the need for non profit transparency.

With over 80 years of public trust and an untarnished image as a consumer protection tool, the non profit BBB (Better Business Bureau) has silently transformed itself into a "pay to play" business promoter.

Both the individual consumer as well as the business owner should examine the new ratings with a fine tooth comb (of both self and competing businesses) and press the BBB to increase grading transparency and accountability.

BBB New Rating Scale

At the beginning of 2009, the Better Business Bureau announced that it would utilize a new rating scale (grading businesses with an A to F), incorporating 16 elements as follows:

  1. Type of Business
  2. Time in Business
  3. Competency Licensing
  4. Complaint Volume
  5. Unanswered Complaints
  6. Unresolved Complaints
  7. Serious Complaints
  8. Complaint Analysis
  9. Complaint Resolution Delayed
  10. Government Action
  11. Advertising Review
  12. Background Information
  13. Clear understanding of business
  14. Mediation/arbitration
  15. Accredited Business status
  16. Revocation

What may seem like a straighforward "grade school" scale rapidly becomes complex and varies greatly at the hands of local, not national, Better Business Bureau chapters.

To complicate the interpretation further there is no published, itemized grading of how businesses are individually accessed.

Media reports have swirled with accusations that the Better Business Bureau favors fee-paying businesses. These reports are seemingly with merit as "accredited business status" is blatantly factored into the 16-point grading scale.

BBB Complaint Resolution Status

Adding to the complexity, local BBBs handle complaints (often at a clerical level) and are fully empowered to deem the resolution status. Resolution status definitions often vary amongst the local bureaus and remain on the business record for three years.

According to Alison Southwick, Media Relations Manager for the Council of Better Business Bureaus, complaint resolutions should be defined as follows:

  • Resolved - means that the business took appropriate steps to resolve the issue and the consumer was satisfied.
  • Unresolved - means that the business did not take appropriate steps to resolve the issue and the consumer remains dissatisfied.
  • Administratively Closed - means that the company took reasonable steps (in the opinion of the BBB only, not the consumer) to resolve the issue, but the consumer remains dissatisfied.

BBB Definition of Settled Complaints

The BBB touts its success and reports a 73.3% complaint settlement, however, after dusting off the statistical fluff, the settled complaints are boosted by the BBB's own partiality, assessment and outcome decision, not the consumers.

When asked about the number of "settled" reports listed on the BBB's own national site, Ms. Southwick reported the following:

  • In 2008, 73.3% of complaints received were closed as “settled”. Of the complaints closed as settled, 21.7% were administratively closed which means that the BBB felt that the company took reasonable steps to resolve the issue (an assessment entirely in the hands of the BBB, not the consumer) OR the company was willing to enter into mediation or arbitration but the consumer declined (only available to fee paying businesses).
  • Also in 2008, 23.4% of complaints were closed as “unsettled” which means the company did not respond to the complaint OR did respond to the complaint but not to the satisfaction of the consumer nor the BBB (again assessment of "satisfaction" is entirely in the hands of clerks at the BBB). The remaining 3.3% of complaints were closed as unpursable, which means BBB could not contact the company, often because it is fraudulent or went out of business.

Questions Regarding Practices at the Better Business Bureau

When presented with the following questions, Ms. Southwick declined to comment and insisted that a BBB spokesperson address these. She stated that she would try to have a spokesperson address my inquiries in writing (there was no response, to date, from this spokesperson):

  1. Can you supply a 2007-2008 Annual Report? If not, when will it be available? (The last annual report listed online is for the year 2005).
  2. Do you offer arbitration and/or mediation to all consumers registering a complaint or only to those whose complaints are with an accredited BBB business? (it has been reported that only businesses paying for accredidation will be offered arbitration/mediation through the BBB (another point on the rating scale)).
  3. When did the BBB start the accreditation program for businesses, what fees have been required for this? (These fees have been reported to range from hundreds into the thousands dependant on business size).
  4. If a consumer sees a complaint listed against a company they would like to do business with, can the consumer see the details of the complaint? (To date, only the deemed resolution is available to the consumer).
  5. Has the BBB amended any of the new rating scale criteria since its recent inception? Have you recognized any issues that are in possible need of change and/or amendment in your new rating scale?

In order for the Better Business Bureau to regain both consumer and business trust, the BBB needs to unveil its per business, itemized grading; grading that impacts not only the bottom line of businesses but also the ever fleeting consumer dollar.

Source:

Better Business Bureau - See National site - Overview Of Rating Systems Elements

LA Times

Hartford Courant - January 31, 2009 - Consumer Watchdog column, George Gombossy

Updated/Additional Info:

Conn. Attorney General Questions The BBB Directly - March 2009

BBBRoundup.com - Site that highlights current issues (problems and inconsistencies) with the BBB

Hartford Courant Reporter Piece Containing Leaked BBB Memo - April 2009


The copyright of the article BBB Grade, Rating and Complaint Pitfalls in Non-Profit Management is owned by Karla Reed. Permission to republish BBB Grade, Rating and Complaint Pitfalls in print or online must be granted by the author in writing.


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Comments
Feb 27, 2009 7:22 AM
Guest :
I've always considered it as a local intimidation tool. Pay or we won't have anything good to say about you.
Mar 2, 2009 3:08 PM
Guest :
Very Bad. The BBB is an organized Criminal Enterprise. If your not a member they will use extortion methods against you with their rating system. Shame on the BBB. Glad to see someone is speaking out against them.
Mar 3, 2009 5:11 AM
Guest :
Thank you that was an Outstanding article. Later today I will link yours. Below I have released an audio of a phone conversation that I had with the BBB.

http://hi-caliber.blogspot.com/2009/02/bbb.html

Private Investigator
www.hi-caliber.org
May 26, 2009 12:42 PM
Guest :
By conviction and choice, I am not a member of the BBB, yet this organization has, in the course of three months since January twice elected to malign me personally and professionally without cause, or plausible explanation. I thank you for your research here, a valuable resource in bringing these libelous and coercive trade practices to an end, and justifiably, loss of non-profit status of the BBB.
Aug 7, 2009 7:35 AM
Guest :
I am rated C by the BBB. I questioned them and was told I needed to verify my information. I did. I was asked only: how many employees, customers, locations, and revenue we have. I recently recv' a complaint meant for another company. I guess part of their 'excellent' service ( I bet they rate themselves as a AAA+) they did not verify that they had the correct business. Instead of promoting good business practices, this system allows bandit businesses to buy a good rating, and penalize businesses like me that work years to earn it. I refuse to join their good-ole-club. I hope to convince the businesses in our industry to drop all BBB memberships and post on their websites the reason why. It is my opinion that the BBB is using this to confuse the public and intimidate business into paying dues for membership to improve their rating on the BBB website. Consumers should unite and do away with the BBB. I also believe I have lost new customers because of it. I plan to file a complaint about unfair reporting practices w/ the BBB on the BBB and a complaint to my states representatives about this rating system. It seems the BBB has gone into survival mode. With the Internet and a more educated consumer, the BBB is no longer needed and they know it. We are better off without them.
5 Comments
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