Better Business Bureau Credibility Fading Fast

July 31, 2010
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As a former small business owner and a consumer, John Henley of Colchester believes that the Better Business Bureau should be our first line of defense against unscrupulous and negligent businesses.

But based on his experience and what he has read of about bureau’s controversial letter-grade rating system, Henley is convinced that “the BBB is utterly useless.”

I understand how Henley feels. The Better Business Bureau – though it was always far from perfect, and its effectiveness depended on the area of the country – was a very useful tool.

It still is useful but you can no longer give it the credibility it once had, especially when it comes to “Accredited” businesses that pay annual fees to get better grades than the non-accredited, non-paying ones.

When the BBB changed its satisfactory/unsatisfactory rating system throughout the country in January 2009, it claimed it was doing so to give more precise grades, ranging from F to A+, to better serve consumers.

But after consumer advocates, including this one, figured out that only those companies that paid the fee got A+ grades, we started looking deeper into the grading system. We came up with serious questions about the validity of many of the grades, with great companies that refuse to pay getting unusually low grades and weak companies that were accredited getting higher grades.

A group of businessmen in California (whose identities have been kept confidential) decided to prove that the grading system was nothing more than a pay-to-play scheme.

In the past few months, they signed up an unspecified number of fake companies in California and in at least one other state, used credit cards to give the appearance of business activity, gave false addresses, and were awarded A- ratings.

Jimmy Rivers, the pen name of a former California journalist now in the business world, has been exposing many of the BBB abuses on his blog www.BBBRoundup.com. He disclosed (and I was able to verify before the entries were taken down) the identities of two of the fake businesses. For Jimmy’s latest disclosures click here.

The shocker was a business called Hamas – I think all of my readers know that name. But the Southland Chapter of the BBB (the largest in the country) made them an accredited business and gave it an A- rating, the third highest. Starbucks, for instance, has an F rating, but then it would cost Starbucks millions dollars a year to have all its coffee shops accredited.

Southland admitted that it got suckered, but said it does not diminish the validity of the BBB rating system.

Rivers (whose real identity I do know) tells me that many other fake businesses have been accredited and will be revealed in the next few weeks.

Henley is not surprised. The Colchester man wrote to me about a complaint he filed two years ago with the BBB that covers Boston and eastern Massachusetts. His complaint was against a pest control company that Henley claimed did a lousy job of keeping pests under control as the firm had been hired to regularly protect the home. After his mother passed away, Henley had to sell her house. But the buyer discovered tons of mouse droppings, requiring him to reduce his price by $3,000 so she could have the pests eliminated.

Henley provided me with the documentation as well as the response he received from the BBB regarding the complaint against an accredited pest control business with the highest A+ rating.

They told him they could not help him because he either did not provide specific enough documentation or because they could not find the business. He wrote a letter to the president of the BBB complaining about the way his complaint was treated but did not receive a response.

I talked with BBB vice president Paula Fleming, who insisted that her agency never received Henley’s letter and the real problem was that Henley did not give enough specific information about his complaint to take action.

Well, I told her that if she actually read the documents I sent her, she would see that Henley did provide specifics about his complaint, and Henley said the BBB never contacted him for additional information.

Connecticut Attorney General Richard Blumenthal’s office says it is still investigating the Connecticut BBB chapter, which convinced him to attend a ceremony where a company that was ripping off customers was honored with the chapter’s highest award – the Torch Award.

“Our review into certain ratings and award policies … remains ongoing,” Blumenthal said in a written statement.

“The Connecticut BBB committed to an internal review of its standards, which it expected to conduct this summer, specifically concerning the terms of its Torch Award policies and rating criteria. My office will review the outcome and results of that review to determine whether any further action is necessary,” the statement said.

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12 Responses to Better Business Bureau Credibility Fading Fast

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  4. Scott Coleman on August 2, 2010 at 5:53 am

    George,

    I tried to tell you years ago, while you were still touting the BBB, about the way they operate. They pressure businesses to pay for a membership, then those businesses have to kiss the butt of the BBB in order maintain a clean rating, defending themselves against any wack-job consumer who feels like voicing a complaint., irregardless of its validity. The CT Dept of Consumer Protection is your best source of information. Stay clear f the BBB. They’ve got their hands in your pockets, and have no one’ else’s interest except their own.

    • George Gombossy on August 2, 2010 at 7:51 am

      Well Scott, you were right.

  5. Shirley Bloethe on August 2, 2010 at 5:00 pm

    When I was contacted to become a member and heard what the fees were and how they operated ( fee for great ratings disguised as quality control) I chose not to “buy in” for my business. I do not put ANY faith in how good a company is with regards to their
    BBB status. I am about to sue one of their A+ rated members this week due to a $3,800.00 overcharge on my oil bills.

  6. Chris Jillian on August 7, 2010 at 1:51 pm

    Guys, do you really think that consumers are that stupid. You speak like your opinion is gospel… I did a little research here in New Jersey and about 15% of the member businesses are A+. And yes, I was upset when I saw that one of our competitors had an A+ and a lot more than our number of complaints (we’ve had 3 in the last 36 months and we’ve shipped and/or installed 100,000+ windows in that time). But I think we have to give our consumers more credit than your giving them… If you have a company that has 150 employees, 50 million in sales and just a handful of complaints, vs a company that has 10 million in sales and has as good a rating and both have satisfied all their complaints, which company would you choose even if both have an A+, which by the way, is based on the seriousness/type of complaint (eg. advertising fraud is more serious than failing to repair broken pivot bars in a timely manner) as well as the number and how responsive the company is in resolving complaints and also their compliance to BBB code). The point is … where else can you go to find this company info and a recorded complaint history and outcome information in one concise report? In resolving cases with the BBB, I have NEVER felt that they have taken sides… if anything I have been frustrated by their NOT always listening to what I have thought to be reasonable. You guys are right in that smart and good company’s like yours and mine do everything possible upfront to avoid complaints in the first place and the results show… period. We should be proud and happy (and flaunt it in our marketing), not complacent, frustrated or angry when we look at our BBB numbers against our competitors. To call the BBB names and belittle its value to the overall “vetting” process is, yes in my opinion, almost misleading the consumer.

  7. Gayl on August 9, 2010 at 10:13 am

    I recently filed a complaint regarding a BBB company with the highest rating and one other complaint. I received a reply the very next week that my case was closed and my complaint would be put on file — without resolution!

  8. George Gombossy on August 11, 2010 at 6:15 pm

    from a reader
    In June, 2009 the Better Business Bureau of Central SC and Charleston increased its rating of Ryland Homes on Daniel Island/Charleston, SC from a “C+”, I think, to an “A+” right around the time that Ryland’s Charleston Divisional management paid a fee to become a “BBB Accredited business “!  I was told by that SC BBB that it was due to that divisional portion of “Ryland Homes”  now being recorded as having 50 employees, a larger #, as told to them by Ryland.  That BBB never would confirm that they verified the 50 employees!  This meant that there were now fewer consumer complaints per number of employees.  The reasoning for the increase to “A+” is that the bigger the company, the more complaints it’s understandably going to get, but shouldn’t be penalized for.  I don’t think that Ryland’s Charleston Division had 50 employees in 6/09, if you don’t count independent contractors, but I could be wrong.  Also, I just read the 7/31/10 “Better Business Bureau Credibility Fading Fast ” which to me explains the current “A+” rating.”
     

    Thanks,
    Bill Kelm (“Brokerblogger”)

  9. Ralph Brubaker on July 12, 2011 at 6:16 pm

    Creating a fake business doesn’t prove much. Once someone got suckered by that business…and how the rating changed…THAT is the thing.

  10. Dominic Saccone on January 10, 2012 at 2:22 pm

    There is little doubt that your A+ rating is based strictly on you paying the BBB fee. They have no credability. As soon as they realize that you are not going to pay they start calling you informing you that they have had inquiries about your business. After the fee is paid for all purposes they go away until your yearly fee is due. What a joke, they should be throughly investigated.

  11. John Starnes on May 15, 2012 at 10:59 am

    I was badly damaged by a BBB rated company in Greer SC 32 years ago. Thay always maintained a good rating with the BBB. The biggest scam in town.





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