Better Business Bureau Leadership To Meet In Aftermath Of Devastating ABC Expose

November 13, 2010
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The Better Business Bureau council – the leadership group for the 120 bureaus in the U.S. and Canada – are expected to meet Tuesday to decide how to respond to the devastating ABC 20/20 investigation into its grading system as well as Connecticut Attorney General’s thinly veiled threat to take legal action if the BBB doesn’t immediately change its marketing program.

Both Friday night’s ABC program and Atty. Gen. Richard Blumenthal’s attack focused on the two-year-old BBB marketing tool to assign letter grades ranging from the low of F to the top A+ rating to hundreds of thousands of businesses. It replaces what the BBB used for 95 years, the simple satisfactory/unsatisfactory ratings.

The BBB claimed when it rolled out the program that it was intended to provide a quick and easy way for consumers to check out a business on the BBB web sites by simply looking at a grade.

"Jimmie Rivers" shows ABC the Hamas listing on BBB

However, I and several other consumer advocates began questioning the motivation behind the grades when we discovered that accredited businesses – those who paid anywhere from $330 annually to millions of dollars depending on their size – would automatically receive additional points toward their grade.

We also questioned how the the 120 bureaus – each with only a few employees – could be capable of deciding what grades to give the millions of businesses listed.

Some bureaus also had questions about the plan – developed and tested in the southern California chapter – and refused to follow it. The five chapters finally got with the program after the council threatened to expel them.

One of the main critics of the BBB grade system is a businessman/journalist who uses the pen-name of Jimmie Rivers and launched a website BBBRoundup to expose the bureau’s marketing scheme.

His largest expose came last winter when an anonymous group of his friends tested the BBB’s claim that its grades were solely based on how well a business serves customers and not on whether they are dues paying members.

The Southland (southern California) BBB chapter fell into their trap. Within 24 hours after the group paid $425 on a credit card the BBB listed “Hamas” on its website as a legitimate business and gave it an A- rating. The group added icing to its cake by stating that “Hamas'” president was Bill Mitchell – the name of the Southland BBB director who is paid $400,000 a year.

Two other fake sites were similarly created, one for a non-existing Sushi bar with a fake address, and a “StormFront” a skinhead website. Both were immediately given A ratings as soon as the credit cards cleared. StormFront actually received an A+ rating.

BBB officials said those were simple errors.

The ABC Friday night show – for which I provided information for – used those examples plus they had even more damaging evidence – again focused on the California BBB chapter.

The program filmed two business owners who were not BBB accredited businesses and who had been given C grades on the BBB website.

The two called the BBB and asked how they could improve their grades. They were told that by paying to become accredited members their ratings would improve.

And they did. Both businesses’ ratings quickly went up to A+ after paying their dues.

BBB Council President Steve Cox called these as a mistake on the program. However, Cox ended the interview early with ABC and refused to answer further questions.

To be fair, most of the outrageous examples come from the Southland BBB chapter – which is also the largest. Other chapters are operated more professionally based on my experience.

However, the letter grade system permits the chapters to use it as a marketing tool to pressure businesses to “pay to play.”

As part of that, BBBRoundup’s Jimmie Rivers revealed Friday night that the BBB is beginning to outsource its sales marketing efforts and is offering pay of up to $150,000 a year to telemarketers.

Hamas A- rating

It will be interesting to see what the BBB council has to say next week in response to what has been unprecedented attacks against its credibility – the only thing of value it has to sell.

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6 Responses to Better Business Bureau Leadership To Meet In Aftermath Of Devastating ABC Expose

  1. […] Go here to see the original:  Better Business Bureau Leadership To Meet In Aftermath Of … […]

  2. […] This post was mentioned on Twitter by George Gombossy, Jeff, Rebecca Powers, Glenna McMahon, Chris and others. Chris said: RT @ABC_Daily: Better Business Bureau Leadership To Meet In Aftermath Of Devastating ABC Expose – Connecticut Watchdog http://bit.ly/9YSH7G […]

  3. Dave Lieber on November 14, 2010 at 2:03 pm

    Fascinating story, George. Happy to read in this that you contributed to the ABC report.

  4. Douglas R. Meeker on November 15, 2010 at 4:31 pm

    I have been following closely these complaints with much interest. For three years now I have filed many written complaints against primarily Chris Coleman, the so called President/CEO of the Better Business Bureau in Des Moines Iowa for a period of nearly three years regarding a variety of issues, but numerous ones that relate to much of what your story covers.

    After three years of being unable to get my complaint heard and better yet action taken, on October 4, 2010 I sent a very detailed letter containing over 50 attached documents of support to Mr. Stephen Cox, President of the Council of the Better Business Bureau’s in Arlington Virginia.

    Twenty two days later, I received a canned reply advising the information was received and sent on to the Chris Coleman in Des Moines Iowa for handling and advise I could expect a response within another 30 days. Basically I will wait fifty two days for the first response from the man that failed to respond effectively for three years.

    Immediately I sent another message reminding that they (BBB) require businesses to respond within ten days receipt of a consumer complaint.

    I now have been waiting for a total of forth three days without a response.

    All the while, I have had a grossly incorrect grade (F) on the BBB website and every day my business is being damaged because of Mr. Coleman’s documented vendetta against my company.

    Just for the record, Mr. Coleman was accused of sexually assaulting a former employee, questioned about his self beneficial unethical behavior by the City of Des Moines, for which he serves as a councilman.

    I truly believe there needs to be a governing body closely watching this organization. I cannot be the Federal Trade Commission or the State’s Attorney General because I also filed my complaint with them and hever heard from the FTC, and the AG’s office told me to get a lawyer. This is America and no one should have the authority to single handedly make decisions to deliberately damage another’s business first with out an investigation and without the proof. That person or persons should also have a credible background.

  5. […] (BBB) helped you work towards that goal by rating reputable small businesses. However, a recent controversy related to the BBB’s current rating system exposed the need for improved trust-building […]

  6. MAPping Company Success on November 18, 2010 at 4:18 am

    […] that is what the BBB has done; apparently for money. Both Friday night’s ABC program and Atty. Gen. Richard Blumenthal’s attack focused on the […]





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