NYTimes Latest To Probe Better Business Bureau’s Shady Behavior & Incompetence

The prestigious New York Times has finally discovered that the Better Business Bureau may be more interested in making more money for its executives from business fees than protecting consumers.

The influential publication has carried three The Haggler columns focusing on the BBB’s behavior and incompetence. That is a far cry from the past when it failed to even report that the New York City BBB chapter tried unsuccessfully to distance itself from the BBB’s two-year-old grading system, which many consumer advocates believe is nothing more than a pay to play scheme.

To help bring you up to speed, the last I wrote about this topic the $400,000 a year president of the Southland (southern California) BBB chapter resigned under pressure following a November ABC 20/20 documentary that exposed how that chapter was selling A grades to businesses that were previously rated C when they paid $400 annual membership.

William Mitchell, the Southland president and highest paid BBB employee, was the man responsible for developing and testing the letter grade system and who convinced the national BBB council to implement it in all its chapters in the U.S. and Canada. It replaced the decades old satisfactory/non-satisfactory ratings.

Following the ABC story and pressure from then Ct Attorney General Richard Blumenthal, the national council agreed to study its system and to investigate the Southland BBB chapter.

But a few weeks after Mitchell resigned for supposed “health reasons,” he rescinded his resignation. He had remained on the job while a search was being conducted for his successor.

Mitchell told his staff that he was asked by the local board to rescind his resignation claiming that the national council was attempting to pack its board of directors with their own people, according to a Los Angeles Times article by Sharon Bernstein.

“When I tendered my resignation last month, mainly due to my health, I hoped it would clear the path to better relations between the Council of Better Business Bureaus and the Los Angeles BBB,” Mitchell wrote in his e-mail, a copy of which was obtained by The Times. “However, the Council used my resignation as an opportunity to try to put their own people in place of our Board of Directors and to insert their designee as CEO. If this were to happen, Council would effectively control the LABBB and our considerable assets.”

“Rest assured that we will pull out all stops to defend ourselves against Council’s unlawful overtures,” he said in the memo. Executives at the National Council of Better Business Bureaus did not respond to requests for comment.

The fact that Mitchell rescinded his resignation was ignored by most of the media and even many consumer advocates dropped the BBB issue to focus on other consumer problems, apparently believing that the BBB was heading on the right path.

Thankfully it was then the New York Times finally began its own probe.

While most other mainstream newspapers have ignored Internet journalists’ criticism of the BBB, David Segal, who writes The Haggler column for the Times, has written three outstanding columns looking at BBB’s shady and incompetent behaviours.

On Feb. 26, the Haggler column published its first BBB article zeroing in on PC Drivers, an Austin, Tex., company that had an A+ rating despite hundreds of complaints to the BBB about failing to receive promised refunds.

PC Drivers is of course an accredited business and pays annual fees to the Texas BBB chapter. Since that column was published the A+ rating was removed and the company now has not rating and there is a note from the BBB that the rating is under review.

The second column on March 12 drilled deeper into both the BBB system and on PC Drivers, disclosing that the BBB offered mediation for all the complaints against accredited businesses, but charged $70 for the mediation, $30 more than the product. This had – to my knowledge – never before been reported.

The latest Segal “The Haggler” column was published March 26 and pointed out how a shady company can stay in business and get good BBB grades by simply changing its name.

BBB national council officials did not respond to my request for a comment.

I hope that Segal continues his outstanding work on the BBB.

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