BBB Under Scrutiny

Link: http://www.bbbroundup.com/LosAngelesBBB08.html

BBB expects media to turn blind eye to landmark case

On May 1st, 2009, the Los Angeles Superior Court will hear arguments on important motions in a case against the Better Business Bureau of the Southland, Inc. concerning the Strategic Lawsuit Again Public Participation (anti -SLAPP Motion - Statute CC 425:16). If the judge finds against the plaintiff in the second phase of the SLAPP motion, the Better Business Bureau of Southland, Inc. (Los Angeles BBB ) may once again sidestep charges of libel, slander or defamation.

The Los Angeles BBB has used the SLAPP motion, which became law in 1992, to successfully shut down multiple lawsuits for slander, libel or defamation by arguing that the BBB performs a public service. This time around the plaintiff argued that since 90 percent of the Los Angeles BBB’s income and 40 percent of their employees are engaged in telemarketing, the Los Angeles BBB is in fact a business, not a public service organization. Initially, the judge ruled in the plaintiff’s favor but later reversed his decision when the state Court of Appeal expressed interest in the case.

The reversal brought the second phase of the SLAPP motion into play which deals with the public dimension of the issue—is the general public at risk? The plaintiff is arguing that there is real significance public dimension as they are a very small, niche market business. The defendant in this action (the Los Angeles BBB ), has argued previously that since they are a public service organization, all pronouncements from them are of interest to the general public, and therefore can't be held liable.

This story, as well as other aspects of the Better Business Bureau behavior, motives and business model, including their complaint handling process have been examined in bbbroundup.com, a website authored by Jimmie Rivers.

Link: http://www.bbbroundup.com

According to William G. Mitchell, CEO of Better Business Bureau of the Southland, Inc. his office of the BBB handles 10,000 complaints per month. I accept this number and concede that Mr. Mitchell is in a better position than I to know the current figure.

However, my problems with the BBB complaint process are only increased by this revelation. Here's my take.

First is the margin of error that exists in the Complaint Handling process used by the LA BBB. To be handled correctly, an average complaint should require at least a half-hour of attention from a BBB employee.

(Just think of how much time you spent the last time you tried to resolve a complaint on your own then multiply by two. That's because the BBB inserts itself into the middle of the complaint process and therefore must communicate with both the consumer and the business before it can reach any decision.)

That's 5000 BBB employee hours spent handling the 10,000 complaints each month. That's approximately 30 full time employees dedicated to handling complaints. Rather than hire the necessary personnel, the LA BBB uses automated software throughout the process. There's too few people, too much pigeonholing and too much room for error.

Additionally, nowhere on the LA BBB website are there any definitions for the various complaint descriptions. What's the difference between an "unanswered" and "unassigned" complaint? Between "refusing to make an adjustment" and "refusing to adjust, relying on terms of the contract"? Do you know? Apparently the BBB doesn't know either, otherwise you'd think they'd tell us.

Second is that the algorithm places a heavy emphasis on the results of the complaint process.

(Almost 40% of the 16 criteria used in the algorithm have to do with complaints. The penalties for complaints not properly handled as deemed by the BBB are among the most severe in the entire algorithm.)

As we've just discussed, there is room for error in the complaint process, and any error becomes magnified by the algorithm. The clearest proof of this is the goofy grades.

Finally, there is a built in bias on the consumer side. This manifests itself especially when the LA BBB uses these complaints as sales leads, rather than try to impress the business with their ethics.

I want to thank Mr. Mitchell for bringing this matter to our attention.

Link: http://www.bbbroundup.com

Excerpts From the Accreditation Standards Page of the Los Angeles Better Business Bureau

Maintain at least a B rating with this Bureau and, if headquartered elsewhere than this Bureau’s service area, at least a B rating by that Bureau.

OR READ ANOTHER WAY, BBB MEMBERSHIP GUARANTEES AT LEAST A B RATING.

Respond to all complaints presented by the Bureau promptly and in accordance with the Bureau's complaint resolution procedures and cooperate with Bureau efforts to eliminate the underlying causes of patterns of customer complaints.

THERE IS NO DISCLOSURE OF WHAT THESE COMPLAINT RESOLUTION PROCEDURES ARE-WHICH LEAVES A LOT OF WRIGGLE ROOM IN HOW COMPLAINTS GET HANDLED. NOTICE TOO, THAT COMPLAINTS MUST BE HANDLED ACCORDING TO BBB PROCEDURES, NOT THE BUSINESS' PROCEDURES.

Taken together, these two conditions of BBB Accreditation show the lack of transparency the BBB employs about most things. They also call into question the disingenuous BBB media speak about the letter grade benefits of BBB Accreditation that have been published. In these statements, the BBB says that BBB Accreditation accounts for only a half-grade improvement. Now we find that BBB Accreditation means the Letter Grade curve starts at a "B" and goes up from there. At least that's the way the Los Angeles Better Business Bureau does things.

Link: http://www.bbbroundup.com

There has been a shift in this story recently. No, I'm not talking about the false accusations that have recently attacked the credibility of Jimmie Rivers and bbbRoundup. Those come with the territory.

Rather I'm talking about businesses that have good Better Business Bureau grades ("A" Grades), some BBB accredited members--some not, who have begun stepping up to the plate over the last few weeks and have come to me, on the record, with their concerns over the Better Business Bureau standards and practices. Some have gone so far as to publish notices on their business' websites slamming the Better Business Bureau--even though they currently have "A" grades.

That's a pretty strong indicator that something is broken at the Better Business Bureau. It's also a pretty good indicator that the story is picking up steam. I have chosen to not "out" these sources, choosing instead to wait and see what the BBB reaction is once they discover these new critics. I'm not willing to sacrifice these businesses for the sake of this story. I will however, cover the actions, if any, that the Better Business Bureau takes against them.

Link: http://www.bbbroundup.com

One of the great things about the internet is that is allows for social advocacy journalism. This story is based on information furnished to bbbroundup by one such individual.

Top credit card company executives are scheduled to meet with Obama administration officials today (Thursday, April 23, 2009) at the White House. Topics of discussion: legislation aimed at curbing deceptive practices and improving transparency in bank/credit card lending practices and interest rates. We thought it would be an interesting exercise to look at leading credit card and financial institutions through the eyes of the Better Business Bureau.

Great news! According to the Better Business Bureau, we're in good hands. Our banking institutions and credit card companies all seem to be fine, upstanding pillars of the community, at least the BBB thinks so. Mind you, this is the same BBB that published a report stating complaints against Financial Services institutions were at or near the top of the total complaint list for 2008. Can't imagine why the White House is even calling the meeting when obviously there's nothing to fix (at least in the eyes of the Better Business Bureau). By the way, all of these fine financial institutions are members of the Better Business Bureau with the possible exception of MasterCard.

The Links to The Financial Institutions BBB Grades
American Express
Bank of America
Citigroup
Wells Fargo
JP Morgan Chase
Capital One
Discover
Visa
MasterCard