BBB Under Scrutiny

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

As a "public service" organization, the Better Business Bureau should be transparent and offer full disclosure. Since they inaugurated their new Letter Grade system for business reliability reports in January of this year, the BBB has been under increasing fire for grades that don't make sense; for higher grades being given to business members of the BBB; and for their complaint handling process.

Recently it has been pointed out that the LA BBB, as well as the national BBB have disclosed this information. For the complete story on this "hidden" disclosure

Link: http://www.bbbroundup.com

Jan Norman at the Orange Country Register published an article today Firms can buy higher Better Business Bureau rating.

It's nice to see another main stream media member look into the story. At the end of the article she has a poll on "Do You Trust Better Business Bureau Ratings?" It can be found at:
http://jan.freedomblogging.com/2009/04/27/firms-can-buy-higher-better-business-bureau-rating/12723

Right now, roughly two-thirds of those voting say they do NOT trust the BBB ratings. The BBB slogan is start with trust. Perhaps that trust is not as strong at the BBB thinks.

UPDATE: The percentage of voters on this poll stating they do NOT trust the BBB ratings is now at 71% with 100 votes cast.

UPDATE: 11:30PM With 138 votes cast over 71% of the votes state they do NOT trust the BBB ratings.

UPDATE APRIL 29: With 164 votes cast, over 68% of the votes state they do NOT trust the BBB ratings.

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.