bbb roundup | Lead Investigative Report on the Better Business Bureau

		AN INVESTIGATIVE NEWS SERIES ON THE STANDARDS AND PRACTICES OF THE BETTER BUSINESS BUREAU START WITH TRUTH
		V 1.1 March 2009

APRIL 22, 2009. BREAKING NEWS. Upcoming motions in ongoing legal suit against the Better Business Bureau of the Southland, Inc. to be heard Friday. Will the BBB succeed in avoiding trial once again by using the SLAPP?

MAKING A BETTER, BETTER BUSINESS BUREAU

Over the years, the Better Business Bureau has generally done a good job in its self-appointed role as consumer advocate, champion of the little guy. The BBB acts aggressively and promptly when it uncovers a scam and does a good job in getting this information to the consumer. Recently, however, the image of the BBB has been tarnished by the ongoing brouhaha over their new grading system. It didn't help things that businesses which paid to be members of the BBB often had substantially higher grades than businesses who didn't join the BBB.   This grading payola was good fodder for the press, many of whom jumped on the story.

The existence of the Internet revealed that questions about the Better Business Bureau's new grading system weren't isolated instances but system-wide problems from across the nation with the grading process itself. Along the way, questions were raised about the lack of due diligence performed by the Better Business Bureau when entering a business into their database. Questions about the accuracy of business listings (as well as their grades) were raised about both member and non-member entries.   There were also a few instances of the perennial BBB story concerning their over-aggressive telemarketing efforts to enlist businesses to join. Taken together, these issues and problems indicate a lack of cohesive national oversight. Too many local Better Business Bureau Offices are let free to run wild, distort policy, perform incorrectly without recourse.

1. BBB GRADING SYSTEM PAYOLA

The "A" through "F" grading system was launched by the Better Business Bureau on January 1st to much fanfare. Shortly there after the bloom began to wilt. One undesired side-effect of the new grading system is that it exposed inequities in the Better Business Bureau's grading system that had previously been hidden behind the vagueness of the "Satisfactory" and "Unsatisfactory" grading system. Many reporters latched onto this story. For a roundup of these stories check out our On The Record section. Two of the more ludicrous examples of BBB members getting better grades than comparable non-member businesses were revealed by BBBroundup and may be seen in their original context here.   Here is the information from actual screen shots that were captured in late February and early March of this year.

A look at the time line is both interesting and informative:

March 12, 2009. BBBroundup.com is launched.
March 19, 2009. The Better Business Bureau becomes aware of our site and between the CBBB and its regional offices make over 40 visits to BBBroundup.com
March 20, 2009. The Los Angeles Better Business Bureau revises the grades for both the Los Angeles Times and Disneyland Resort from a "F" to an "A" with no notice, announcement or justification.

When put in context with the jump from "F" to "A" for both Los Angeles based businesses, one has to wonder at what was behind the improvement in grades. Complaints does not seem to be a factor here....Disneyland actually has one more complaint with their "A" grade than they did with their "F," while the Los Angeles Times has three fewer complaints with their "A" grade than their "F" grade. It is unlikely that a 1% decrease in complaints, in the case of the Times justifies the move from an "F" to an "A", just as it is unlikely that the 3% increase in complaints for Disneyland warranted the move from a "F" grade to an "A."

Los Angeles Times and Disneyland BBB grades

2. INCONSISTENCY

Consistency is a concept that the Better Business Bureau has yet to perfect. Take for instance the Better Business Bureaus' policies on how they take into account government actions against a business when grading said business. According to Howard Schwartz of the Connecticut Better Business Bureau the bureau "does not report on government actions." Contradicting this, Judy Mills of the Southwest Missouri BBB states that "Variables plugged into the (grading) algorithm include government actions against a business." Based on the events of the last few weeks, it seems likely that the Connecticut Better Business Bureau wishes they adopted the Missouri approach. On March 18, the Attorney General for the State of Connecticut filed suit against this year's Connecticut BBB Torch Award and has demanded responses from the Connecticut BBB on their grading system and other issues.

(Editor's note: for an excellent series on the troubles facing the Connecticut Better Business Bureau read George Gombossy's column in the Hartford Courant. )

The inconsistency in what counts and doesn't count towards a businesses' grade has led to great disparity between different regional BBB offices grading essentially the same businesses. This is why Disneyland in California had a "F" and Disneyworld in Orlando had a "B", the San Jose Mercury News a "F" and the Philadelphia Enquirer a "C", and other regional discrepancies that have no rhyme or reason.

Other inconsistencies exist: how the word "accreditation" is used and what it means; how complaints are displayed (some BBB's list only 12 months of complaints, others 36 months); whether one can view the actual complaints or must make-do with the synopsis; even the color scheme of the various member sites differs. Just as one trusts that a MacDonald's Quarter Pounder with Cheese would taste the same in Chicago as it would in Reno or Little Rock, one would hope that a "A" grade in one BBB region would mean the same as an "A" grade in another. Sadly this is not the case.

3. OVERLY AGGRESSIVE SALES TACTICS

Regardless of its not-for-profit status, the Better Business Bureau operates as a business. It's main source of revenues comes from the membership fees it charges member businesses. This means there is a great incentive on getting new businesses to join the BBB. This in turn has led to a significant portion of Better Business Bureau employees being nothing more than telemarketers who solicit businesses to join. Common tactics employed are "the warning call" in which the BBB representative will call up and explain how they just received a complaint about a business and this needs to be addressed right away and that joining the BBB is somehow the best way to handle this complaint. Many businesses have complained about excessive calls (six or seven within a one week period for instance.) We will have an in-depth look at this issue shortly, and while it is not a major issue, it is interesting to note that these same tactics, if employed by any other business would be grounds for a complaint that would tarnish their BBB grade.

LACK OF OVERSIGHT

Despite the sexiness of the pay for grade issue with the media, to this reporter the real issue that needs to be cleaned up at the Better Business Bureau is the lack of oversight. The CBBB (national BBB office) lack of oversight of their regional offices has led to the non-standardized, non-uniform regional practices and discrepancies. This reflects badly on the Better Business Bureau and calls into question the grading system, the objectivity of BBB reports, and erodes the trust consumer and business can place in the BBB.

Additionally, this lack of oversight has led to damages to small business who have no recourse against bogus claims and erroneous information and wrongly given bad grades from various regional BBB offices. In the event a small business believes they have been "done wrong" by their local BBB they find themselves without recourse. The regional BBB routinely refuses to not only change a businesses grade, but also will not agree to a meeting on the issue, nor accept mediation or arbitration to settle the dispute. Yet, the BBB routinely gets involved in arbitration on behalf of the consumer against member businesses. The CBBB, or national BBB, in turn refuses to entertain any request to address the wrong doing and refers everything back to local BBB. Thus, the small business is not only prevented from clearing their good name, they are denied even the opportunity of arguing their case. To put things in perspective, the following chart demonstrates how the BBB system of handling a dispute compares with that of the United States legal system.

THE LEGAL SYSTEM	THE BBB SYSTEM

Innocent until proven guilty.	Guilty unless proven innocent.
Right of appeal.	No right of appeal.
No conflict of interest or appearance thereof.	Conflict of interest or appearance thereof.
Jury of peers.	No jury.
Oversight bodies.	No oversight.
Hearsay not allowed.	Hearsay allowed and relied on.
Would rather let 100 guilty go free than convict one innocent party.	Doesn't care about your guilt or innocence.
Right to a speedy trial.	No trial, just the verdict.
Transparency and in the public record.	Obfuscation and not available to the public

Conclusion: The best system of justice developed by man.	Conclusion: Kangaroo Court.

As a society, we don't allow the Better Business Bureau's standards of justice and fair play to be tolerated in our courts. So why do we allow these standards and practices to be tolerated within our business community? Clearly, the new grading system, the regional inconsistencies, the overaggressive sales tactics and the lack of oversight are areas that the Better Business Bureau needs to improve. These problems and issues do a dis-service to the community: they deprive the consumer of accurate, reliable information and can hurt innocent businesses while rewarding bad businesses. The BBB asks us to trust them, then they go scurrying around at all hours of the night, putting band-aid tweaks on their most egregious mistakes, and fail to acknowledge their errors or actions. Trust is hard under such circumstances.

Editor's note: Neither I or this website have a problem with the Better Business Bureau. Indeed, there is a need for a consumer advocacy group that the public can turn to, and in most cases, the Better Business Bureau fulfills this role adequately. What we do have a problem with is the BBB's "A-F" grading system. It is demonstratively biased, based on hearsay, weighted in favor of dues paying members and offers no recourse when the BBB makes an error. It is obvious the Better Business Bureau does not now, nor ever will have, the resources to fully investigate the four million businesses in their database, much less grade them with any sense of accuracy. It's an impossible job, and to think otherwise is a mistake that the BBB should acknowledge so they can get back to their reason for existence--protecting the consumer. There's an old saying, "who will watch the watchers" and it applies here as the BBB has set themselves up to be above the law. We are simply here to help the Better Business Bureau do a better job so that they may properly serve the consumer, the business community and themselves.

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february 2009