Can You Trust the Better Business Bureau Ratings

Recently blogs and a news show came out with a report that the BBB ratings could be biased and unfair. Can you trust the Better Business Bureau ratings.

For years I have trusted the ratings of the Better Business Bureau until recently when a TV documentary came out with a report that the BBB ratings could be biased and unfair.

I thought that the ratings for companies and services from the Better Business Bureau were legitimate, fair, accurate and not biased in any way. I was wrong. Recent news stories concerning the Better Business Bureau show that the ratings the BBB gives to companies can be influenced as to whether or not the company is a paying member of the BBB. In addition to being a paying member of the BBB it also appears that some companies have been able to practically buy a higher rating.

The Better Business Bureau Rating System

The BBB has a rating system that goes from A+ down to F. This grade is the BBB’s “degree of confidence” for a certain company to perform as stated and in a trustworthy professional manner.

According to the Better Business Bureau’s own FAQ, they arrive at the letter grade for each company through a proprietary formula that includes 17 different factors based on information the BBB receives about a company. The BBB goes on to say that 85% of the grade is determined by the complaints received by the BBB.

The Better Business Bureau does charge a business to be accredited with them, according to the BBB; this does not influence their grade rating. The Better Business Bureau charges a company between $200 and $10,000 to be an accredited business according to the size of the company [Smart Money].

Pay to Play

Many business owners including the famous Wolfgang Puck called the Better Business Bureau a pay to play scam. Wolfgang Puck said that he has refused to pay the BBB the required amount and they continue to give his company an F rating. The CEO of the Boston Ritz Carlton doesn’t understand the rating the BBB gives them either. The Ritz Carlton has an F rating with only two complaints against them among millions of customers [ABC News]

The television show 20/20 aired a report on November 12, 2010 about the Better Business Bureau and recorded how a business could get their rating increased plus old resolved complaints removed if they paid the fee.

Several businessmen and a blogger decided to test the BBB. They paid the Los Angeles BBB the fees for three fake businesses and when their credit card payment cleared they received A- ratings.

In November 2010, the State Attorney General of Connecticut, Richard Blumenthal, wrote a letter to the Better Business Bureau outlining his concerns about the BBB rating system and how paying can skew the ratings which are not fair to consumers or businesses.

Mr. Blumenthal started his investigation into the Better Business Bureau in March 2009 and in November 2010 he finally wrote a letter to the BBB that said “The time has come for real and decisive action” [ABC News].

From an F Rating to an A+

I have had to occasionally check a nationwide company with its headquarters in Southern California for the past 18 months. This company has been rated an F and deservedly so by the Los Angeles Better Business Bureau.

Then suddenly within the past month this company went from a long time F rating to an A+ for no reason. This company had nearly 1,000 consumer complaints to the Los Angeles BBB and at least 75 civil lawsuits against them in one city alone. And for some reason they jump to an A+. I asked the Better Business Bureau about this and they told me it was a computer problem. I continued to check and the rating is still the A+.

The Better Business Bureau Response

The BBB responded by saying that these allegations are not true, they do not give a higher rating to businesses that pay them to become accredited and businesses cannot buy a higher rating. The BBB also said that the high ratings for the nonexistent companies were errors made by Better Business Bureau salespeople.

Conclusion

Hopefully with the recent TV stories and the Connecticut Attorney General, the Better Business Bureau will come up with a fair and accurate rating system that reflects how a company conducts its business and handles complaints.

Copyright Sam Montana November 23, 2010

Resources

ABC News 20/20

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