Using the Better Business Bureau to Research Companies

Recently, CNN wrote an article entitled “Slammed by the government, A-rated by the Better Business Bureau.” In this article, CNN summarizes their investigation into how the Better Business Bureau’s (BBB) rating system works. One of the main arguments the article makes is that the BBB’s rating system is flawed. To illustrate this point, the article showcases how there are various organizations that have an A+ rating with the Better Business Bureau even after government regulators deemed them of having committed wrong against their customers. In most cases (though not all), these companies pay the BBB for their memberships. Since many Ventura County residents look to the BBB when deciding whether to do business with a company or not, we felt like we should cover a few key points of the CNN investigation.

Key Points About the Better Business Bureau

First off, despite what many people believe, the Better Business Bureau is not a government organization. The BBB is a non-profit organization whose purpose is to act as an intermediary between consumers and businesses. However, in order to become an “accredited business” with the BBB and be able to use their logo, a company must pay dues to the BBB. Although the government is by no means perfect, most people would expect that a government organization would be impartial when it comes to rating businesses. Part of the recent controversy of the BBB is the amount of dues-paying businesses that have had lawsuits against them from consumers and the government, yet still maintain an A+ rating. Although it has never been proven and may never be, some experts argue that the BBB is playing politics by favoring dues-paying members and giving them undeserved high ratings.

A big factor in obtaining and keeping a good rating with the Better Business Bureau is by resolving consumer complaints that are filed. CNN states that the BBB’s policy on resolving complaints is “if a company addresses the issue or makes a “good faith” effort.” During CNN’s investigation, they found multiple instances showing that it is easier for dues-paying businesses to have their complaints “resolved” than non dues-paying businesses. Dues-paying businesses were shown to be able to resolve complaints by sending generic letters that do not even address the issue that the consumer had. Meanwhile, there were many non-dues-paying businesses that proactively tried to work with consumers and the BBB but were unable to get the Better Business Bureau to correct their low rating even after they met the consumer’s concerns. While there was no specific data provided to show how widespread these discrepancies are, it at least shows that the BBB ratings cannot be taken as gospel.

Yet another example of the BBB’s flawed rating system is how ratings of many businesses changed once the BBB was contacted by CNN about their investigation. As mentioned above, CNN discovered a number of businesses that were in trouble with government regulators yet still maintained an A+ rating with the BBB. Coincidently, shortly after CNN asked the BBB about these businesses, many of them had their grades downgraded or had alerts added to their page about the government actions against the companies. CNN also found that there were several big name, reputable companies who had their ratings fluctuate wildly in a matter of weeks from as low as F ratings all the way up to A+ ratings. A couple of these companies with wild fluctuations include Pepsi and Google.

What does this mean for Ventura County Residents?

First and foremost, we think that CNN’s investigation should show people that the BBB may not be the organization that many people thought it was. Many people have held the BBB in high esteem and believed that their ratings were foolproof. While we are not suggesting that the BBB is purposely misleading people, we would recommend that you consider more than one source when making decisions on whether to do business with a company or not. CNN did not provide the raw data of their investigation, so we do not know the percentage of companies that the BBB may report poorly on. Also, the Better Business Bureau lists the complaints they have received and the company’s response to those complaints. At the very least, you are able to read over those complaints and see for yourself if you think that the company is adequately addressing people’s concerns or if they are just responding with a generic response to keep their rating high. And don’t forget, there are many other websites where you can search for customer reviews and ratings on companies. When we are looking to do business with a new company, we make sure to check at least two or three sources online before making any decision regarding the company’s trustworthiness.

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