What Grade Would You Give the BBB?
For nearly a century, consumers have counted on the Better Business Bureau (BBB) as a source for independent information on the competency and skill of a particular business.
Today, however, much of this trust has gone by the wayside, due largely in part to recent revelations that they BBB is operating under a "pay-to-play" platform, meaning those businesses who pay their membership dues receive higher ratings than those who do not.
Until a few years ago, businesses were simply rated "satisfactory" or "unsatisfactory." However, that all changed at the behest of the Los Angeles chapter, the largest of the 122 BBB chapters in the country. Today, they operate on a report-card-style letter grade that can range from A-plus to F - and problems have arisen from this change.
An ABC News story showcased two small business owners who were told in no uncertain terms by BBB telemarketers that their low grades could be made into As simply by paying membership dues... and that's exactly what happened within one business day in both cases once they paid.
Are businesses now being subjected to "shakedown-style" tactics?
While BBB President Steve Cox says that no such strategies are being employed, there does seem to be ample evidence to the contrary. For example, the same story also highlighted other well-known companies to support its claim, including the Ritz-Carlton Hotel in Boston. Despite having just two complaints against it, had an F letter grade.
Meanwhile, "Hamas," a fictitious company set up by a group of small businesses and a blogger to expose the BBB, paid a $425 membership fee and received an A-minus rating. This is the same HAMAS that is considered a terrorist organization. In addition, a dues-paying, white-supremacist Website called Stormfront scored an A-plus grade.
In a recent letter to the BBB, former Connecticut Attorney General and US Senator Richard Blumenthal had this to say: "I am deeply concerned that certain BBB practices threaten the reputation and effectiveness as a reliable resource for consumers. In particular, the BBB's current rating system is based, in part, on the payment of inadequately disclosed accreditation fees. This financial influence is both harmful and misleading to consumers... I find no reasonable basis for tying ratings points to a membership fee - in essence, creating what could be viewed as a "pay-to-play" system."
To its credit, the BBB has already made changes in light of this new information. Their executive committee says that companies will no longer receive additional points because of an accredited status. They also state that they will be reviewing their overall process for accrediting and will involve an independent third party to assist with the process going forward.
Still, one now wonders whether the "consumer neighborhood watchdog" has now become the bully on the block.
Today, however, much of this trust has gone by the wayside, due largely in part to recent revelations that they BBB is operating under a "pay-to-play" platform, meaning those businesses who pay their membership dues receive higher ratings than those who do not.
Until a few years ago, businesses were simply rated "satisfactory" or "unsatisfactory." However, that all changed at the behest of the Los Angeles chapter, the largest of the 122 BBB chapters in the country. Today, they operate on a report-card-style letter grade that can range from A-plus to F - and problems have arisen from this change.
An ABC News story showcased two small business owners who were told in no uncertain terms by BBB telemarketers that their low grades could be made into As simply by paying membership dues... and that's exactly what happened within one business day in both cases once they paid.
Are businesses now being subjected to "shakedown-style" tactics?
While BBB President Steve Cox says that no such strategies are being employed, there does seem to be ample evidence to the contrary. For example, the same story also highlighted other well-known companies to support its claim, including the Ritz-Carlton Hotel in Boston. Despite having just two complaints against it, had an F letter grade.
Meanwhile, "Hamas," a fictitious company set up by a group of small businesses and a blogger to expose the BBB, paid a $425 membership fee and received an A-minus rating. This is the same HAMAS that is considered a terrorist organization. In addition, a dues-paying, white-supremacist Website called Stormfront scored an A-plus grade.
In a recent letter to the BBB, former Connecticut Attorney General and US Senator Richard Blumenthal had this to say: "I am deeply concerned that certain BBB practices threaten the reputation and effectiveness as a reliable resource for consumers. In particular, the BBB's current rating system is based, in part, on the payment of inadequately disclosed accreditation fees. This financial influence is both harmful and misleading to consumers... I find no reasonable basis for tying ratings points to a membership fee - in essence, creating what could be viewed as a "pay-to-play" system."
To its credit, the BBB has already made changes in light of this new information. Their executive committee says that companies will no longer receive additional points because of an accredited status. They also state that they will be reviewing their overall process for accrediting and will involve an independent third party to assist with the process going forward.
Still, one now wonders whether the "consumer neighborhood watchdog" has now become the bully on the block.
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