Is the Better Business Bureau Running a Racketeering Scam?
I’ve Tried That is scamming consumers, and here’s why- check out its rating with the Better Business Bureau:
Google is also iffy; its BBB score is a “C-”. E-Trade, which I’ve been happily using for years as my discount broker, gets a grade of “D-”.
You may think that the BBB is some government watchdog group that looks out for the consumer and mediates complaints against businesses. You might also think that any business listed with the BBB is legitimate.
It’s time to rethink the BBB.
The 20/20 Exposé of the BBB
Back in 2010, the ABC News show 20/20 conducted an investigation of the BBB of Southland, which served the Los Angeles area. What they found was a “non-profit” business using tactics akin to those of certain New Jersey sanitation companies. In essence, businesses that didn’t “pay to play” with the BBB by forking over $425 in membership dues were assigned substandard grades even if they had few or no complaints. Conversely, businesses that paid for membership in the BBB were assigned grades of “A-” or higher.
In a scambaiting maneuver, several local businesses decided to pay the $425 membership fee for a fictitious business named “Hamas” which, interestingly enough, is also the name of a Middle Eastern terrorist group. Hamas instantly got an “A-” grade. Stormfront, which is a neo-Nazi skinhead group, received an “A+” rating from the BBB when an anonymous blogger used this group’s name to register with the BBB and pay its membership fee.
But it didn’t stop there. Apparently, businesses with lackluster grades could also pay to improve their grades. When a local business owner called the Southland BBB, she was told by its customer service department that she could raise her business’ grade to an “A” from its current “C” if she simply paid a $395 membership fee. When she provided her credit card number to the rep, her business’ grade became an “A+” the next day. Another L.A. business owner was able to go from a “C-” to an “A+” by paying the $395.
After 20/20 interviewed the BBB CEO Steve Cox about the sham businesses receiving high grades and legitimate L.A. businesses being able to buy their good names, the Council of Better Business Bureaus shut down the Southland branch and noted this decision in a large press release dated March of 2013. However, it still took over two years for the BBB to shut down a branch that was openly engaging in extortion. And even after the expulsion of Southland, there is reason to doubt the BBB’s commitment to, as stated by Carrie Hurt, President and CEO of the CBBB, “a strong, standards-based BBB that consumers can depend upon and that businesses large and small can participate in with pride.”
Why am I still skeptical about the BBB?
“A few bad apples” is a myth.
There is a common practice in the business world when a (usually large) company is ousted for scandalous or outright illegal behavior: Blame the problem on a few “bad apples” and make a public example of them. However, for such bad apples to turn up in the first place, there is usually a permissive/complicit business environment that spoils them. And in the case of the BBB, that environment is still in place. Why?
Pervasive conflict of interest
The BBB is not some government body that’s acting as a third party watchdog group to protect consumers. In fact, consumers have little to do with the actual BBB. Technically, the BBB is a private 501(c)(6) non-profit organization that makes its revenues by selling annual memberships to businesses for a charge of $200 to $10,000, depending on the size of the company. Membership is synonymous with accreditation, by the way. National companies like Johnson & Johnson, Heinz and 3M are often invited to become CBBB corporate partners and pay up to $75,000 for this privilege.
That’s right- the BBB’s clients are not Joe-Blow Consumer or concerned taxpayers; they are corporations and firms that can actually afford to pay the annual BBB dues in order to become “accredited.” These facts are stated on the BBB blog.
However, if the BBB is making its revenues through dues-paying businesses, how can it remain objective when a client business receives a consumer complaint? In short, it can’t.
“Addressing” consumer complaints
Let’s say one of the BBB’s client businesses does receive a complaint from a consumer. In order to remain in good standing with the BBB, that business must demonstrate “good faith effort to resolve complaints.” However, the BBB does not explain just how this process should occur. A business could get away with sending a form email to the consumer saying “Sorry, try again,” and leaving the actual complaint unresolved.
If the consumer doesn’t provide a rebuttal within 10 days, the case is closed as “resolved.” Meanwhile, if a consumer truly wants to pursue a shady business via the BBB, she is charged a fee to use the BBB’s Dispute Resolution Services. Honestly, what consumer is going to shell out $79 to obtain a refund on a $29 item? In this way, businesses with a bunch of unhappy customers maintain their good grades with the BBB.
Living in oppositeland: I’ve Tried That is a scam (and so are Wolfgang Puck, Ritz Carlton and Disney)
As to why I’ve Tried That has a big, fat “F” rating, I may have a reason. On the BBB Code of Business Practices (BBB Accreditation Standards), there is the stipulation as to what a business in good standing with the BBB shouldn’t do:
Avoid involvement, by the business or its principals, in activities that reflect unfavorably on, or otherwise adversely affect the public image of BBB or its accredited businesses.
Since ITT regularly exposes scam businesses, it may have at one time inadvertently hit a BBB accredited business. Thus, for doing the actual work of the BBB, ITT gets slammed by this “watchdog” group.
I can live with I’ve Tried That being a scam.
Photo credit by deemikay