Flaws Of The Better Business Bureau

When you hear the word bureau, what do you think about? If you’re an interior designer you might think of a chest of drawers. If you’re a writer you may notice that some words use more vowels than they have any right to. But if you happen to be pretty much anyone else, you probably think of government authority. The Federal Bureau of Investigation has the broadest authority of all U.S. law enforcement agencies. The U.S. Census Bureau is responsible for gathering accurate data about American citizens, and operates under titles 13 and 26 of the U.S. Code. So, something with a name like the Better Business Bureau (BBB) must likewise have authority to take action when needed, right?

No. Absolutely not. You see, the BBB isn’t actually a government agency of any kind. Then what authority do they have? you might ask. The answer, of course, is absolutely none.

No Accreditation

The BBB was founded way back in 1912 as a nonprofit organization with the goal of creating “An ethical marketplace where buyers and sellers can trust each other.” To do this, they have developed a rating system that ostensibly reflects the overall quality of the products or service of individual companies. So, if a particular company were to leave complaints unresolved, then its rating might drop from an A down to a B or even lower. For a business to receive accreditation from the BBB, which means that they “make a good faith effort to resolve any consumer complaints,” they must pay an annual membership fee . . . and right there the warning sirens in your head should have started going off. Because what’s to stop the BBB from basing their rating system, either partially or completely, on whether a company has been willing to pay for accreditation? Apparently, not much.

You see, the word nonprofit does not mean that they don’t make any money. It only means that any money that is made must remain within the company, and can be used for things like expenses and salaries. So, it’s like saying that you don’t make any profit, because you use all your money on yourself. The BBB is still driven by the desire to make money, and so, ironically, they are themselves just another business.

Unbiased or Not?

That might be an unfair comparison. After all, businesses exist to provide desired services to their customer base. The BBB seems to create not only the solution, but also the problem to begin with. Let’s take a look at a hypothetical, yet totally realistic situation:

A small business owner is contacted by a group that claims to be operating in the owner’s best interest. This group informs the owner that for a small fee, the business can enjoy the benefits of affiliating with the group. Should the business refuse to join, the group would not be able to endorse the business, and the business might suffer as a result.

Legal Extortion?

If you’ve ever seen a mobster movie, then you know that this is called extortion. It also seems to be the unofficial business model of the BBB. In 2010, a group of business owners created a nonexistent dummy corporation and named it Hamas, after the well-known terrorist group. They then paid the BBB $425 and obtained for it an A+ rating, despite never having actually had any customers. On the other end of the spectrum, businesses that refuse to pay—or stop paying—membership dues are often given low ratings. One moving/delivery company that had been buying accreditation for twenty years decided that they didn’t want to pay the annual fee any longer, and were promptly dropped from an A rating to a D-. So in effect, if you don’t have the money to buy a good rating (as many small businesses don’t during times of economic downturn), then you’re out of luck; Better Business Bureau complaints don’t really have any place to go. After all, who watches the watchmen?

However, these problems can still be addressed from within, right? Well sure. In fact, in response to concerns regarding their protection racket-like rating system, the national BBB’s executive committee voted to do something about it. Of course, nothing has been done, and ratings are still bought and sold like pastries in a bakery, but whatever.

About the Author: Robert Cordray is a freelance writer and expert in business and finances. He has received many accolades for his work in teaching and business consulting.

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