Truth About the Better Business Bureau – Is BBB Membership Good for Your Company?

Posted by Careers Plus Resumes | | Category: Business & Economy | Comments: 0

This is a topic I’ve been wanting to write about for a long time, so here goes. Anyone who’s ever had dealings in the business world knows about the Better Business Bureau (BBB) and their consumer confidence mission to eliminate or reduce fraud in the marketplace. This seems like a great notion in general, but what happens when the BBB is suspected of committing fraud against businesses?

At first thought, this seems far-fetched. Surely the Better Business Bureau holds itself (along with other businesses across the United States) to the highest standards and would not dare commit fraud. Hypothetical as this may seem, it is a definite possibility based on the evidence and allegations against them in recent years. The BBB has been sued by countless businesses over the past few years, with allegations ranging from false reporting, defamation/libel, and fraudulent grading systems aimed at giving higher ratings to paying companies for their annual membership to become a “BBB Accredited Business.”

First, it is important to know that the BBB is NOT a government organization, not regulated by any regulatory authority, and carries no authority whatsoever over a business on how they conduct their operations. The Better Business Bureau gives the impression that it is a quasi-government agency, when in fact, it is not. In the business world, this would be considered false advertising according to the BBB’s own standards. Quite the hypocrisy here.

Is paying for the BBB membership good for your company? That is a decision you will have to carefully make after reading further…

While the Better Business Bureau seems to do a good job at exposing some fraudulent business practices, its methods of accrediting businesses are borderline “mafia-style” and “bully-like” in a sense. For example, one media outlet wrote: “The Better Business Bureau is a Mafia-Like Racket” that uses blackmail and coercion to set its bogus ratings and even defamed a law firm for refusing to submit to its shakedown methods, claiming a $200 Million complaint against the bureau in Los Angeles.

Brookstone Law of Newport Beach sued the Better Business Bureau of the Southland and the Council of Better Business Bureaus, in Superior Court. The lead defendant is based in Colton, a far eastern L.A. suburb. Brookstone claims that the Better Business Bureau, which rates more than 4 million businesses, is often mistaken for a government agency, and markets itself as an “unbiased” consumer advocate, but is anything but. “More than 70 percent of consumers in the United States believe the BBB is a government organization,” the complaint states.

It continues: “Operating under the guise of ‘legitimate authority’ – a title which was never officially given by any government agency, the highly profitable BBB abuses non-member businesses and consumers through intimidation, coercion, bogus ‘ratings,’ favoritism and blackmail. Businesses caught up in this Mafia-like racket have used terms such as shakedown, criminal, illegal, immoral, and unjust when they find out the truth about the BBB, and how their businesses are affected by this fraudulent organization.”

Another source (Orlando Sentinel) claims that the KEL Law Firm sued the Better Business Bureau over rating system.  The suit alleges the rating system is flawed, erroneous, misleading and, in short, anything but the unbiased process the BBB claims in its promotional material.

The bureau “intentionally provides biased and inconsistent ratings of businesses, specifically favoring businesses that have chosen to pay money to and participate in the Defendants own accreditation program,” the suit said. It also named as defendants BBB chief Judy Pepper and the Council of Better Business Bureaus Inc., based in Washington, D.C.

More recently, the BBB in Dallas Texas was sued by Lloyd Ward of Lloyd Ward & Associates PC for similar allegations. An appellate decision struck down their claims, so Lloyd filed a suit with the Texas Supreme Court which later declined to hear the Dallas attorney’s claim that the lower court wrongly dismissed his defamation suit against the BBB of Metropolitan Dallas Inc. They ruled that the BBB’s negative review system is protected by the Texas Citizens Participation Act of 2011 to combat strategic lawsuits.

Other reports claim that since becoming a paying member of the BBB to become “accredited” by their standards, businesses have seen a huge influx of complaints that they had never seen before just by having the BBB logo on their website. According to some, the BBB is a way for some consumers to take advantage of companies and defraud businesses after receiving a service or product. According to BBB’s Code of Advertising, “satisfaction guarantee,” “money back guarantee,” “free trial offer,” or similar representations should be used in advertising only if the seller or manufacturer refunds the full purchase price of the advertised product at the purchaser’s request. This seems like a very biased stance against businesses even if legitimate services or products were provided and the company’s satisfaction guarantee is warranted by offering replacement products or repairing services instead of just simply giving a refund.

In an even more staggering instance, the BBB was investigated by authorities for illegal activity, ABC’s 20/20 News Investigation, and several other news agencies for alleged fraudulent rating systems aimed at generating profits rather than creating a safe marketplace for consumers. This investigation led to a one-hour interview with the Better Business Bureau’s President, Steve Cox, who makes over $300,000 per year in salary alone. That’s quite a bit for an organization that claims to be a “non-profit” organization.

The investigation stemmed from complaints of the BBB supporting the terrorist group Hamas and white supremacist groups, giving them “A” ratings after becoming paying members. It was later found that the profiles/memberships created were a group of business owners who “punked” the BBB to prove a point since they had previously been scammed by the Better Business Bureau’s unethical sales tactics. You can watch some of the full reports here:

My personal experience with the Better Business Bureau of Middle Tennessee has been anything but pleasant. My experience dates back many years. I was initially contacted (almost to the point of harassment) to sign up for the BBB’s annual membership which would grant me access to basically nothing but a barrage of annoying emails of false complaints being posted to their website. To make a long story short, I have had similar experiences as mentioned above and have even tape recorded the BBB staff mocking me, poking fun, and even taunting me to “sue them” because “they don’t need me, I need them” were the exact words of the Middle Tennessee BBB President. Their immature and rude behavior was the result of my complaints directed at the BBB for neglecting their own policies when handling online complaints from consumers. I pointed out several mistakes made by their staff, both technical and legal, and was met with extreme retaliation in the form of bullying and false reviews being publicly posted on their website that they failed to screen according to their own terms.

The personal encounters I had by the staff at the BBB in Middle TN were appalling and very disturbing. This all happened right about the same time the Better Business Bureau, as a whole, was being investigated by authorities in 2010. My attorney at the time advised me that he felt their practices were unethical and might even be illegal. Apart from other business owners across the country, I decided not to sue them because it really wasn’t worth the effort based on a few bad run-ins with their unprofessional staff and their neglect to appropriately update their own systems. However, my opinion has since changed quite a bit after four years of continuous incompetence on their part to uphold their own code of business ethics that they so diligently force upon legitimate business owners or else they will get “F” ratings!

Some of the responses I received from the Middle TN BBB and their staff members include this:

“This communication is in response to your correspondence.  The issue discussed with BBB staff was addressed by redacting your customer’s written characterization of you in their formal complaint to BBB.  As explained, BBB does not have authority to edit customer complaint statements, beyond profanity and personal identifiers, without permission of the writer.  BBB received written permission from your customer to remove the characterization; and we regret that the redaction failed prior to publishing.”

  • So let me get this right. The BBB does “not” have authority to edit customer statements on their own website? Complete lie. Under whose oversight do they “not” have the authority? What an absolute fallacy conjured by the BBB to avoid any responsibility for their own neglect.
  • Especially when the BBB’s website states in part – “BBB reserves the right to not post in accordance with BBB policy…BBB may edit your Customer Review to protect privacy rights and to remove inappropriate language.”
  • I would surely like to know why the BBB does NOT have authority to edit comments on its own website when it claims to have that authority. Umm…

BBB staff “apologized for the redacting failure and confirmed the edit was now correctly published.  As quickly as BBB was made aware of the redacting failure, action was taken to correct the matter.  I’m unsure of what else BBB could have done other than apologize, accept responsibility and resolve your concern.  Isn’t that the course of action expected of all responsible business people committed to doing what is right?”

  • Am I in the twilight zone, or did I just read that “as quickly as the BBB was made aware for the redacting failure, action was taken to correct the matter?” First of all, the redacting failure was allowing the comment to be made in the first place when the customer requested it be removed several months prior to this response by the BBB to the company.
  • Are you asking me “Isn’t that the course of action expected of all responsible business people committed to doing what is right?” Well my answer is simply, yes, that’s exactly what’s expected. Could you have proven my own point for me any better?

Have you or your business had a bad experience with the BBB? Please leave your comments below and we will try to provide media exposure and as many legal resources as possible to assist you with your experience. It is important to note, that we do stand behind the BBB’s mission of providing a safe marketplace for consumers – but we do not accept hypocrisy on the Better Business Bureau’s part in failing to uphold its own ethical standards and policies just to generate gargantuan profits by implementing bully-like tactics against hard-working, American, small-business owners. What an absolute disgrace to society. How can consumers trust the BBB’s reports when their motive is driven by profits from businesses paying for ratings? Please leave your comments below.


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