News reports, including a scathing one on 20/20, detailed how the Los Angeles Better Business Bureau inflated the grade of a business if the company bought a membership. In the last several years, the Better Business Bureau has been battered by bad ratings of its own. Now about those ratings: Companies are given an A-plus through F rating based on a number of factors, including the size of the business, how long it has operated, how it responds to each complaint and whether that complaint has been resolved - or the Better Business Bureau deems it resolved.Įven if the customer is dissatisfied in the end but the business seems to have made “a good-faith effort,” as decided by the bureau, then the complaint is decided in the company’s favor, said a bureau spokeswoman, Katherine Hutt. The national office receives a portion of those fees and is also funded by corporations through its self-regulatory programs. Local Better Business Bureaus are funded primarily by accreditation fees. A business can only be called accredited if it pays a fee, which varies by location, but starts at about $300 annually and goes up, and meets standards set by the bureau, which include a scoutlike list of requirements such as advertising honestly, telling the truth and being transparent.Ī business is also listed in the bureau’s database if it asks to be or if a consumer files a complaint. It now operates as a nonprofit with almost five million businesses in the bureau’s database only about 400,000 of those are accredited.Īccredited is a term that may confuse consumers. It was started back in 1912 by businesses primarily to correct advertising abuses. And despite often being labeled such, it is not a consumer watchdog organization. It isn’t a government agency and has no enforcement power. So here are some tips on how the raters rate to help you decide how much credence to give the information they provide, starting with the Better Business Bureau, the oldest and arguably best known.įirst of all, it’s important to lay out what the Better Business Bureau is and isn’t. Consumers and companies find them very useful on one extreme or worse than useless on the other. Just those three rating services alone give millions of people information about millions of companies every year. There are other options out there like Angie’s List and Yelp, to name a few of the better known. When I looked it up on the Better Business Bureau website, it had an A-plus rating. But then I wrote an article about a slightly dodgy company that many people reported problems with. Like most people, I saw the century-old institution as a helpful tool for consumers. OVER the years, when writing about subjects as varied as driving schools and air duct cleaners, I’ve given the seemingly benign advice to check out companies with the Better Business Bureau.
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May 2023
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