Since its inception in 1912, the Better Business Bureau (BBB) has been a cornerstone resource for gauging the performance and credibility of businesses across North America. As consumers increasingly turn to online platforms to assess businesses—from wireless service providers to local plumbers—the BBB remains a prominent figure in fostering “marketplace trust.” However, questions linger regarding the reliability of its rating system and the potential conflicts of interest that may arise from its funding model. This article delves into how the BBB operates, its rating methods, the dispute resolution process, and addresses some criticisms that challenge its credibility.
The Mission of the BBB
The main mission of the BBB is to promote “marketplace trust.” It achieves this through two primary functions:
- Business Ratings: The BBB assesses businesses based on reliability and performance, giving them grades on a scale from A to F.
- Consumer Complaint Resolution: The organization acts as a mediator when consumers have complaints about businesses, providing a platform for resolution.
The BBB chapters throughout North America are funded primarily through membership fees, which provide consumers access to a wealth of business profiles free of charge. Each profile generally includes company background information, BBB ratings, customer reviews, and data on consumer complaints.
The BBB Rating System
The grading system employed by the BBB is multifaceted and takes into account more than a dozen factors. Notably, these factors include the company’s history of handling consumer complaints, compliance with advertising standards, and any government actions taken against the company.
Accredited vs. Non-Accredited Businesses
Businesses have the option to become "accredited," which is prominently displayed in their profiles—often for marketing purposes. The path to accreditation is stringent and includes:
- Supporting the BBB's mission.
- Maintaining a minimum grade of “B.”
- Promptly addressing consumer complaints.
Accredited businesses contribute significantly to the BBB’s revenue, with annual fees ranging from approximately $500 for small companies to over $11,000 for larger entities.
Rating Mechanics
To arrive at a letter grade, the BBB assigns or deducts points based on performance in 13 specific categories, with certain areas weighted more heavily than others. Key factors that influence ratings include:
- Number of unresolved and unanswered complaints
- Business type and nature of services offered
- Record of compliance with mediation or arbitration guidelines
- Government actions against the business
Scores are converted to letter grades, where a score of 97-100 results in an “A+,” while any score below 60 results in an “F.”
Dispute Resolution Process
The BBB also plays a crucial role as a facilitator of disputes between consumers and businesses. Consumers can easily file complaints either online or through their local BBB chapter.
- Once a complaint is filed, businesses are expected to respond within 14 days.
- If they do not respond, the BBB sends a follow-up notice.
- The resolution can lead to one of five designations: Resolved, Answered, Unresolved, Unanswered, or Unpursuable.
For accredited companies, satisfactory handling of complaints is crucial for maintaining their status; for non-accredited businesses, responding to complaints is voluntary yet beneficial for improving their ratings.
Criticisms and Limitations of the BBB
Despite its long history, the BBB is not without controversy. Critics have noted potential conflicts of interest arising from the organization’s funding structure:
- Accredited Businesses vs. Non-Accredited: Membership fees have led some to question whether the BBB is more lenient in grading businesses that pay for accreditation.
- High Ratings for Controversial Companies: Investigations have revealed that certain businesses engaged in controversial or illegal activities still managed to achieve high ratings, raising questions about the BBB’s effectiveness.
For instance, a 2015 CNN investigation highlighted cases of businesses receiving favorable ratings despite facing substantial regulatory penalties. A notable example was HCR Manorcare, implicated in Medicare fraud yet holding an "A+" rating from the BBB.
While the BBB maintains that their ratings are based on a company's response to complaints, non-accredited businesses may not be scrutinized as closely, which fuels the perception of bias.
Utilizing the BBB Effectively
Despite its limitations, the BBB can be a valuable resource for consumers. It is crucial to balance BBB ratings with additional research tools:
- Consumer Reviews: Platforms such as Yelp, Google Reviews, and Angie's List offer consumer-generated feedback that can provide context to a business's BBB rating.
- Direct Feedback: Engaging with previous customers or reading in-depth reviews on other platforms can give insight beyond what’s recorded in the BBB profiles.
Conclusion
As a long-standing institution aimed at enhancing consumer trust, the Better Business Bureau undoubtedly provides valuable information when making business decisions. However, its grading system, while helpful, is not infallible and can be influenced by member accreditation dynamics. Therefore, consumers are encouraged to use the BBB in conjunction with other resources to ensure informed decision-making, particularly for significant purchases or essential service installations.