Should I Trust a Better Business Bureau Rating?

The Better Business Bureau (BBB) was founded over one hundred years ago. It served a valuable function when it was challenging to learn about different businesses and whether they were legitimate. The BBB is not affiliated with the government whatsoever. Instead, BBB is a private enterprise with over a hundred locally-owned franchises. Here is a link to the Wikipedia article on the BBB.

Locally owned BBB franchises make money by charging a business for being listed and being able to use the BBB logo in their advertising. If a person were to google: “Is the BBB still relevant?” there would be several articles that state that the BBB, because of the internet, is no longer as relevant as it once was.

Over 40 years as an attorney dealing with individuals and businesses facing financial problems, I became suspicious when I saw a business relying heavily on the BBB logo. Companies use the logo to convey instant credibility with consumers when they engage in questionable practices.

There are also articles explaining how businesses can manipulate the BBB and buy their ratings. For example, a September 30, 2015 article in “CNN Money” describes claims of questionable practices by local BBB organizations:

“Consumers should not trust a high grade from the BBB,” Joseph Ridout, a spokesperson for watchdog group Consumer Action, told CNN. “There are too many examples of companies that have been investigated or sued by government entities that nonetheless can maintain ratings of a high A or A+. Even if the BBB wants it to be fair, the rating system is broken.”

Because of the internet, there are more accurate ways to find information about a business or company. For example, there are reviews on Google and other websites. However, even Google reviews can be manipulated. For example, people can google “rip off” or “reviews” and the company’s name to find reports from individuals about a company.

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However, because the BBB has been around for so long, older generations often rely on and trust it. For example, many for-profit and nonprofit debt management companies advertise with the BBB logo on their websites to convey a sense of legitimacy.

The credit card companies and banks on whose behalf they collect authorize them to keep a percentage of the money seniors pay as a donation to their company.

Many nonprofit debt management companies don’t disclose that they have a conflict of interest. Because of their financial interest, they sometimes enroll, trusting lower-income and poor senior citizens in a debt management program without disclosing to a senior that their retirement income is protected and doesn’t need to be used to pay the old debt they can’t afford.

Of course, many completely legitimate companies register with the BBB and use their logo in their advertising. However, because many suspect businesses use the BBB to advertise, consumers must look at other sources to research a company. The internet makes that easier.

Eric Olsen, Executive Director HELPS Nonprofit Law Firm. HELPS assists seniors with debt.We protect seniors from unwanted debt collector contact. We also educate seniors about their financial rights, including how their Social Security and other retirement income are protected from collectors and available for their needs. We help many seniors who bank with a credit union, so we have seen firsthand the difficulties seniors face when their credit unions don’t follow the law. Learn more about HELPS at www.helpsishere.org or call HELPS toll-free at 855-435-7787.

1 thought on “Should I Trust a Better Business Bureau Rating?”

  1. I just wanted to make a few points related to the BBB and my own personal experiences with them.

    You said the 2015 article talks about questionable practices by some local BBB offices. I don’t know how much autonomy local offices had back in 2015 and if things are still like that today. What I do know is allegations against a handful of local BBB chapters seven years ago do not make the entire group unreliable in 2022. Is there an industry that hasn’t had some allegations against its members from time to time?

    I also want to point out that there is a significant difference between a business with an A+ rating compared to a BBB Accredited business with an A+ rating. A business can obtain an A+ rating just by being in business for enough years without too many unresolved complaints. A business can never become accredited without going through a vetting process that can be rigorous. It is true there is an annual fee of a few hundred dollars to maintain accreditation but that is understandable considering the physical work involved in vetting the business. I also know that paying for accrediting doesn’t improve your rating. A business with an A rating just becomes a BBB Accredited business with that same A rating. So the notion that anyone can pay for a great BBB rating just isn’t true. It is also true that many companies obtain their non-accredited A+ rating without ever paying the BBB a dime.

    I took a few minutes to visit the BBB profiles of some businesses I know for a fact are currently dealing with regulatory action. All of the ones I checked are currently rated F. At the top of their profiles, they have alerts written in red followed by a summary of the allegations against the company. For some, the BBB had even added the government’s press release to the alert. The alerts were all worded similar to this one:

    Government Action: BBB reports on known government actions involving business’ marketplace conduct::
    FTC Civil Enforcement Action

    I want to make it clear that I am not saying the BBB is the best resource for consumers to find a business they can trust. I do believe it is still as unbiased as any other resource available today. If you don’t believe me file a complaint against a company and watch them leap into action to resolve that complaint. It is rare that a business disregards a BBB complaint made against it because it views the BBB as insignificant to its reputation.

    Unfortunately, people have found ways to artificially boost their credibility by manipulating every resource out there. Online reviews can easily be added by friends, or family, or be written by company employees themselves. Most trade organizations that advertise themselves as a resource for the consumers are just pay-to-play groups that require very little accountability and do not demand the industry players regulate themselves. Sadly even those holding a professional license often cannot be trusted by consumers anymore. The same thing can be said for many websites that promote themselves as reliable resources for the consumer. Many of those websites are actually owned by debt relief companies or at least generating leads for them.

    Of the resources currently out there, I believe the Organization of Compliant Credit Account Managers (occamalliance.org) is the one who truly has the consumers’ best interest at heart.


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