SIZING UP THE BETTER BUSINESS BUREAU, AND ITS RIVALS
c.2013 New York Times News Service
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.
Like most people, I saw the century-old institution as a helpful tool for consumers. But then I wrote an article about a slightly dodgy company that many people reported problems with. When I looked it up on the Better Business Bureau website, it had an A-plus rating. And I started wondering.
There are other options out there like Angie’s List and Yelp, to name a few of the better known. Just those three rating services alone give millions of people information about millions of companies every year. Consumers and companies find them very useful on one extreme or worse than useless on the other. But few know how they actually work.
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.
First of all, it’s important to lay out what the Better Business Bureau is and isn’t. It isn’t a government agency and has no enforcement power. And despite often being labeled such, it is not a consumer watchdog organization.
It was started back in 1912 by businesses primarily to correct advertising abuses. It now operates as a nonprofit with more than 4 million businesses in the bureau’s database; only about 400,000 of those are accredited.
Accredited is a term that may confuse consumers. 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.
A business is also listed in the bureau’s database if it asks to be or if a consumer files a complaint.
Local Better Business Bureaus are funded primarily by accreditation fees. The national office receives a portion of those fees and is also funded by corporations through its self-regulatory programs.
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.
Even 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.
In the past several years, the Better Business Bureau has been battered by bad ratings of its own. 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.
(BEGIN OPTIONAL TRIM.)
In 2011, David Segal, who writes The Haggler column for The New York Times, did a series looking at customers’ complaints about the bureau.
Since then, the bureau has made some changes. It used to give an A-plus only to accredited businesses, Hutt said. That is no longer true.
“That was misinterpreted as pay for play,” she said. “Accredited and unaccredited are now judged exactly the same.” She points out that more than 1.2 million businesses in the database have an A-plus rating, and of those, just more than 300,000 are accredited.
In July, the bureau made permanent a pilot program that gives details about the complaints filed; before they were simply put in categories such as “advertising issue” or “problem with a service or product.”
(END OPTIONAL TRIM.)
Earlier this year, after a lengthy and what Hutt called an “exhaustive internal process,” the Los Angeles bureau, one of 113 local chapters in the United States and Canada, was kicked out. A new one is expected to open soon.
The Los Angeles chapter was one of a kind, Hutt said.
“That doesn’t mean everyone is happy with the bureau. On its own blog, frustrated consumers vent: “The BBB is a waste of time. You have done nothing for me and the companies just laugh about the ‘threat’ of the BBB,” writes George Patrin. Similar comments are all over the Web.
On the other hand, Ashley writes that: “I personally have had a great experience with the BBB. After filing a complaint with them I was able to get just under $2,000 back from a company that did not provide their promised services.”
Angie’s List is in some ways the flip side of the bureau. The consumer buys a membership, whose cost varies by location but $29 a year is fairly typical, said Angie Hicks, the founder of the 18-year old company. The list now has some 2 million members, double from two years ago.
A member can peruse the companies and leave a review (a nonmember can also leave a review). Companies are graded on an A to F scale, and the grades are averaged if more than one person reviews them.
The perk for companies that are rated B or higher is that they can buy advertising. This comes in the form of coupons offered to members for discounts on services, Hicks said. And those that advertise are put at the top of default searches, which Consumer Reports said in a September report of ratings services, skews the results.
(BEGIN OPTIONAL TRIM.)
Most users are probably not aware that “70 percent of the company’s revenues comes from advertising purchased by service providers,” said Jeff Blyskal, a senior writer for Consumer Reports, who did the ratings report.
Hicks disagreed. She said that members liked the idea that companies offered discount coupons — and that those companies come up first on search results.
(END OPTIONAL TRIM.)
As with the Better Business Bureau, there are plenty of satisfied and dissatisfied customers who have used Angie’s List. And as an accredited company, it does have an A-plus rating with the Better Business Bureau, with 233 complaints over the past three years, all of them closed.
Another option is Yelp, which compared to the Better Business Bureau and Angie’s List, is either sheer anarchy or refreshingly open. Anyone can look up a company on Yelp or leave a review. (It also has an A-plus rating with the Better Business Bureau, is not accredited and had 1,181 closed complaints over the past three years.)
The Consumers Report review also noted that allowing a company to get in touch with a disgruntled customer and make amends — and the customer can then take down a negative review — “undercuts the integrity and accuracy of the ratings.”
It’s not easy to sort all this out. So some advice from the experts: Don’t rely on any one source, especially if you’re making an expensive investment. Check out specialized websites — for example, PCWorld if you’re looking for a computer. If you have a real problem with a business, go to the local or state agency that licenses the service you’re using.
And don’t drive yourself crazy. Remember that one or two people can really skew the process. Consumers Report looked at one plumbing company in the San Francisco area for its review. Angie’s List gave it a grade of F based on a review by one irate customer. It was an accredited company with the Better Business Bureau, which awarded it an A-plus, with two complaints deemed resolved. And based on 20 reviews, it received a 2.5 out of maximum of 5 on Yelp.