What Is the Better Business Bureau and Should You Use It?

The tens of millions of U.S. consumers have relatively few resources when it comes to safeguarding their money and time. One place people turn to report their interactions with companies is the Better Business Bureau (BBB).

But what exactly is the Better Business Bureau and how can it help you specifically? In this article, I’ll tell you everything you need to know about the Better Business Bureau. I’ll also share some thoughts from money expert Clark Howard on the organization.

What Is the Better Business Bureau?

The Better Business Bureau is a private, nonprofit membership organization that provides free help to consumers who seek to resolve issues with businesses and charities they patronize.

According to its website, the Better Business Bureau has been in operation since 1912. They define their mission as helping people find a community of trustworthy businesses and setting standards for marketplace trust.

Some helpful features that consumers will find on the BBB’s website include:

• Customer Reviews, where you can see how consumers feel about certain businesses.
• Business Complaints, which show you the different problems that customers have had with companies.
• BBB Scam Tracker, which lets consumers report scams.

How Does the BBB Rate Businesses?

The BBB utilizes a ratings and accreditation system that consumers often use to judge how ethical a business is and how it handles complaints. Here’s a breakdown of the organization’s business vetting process:

• Ratings: The BBB provides a letter grade rating (from A to F) for each business it lists. The rating is “BBB’s opinion of the business based on how it responds to customer complaints,” its website says.
• Accreditation: Companies that are accredited by the BBB will have a blue seal with a checkmark inside of it next to their profile on BBB.org, which means “enhanced credibility,” its website says. For a business to get accreditation, it must have at least a B rating with the BBB.

Can You Trust the Better Business Bureau?

While there’s no cost for consumers to take advantage of the BBB’s services, the organization does collect dues from member companies and charities. This begs the big question: Can you trust the BBB and its rating system?

Clark says while the rating system is good in concept, there are limits to its effectiveness.

“As far as checking out a company on BBB, just because they have an OK rating, it doesn’t mean that they’re safe,” he says. “A good rating does not clear a company but a bad rating is really troublesome because their bar is really low.”

The BBB is not above reproach by any means. Some consumer watchdogs say that it is unethical for an organization that accepts money from its members to objectively rate them.

In 2010, William Mitchell, the CEO of the Los Angeles chapter of the BBB resigned in the wake of a pay-for-play scandal in which local businesses — including some fake ones created by critics — received good ratings after paying for membership.

Mitchell’s innovation of using letter grades to rate businesses was eventually rolled out to BBBs nationwide before his scheme unraveled.

In recent years, the Better Business Bureau has righted the ship as far as corrupt chapters and wayward affiliates. So while it has its drawbacks, Clark wants you to use the Better Business Bureau by taking advantage of the free consumer services it provides like helping to check out a company’s reputation and putting a complaint on record.

How To Check a Company With the Better Business Bureau

To check a company’s reputation and reliability with the Better Business Bureau, you can use the organization’s website, BBB.org or call a regional office near you.

To find a regional office, all you need to do is input your city at bbb.org/bbb-directory and a local BBB office and phone number will pop up.

To check a company online, go to BBB.org/search and search for the business by name. Make sure you spell it correctly and be aware that the business may be listed under its parent company.

Once you find the business’s profile, some things you’ll want to pay attention to are:

• Whether it has a BBB Seal of Accreditation
• Its grade letter rating
• Customer reviews
• Customer complaints

Clark says consumers shouldn’t put too much stock in a company’s positive rating on BBB.org, “but if they have a bad rating, that’s a clear warning to stay away.”

How To File a Complaint With the Better Business Bureau

To file a complaint with the Better Business Bureau, you’ll start the process at bbb.org/file-a-complaint/search.

There, you’ll fill in the company’s name and location and you’ll answer a series of questions, including whether the complaint involves discrimination or a civil rights issue.

• Provide your name, email address, mailing address and phone number.
• You’ll be asked whether the complaint took place within or outside of 12 months and if involves a health issue.
• Type inside a box to provide a summary of your complaint.
• You can also upload any supporting documents like pictures, contracts or receipts if you wish.
• Answer if you are a business attempting to collect money from another business.

Before you submit, you’ll have to check boxes that say you have read the complaint submission terms, you authorize the business to communicate with the Better Business Bureau and that you consent to the “collection, use and disclosure” of your personal information under the BBB’s privacy policy.

“I find that one of the best reasons for filing a complaint with BBB.org is that so many big companies use outside call centers,” Clark says. “And when you file a complaint on BBB.org you end up with somebody inside the company viewing whatever is wrong.”

Some may argue that the Better Business Bureau’s accrediting system does have “teeth” because the organization can’t shut any businesses down. The BBB also doesn’t get involved in legal disputes involving businesses.

What Happens Next?

When you report a wayward company’s business dealings, here’s what happens, according to BBB’s website: “Everything you submit will be forwarded to the business within two business days.”

The organization tries to get a resolution within 30 business days.

And what’s at stake for a business? That coveted blue checkmark, a visible sign of accreditation.

Alternatives to the Better Business Bureau

While they may not have all the features that the Better Business Bureau offers, there are many alternatives to the organization when it comes to reading up on a company’s behavior toward customers.

Here are some Better Business Bureau alternatives that can help consumers gauge the quality of a business:

• Angi (Read our review: 4 Things To Know About Angi)
• Trustpilot (Read our review: Is Trustpilot Legit?)
• Yelp

Of course, one of the most effective ways to find businesses that are likely to make you happy is to talk to friends, family and others you trust about own their experiences.

Another resource for consumers looking for help with money questions and advice is Clark’s Consumer Action Center, a free community resource that Clark founded in 1993.

Call 636-49C-LARK (636-492-5275) and a member of Team Clark will assist you as soon as possible.

Final Thoughts

While the Better Business Bureau is not a governmental agency, its power comes from its self-established rating system that has the potential to affect the success of a company in one way or the other.

Clark says the best way to use the Better Business Bureau rating system is to let it help you eliminate companies you don’t want to do business with.

“Here’s my rule of thumb for using BBB ratings,” he says. “If a business has a significant number of unresolved complaints, you should use that information to eliminate them from your shortlist of companies you want to do business with. But if there are no complaints, that doesn’t necessarily mean a company is OK. Use the BBB to veto an organization, not as a way to approve using them.”