Should you trust Better Business Bureau ratings?

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Should you trust Better Business Bureau ratings?
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If you ever have a bad experience with a business or feel cheated by a company in some way, a popular recourse is to report them to the Better Business Bureau.

On BBB.org, the Better Business Bureau website, the organization outlines its vision as providing “An ethical marketplace where buyers and sellers trust each other.”

Can you trust the Better Business Bureau?

But how does the Better Business Bureau exert any power over a business? And how do you know you can trust the Better Business Bureau and its rating system?

For one thing, relatively few people know that this private, nonprofit entity is not a government agency.

That being said, BBB does provide some helpful info for frustrated consumers.

Customers can find a number of helpful links on the BBB website.

Some online resources at the BBB include:

What Clark has to say about the Better Business Bureau

Money expert Clark Howard says that the organization’s website can get results.

“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,” he says. “And when you file a complaint on BBB.org you end up with somebody inside the company viewing whatever is wrong.”

The Better Business Bureau’s power comes from its self-established (and controversial) rating system that can affect the success of a companies one way or the other.

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By rating businesses as “accredited,” the BBB ratings system sets marketplace standards that companies aspire to adhere to with honest advertising, operating in good faith and overall positive customer experiences.

How does the BBB resolve disputes?

When you report a wayward company’s business dealings to the BBB, 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 torch, a visible sign of accreditation.

Businesses pay an annual fee to display the BBB icon and associated plaques. That icon cost anywhere from a few hundred dollars to up to $10,000 for large companies.

Due in part to this business model, the BBB has gotten itself into some big trouble through the years.

The BBB: Not above controversy

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 2011, 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.

BBB: Trust or bust?

Clark says consumers should be duly cautious about BBB ratings. Here’s why:

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“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.”

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

While some may argue that the BBB’s accrediting system does in fact have “teeth,” the organization can’t shut any businesses down. The BBB also doesn’t get involved in legal disputes involving businesses.

Here are some BBB alternatives

In today’s digital world, there are several online resources consumers can turn to for objective/real-world experiences with products and services.

Better Business Bureau alternatives that can help consumers gauge the quality of a business include:

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 other people you trust about own their experiences.

Sometimes word-of-mouth really is the best advertising.

Need advice about an issue your having with a business? Call the Clark’s Consumer Action Center at 404-892-8227.

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