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.

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.