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Can You Trust the Better Business Bureau?

The organization's new evaluation system gets a failing grade from many

by: Kate Ashford | from: AARP The Magazine | Jan./Feb 2011 issue

George Grillo swears he isn't a bad contractor. "I could literally give you hundreds of references of jobs that came out beautiful," says Grillo, whose At Home Remodeling in East Hartford, Connecticut, got a failing grade of F from the Better Business Bureau in 2010 for not responding to a customer complaint. Not long after, he folded the company. "I don't want to have a pissing contest with the BBB, because my livelihood really depends on them," he says, " but to put me at an F — it's just wrong, it's infuriating, and it made a huge difference."

The Better Business Bureau — a private, nonprofit group in its 99th year — is the best-known complaint desk and referral service in the United States. Last year consumers turned to the BBB about a million times for help when they felt cheated by a contractor, retailer, or service provider. And folks checked with the BBB 65 million times to see if a company is trustworthy. Over the past two years, though, the BBB has been dealing with a new kind of complaint: that its own practices are slipshod, biased, and deceptive.

Where to complain

Despite his disappointment with the BBB's grading system, consumer advocate George Gombossy of CTWatchdog.com tells everyone who complains to him about a business to contact the BBB, "because if there's a pattern in the complaints, it'll show up." The Federal Trade Commission and your state attorney general's office are also useful venues for venting, and there are plenty more squawk boxes online, including these:

After rating companies as either satisfactory or unsatisfactory for decades, the BBB changed its approach in 2009, instituting a complex point system that results, as in school, in a single grade of A+ through F for each business. Companies that get a B or better — and that pay membership dues of a few hundred to several thousand dollars a year — are "BBB accredited" and can display its torch insignia.

"The goal [of grading] was to provide more information to aid consumers in making purchasing decisions," says Alison Southwick, spokesperson for the Council of Better Business Bureaus, which oversees the 122 chapters in the United States and Canada. "The satisfactory-unsatisfactory way was very black-and-white."

But critics say the BBB isn't equipped to award grades based on its extensive standards: 17 criteria that cover everything from licensing to truth in advertising. "The Better Business Bureau doesn't have the staff to properly evaluate businesses," says George Gombossy, editor and publisher of CTWatchdog.com, a consumer website in Connecticut. "There are 100,000 businesses in Connecticut. I think it's a travesty that they went in this direction."

Critics also say the new system favors BBB-member businesses. Unlike websites such as Angie's List, ConsumerAffairs.com, and Ripoff Report, the BBB doesn't actually publish consumers' complaints. What you'll find in its "reliability reports" on businesses is a summary: mostly tallies of complaints by category and whether they were resolved or merely "administratively closed." This opaque approach makes the grades all the more prominent — and since the BBB rewards members with a half-grade boost (such as from a B+ to an A – ), it has opened the BBB to charges of pressuring businesses to "pay to play."