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Is the Better Business Bureau a protection racket? (slate.com)
50 points by japaget on Dec 8, 2010 | hide | past | favorite | 9 comments

It's a cheap way for businesses to avoid litigation and bad publicity. Pay the fee, get a sticker to put on your door or website, and hope that most people think it's a mark of trust or quality. When consumers do complain, get them to vent on an online complaint form, provide some minimal mediation service, and hopefully the consumer won't take it any further.

I followed the complaint process for the southern New England BBB about five years ago for a local car dealership and BBB member (the complaint concerned misleading advertising). I discovered that the complaint was erased from the BBB database for the dealership a few months after the process ended (it was supposed to stay up for three years). I told the BBB about it, they added it back again, but a year later it was again removed.

Makes me wonder that the problem the LATimes identified (accredited businesses having more complaints but higher "grades") might actually be worse than described in the article.

I've gotten a telemarketer call from the BBB here in Southern California recently and it reeked of the worst things Yelp is accused of.

They led off with a yarn about how they had heard from consumers looking for information about my business. Uh huh. Pull the other one...

My sister works for a small company and dealt with the BBB. This article is on par with their experience. Because they were a small company, they decided not to get involved with the BBB. Only then did they realize that if you do not you start out with a bad mark if someone looks up your company. I believe she said a "C-" was given to them by not being a member of the BBB. The only way to resolve this was to become a member. Talk about racketeering.

My wife works for a large company that is in a similar situation. They are not a member of the BBB (thus not accredited) and there is one complaint on the BBB that was filed 3 years ago. This single complaint gives them a D- rating. A newly formed competitor of theirs, less than 2 years old, became a member of the BBB from the get go and is heavily promoting the fact that they have an A+ and the company my wife works for doesn't. The BBB wants approx $16,000 for them to become accredited. Unless they pay, they can't increase their rating to anything decent, even if they work with the BBB to resolve that single complaint from 3 years ago. It's pretty bogus.

i've talked to small business owners about the BBB in the past, just in incidental conversation, and they all used the exact same words to describe it: "protection racket".

I'd say they were similar to the credit ratings agencies* in the obvious conflict of interest in taking payments from the entities whose creditworthiness they "objectively" rate, except a little more willing to give A+ ratings to entities that don't even exist and rebill scammers. They're a non-profit, so there's probably nobody raking in particularly large sums of cash from their shady or sloppy ratings, but it would be daft to rely on them.

*who, if there was any justice in the world, would have become the first casualties of the credit crunch, along with their business model

They're a non-profit, so there's probably nobody raking in particularly large sums of cash from their shady or sloppy ratings, but it would be daft to rely on them.

Unfortunately, "non-profit" doesn't really rule out financial corruption. And financial corruption isn't necessary for organizations to act this way--the natural tendency of any organization or institution to perpetuate its own existence is probably enough.

The BBB is a hugely profitable enterprise with a huge payroll. I'm not sure they're even classified as a non-profit.

The executives of the BBB make hundreds of thousands a year, according to 20/20: http://www.youtube.com/watch?v=Yo8kfV9kONw

Same with the BCSA (British Computer Software Alliance) they do audits on your software licenses and then offer you 'membership' which includes special priced deals to handle any 'accidental licensing mistakes'

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