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Can a scam be a Better Business Bureau member?

Expose or warn others about scams and scammers, or shady business practices. Expose those that have cheated you or ripped you off. Caution: Before naming specific individuals or groups, make sure that they really wronged you and that there was no misunderstanding. Otherwise your post may constitute slander or libel if it contains false information.

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Can a scam be a Better Business Bureau member?

Postby Winston » Thu Dec 11, 2008 7:14 pm

Does it mean anything if a company has a Better Business Bureau plaque to prove that they are a member? Doesn't the BBB simply accept anyone who pays the fee, even if they are a scam? I've seen some shady businesses with BBB plaques, so doesn't that cast doubt on the BBB's reputation?

Also, isn't it kind of deceptive to use the word "bureau" since it makes it sound like a government agency when in fact the BBB is a private organization?
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Postby sephardic-male » Fri Jan 23, 2009 9:39 pm

the BBB is a racket and a scam. a better watchdog group is rip of report unlike the BBB they show complaints against companies and do more to expose scams and frauds

http://www.ripoffreport.com/


http://www.ripoffreport.com/reports/0/0 ... 001343.htm



BETTER BUSINESS BUREAUS ARE A BUST


BETTER BUSINESS BUREAUS ARE A BUST
by Leslie M, Marable

You need to find a reputable moving company fast. Or maybe the car muffler you just had installed went, south while you were headed north and when you dialed the repair shop where you got it, a recording said 'You have reached a number that has been disconnected.' Instinctively, your next call is to the Better Business Bureau. Nobody, except maybe your own mother, is more likely to have your best interests at heart, right? After all, when pollster Roper Starch recently asked 2,000 adults where they would seek help if they had a problem with a major purchase, the No.1 choice (40%) was the BBB. Partly because of that trust, more than 11 million consumers turned to the nation's 138 BBBs in 1994 to file complaints or seek information, according to the 25-year-old Council of Better Business Bureaus (CBBB, the parent organization in Arlington, VA.

But hold the phone. A four-month MONEY investigation reveals that far from being a protector of the nation's consumers, the CBBB and the local bureaus are guilty of behavior that we feel deserves an unsatisfactory rating. To determine how well the BBB serves its customers. MONEY reporters checked out bureaus in the country's 20 largest metropolitan areas (to see how they stacked up, see the table on page 108) Posing as conscientious consumers, the reporters asked for information on five types of companies that get among the highest number of inquires and complaints, according to the CBBB: home improvement firms, car dealers, auto repair shops, movers and home furnishings retailers. In the course of inquiring about scores of companies across the country, we discovered that many of the nation's Better Business Bureaus:

--Employ questionable business practices, such as charging for providing no information, that could prevent them from becoming members in good standing of their own organization.

--Frequently care as much about generating new sources of revenue as about protecting consumers to the point of launching moneymaking 900 phone numbers.

--Provide often outdated information on such a limited number of local companies that you may need to ask about four firms to get comments about one.

--Sometimes fail to give unsatisfactory ratings to companies plagued by a history of serious complaints.

--And lack the clout to motivate unethical companies to shape up even when the evidence is incontrovertible.

To understand why the why the BBBs are far less effective than they are purported to be, you need to understand how they operate. A popular misconceptions that Better Business Bureaus are local government agencies. They're not. They actually began life 83 years ago as citizens' vigilance committees formed to warn the public about shady companies false advertising claims. Today they are private, independently operated, nonprofit corporations designed to protect consumers from bad business practices of all kinds.

Each local bureau has its own CEO and unpaid board of directors, who determine what services will be offered and what dues members are charged--which range from $120 a year to $5,000.00 or more. The BBBs' main product is information: They keep files on all their members and create files for any company that a consumer inquires or complains about. Most BBBs assign ratings of satisfactory or unsatisfactory to most companies on file, based on their record of complaints. But though most bureaus offer formal arbitration and mediation services, BBBs are not enforcement agencies and cannot order an uncooperative company to award a refund or even acknowledge a complaint.

The CBBB makes local bureaus sign written agreements on bureau conduct that lay out guidelines for resolving internal disputes, paying dues and writing company reports. However, all the umbrella group truly controls is how the bureaus use the BBB trademark name, which it owns. The CBBB's lack of clout leaves local BBBs free to operate like fiefdoms, doing pretty much what they want with little oversight. One objective of James Bast, the 59-year old formal CEO of Presstek, a printing equipment supplier, who took over as chief executive officer CBBB in June 1994, is to address 'problems within the bureau system.' In particular, he wants to standardize the way bureaus collect and report date, by upgrading their computer systems.

The umbrella CBBB, which is perhaps best known as an effective watchdog of the nation's charities, is largely supported by its 350 national blue-chip members, such as AT&T and Xerox. These companies pay dues of as much as $80,000 a year to support the CBBB's promotion of ethical business practices.' For instance, the CBBB monitors national advertising and alerts consumers to misleading claims. Some 240,000 companies pay their local BBB annual dues and the local chapter in turn pays dues to the CBBB.

In all, the CBBB collects substantial revenue--more than $13.6 million last year. some $3 million comes from the local BBBs and national business members. The remaining $10.6 million flows from fees for educational brochures books, sales training and mediation services. Its costliest program a free arbitration service known as BBB Autoline (annual cost: $8.4 million) for drivers stuck with lemons, is financed primarily by General Motors.

Where does all that tax-exempt money go? In 1994: 9% went to pay salaries, pensions and insurance for the top 11 officials ($1.3 million), office rent ($700,000) and travel ($660,000). CEO Bast, who officially took over in June of 1994, was actually put on the payroll in April and got $151,000 for the year. The outgoing CEO, James McIIhenny, 67, who formally retired in October after seven years, cleaned up too, earning $175,000 for six months' work as CEO and four months as a 'consultant.' Those salaries are substantially higher than the $114,814 that CEOs at comparable non-profit earn, according to Abbott Langer & Associates, publisher of industry compensation surveys in Crete, Ill. Bast responds that he and other officers 'are reasonably compensated' for the work they do.

To take a close look at how the CBBB and the local bureaus operate, we randomly picked companies in the five critical industries mentioned earlier from telephone books, then called the BBB several times, asking for information on those companies. We made calls until we received a report on a company from each category. We collected a total of 100 company reports and then interviewed executives at 69 of the profiled firms.

Here's what we learned:
FOR THE PAST TWO YEARS, 12 BUREAUS HAVE BEEN USING 900 TOLL NUMBERS AND CHARGING FEES FOR THE KIND OF INFORMATION THAT THEY USED TO PROVIDE FREE.
Worse, some callers get charged even when bureaus don't have information on the company they are inquiring about. As part of an experiment that ended in mid-September, 12 bureaus (Buffalo, Miami and Syracuse, in addition to those listed in our table) have been accepting consumer inquires and complaints on 24-hour 900 lines (95 cents a minute) or by billing a major credit card (typically $3.80 for three inquires). In July, a CBBB committee overseeing the program recommended that it be continued, and that all local bureaus be given the option of charging fees for services. Until a final decision is reached by the national board, the bureaus who participated in the experiment will continue charging fees.

Although not illegal or even unethical, these new fund-raising tactics have upset some consumer advocates for a couple of reasons. Clark Howard, a respected radio talk show host in Atlanta is one who questions why BBBs would resort to 900 numbers, the very money-making tactic often employed by rip-off artists. 'Can you imagine what it's like to complain to the BBB on a 900 number about a 900 number scam?' he asks. 'And to have a pay for that call?' CBBB spokesman Holly Cherico says consumers aren't getting rooked. 'It's wrong to imply that every 900 number is a scam,' she says. 'More an more reputable companies, like Microsoft and Dow Jones, have them. I think it's the marketing trend of the future.'

Perhaps even more troubling: Though the fee-for-service policy is to refund your money for a call if no information is available, five offices we tested charged MONEY reporters for their calls even when they couldn't provide reports on the companies we mentioned. Says Gene DeSantis, a consumer law instructor at Syracuse University: 'To charge a fee for a service when there's no information available borders on deceptive telemarketing practices.'

Cherico says that if you phone a fee-charging BBB, the operator is supposed to offer a refund to your account if there's no information. If the operator doesn't offer to do this, she says you should ask for it. BBBs have the ability to zero out charges before they are billed to your credit card or phone company. If you've already hung up or got a tape instead of an operator, get in touch with the CBBB or call your local phone company for a credit.

MOST BBBs HAVE INFORMATION ON FILE FOR JUST ONE IN FOUR LOCAL COMPANIES.
In the worst case, out Los Angeles correspondent was forced to name 13 home improvements companies, eight auto repair shops and six home furnishing stores before finding one in each category that the local BBB had any information about. The effort cost him $13.3 in phone bills.

Why the dearth of information? Partly because so few businesses are BBB members. Atlanta is typical, with about 26% membership. According to owners of 19 companies we canvassed, more firms don't belong to the BBB because they believe the dues are exorbitant, the membership drives are pushy or the services they receive in return are of little value. Says Robert Murata, president of the Honda Clinic, an auto repair shop in Chicago, who canceled his BBB membership last May: 'If I felt the money would do me or the consumer any good, I would have renewed.'

You'll find a BBB file for a nonmember company only if another consumer has called or written in with an inquiry or complaint. So if a BBB staffer tells you he has no record of complaints against a particular company, you should not assume that company is reputable. It may just be that it's not a BBB member or that no one has yet called the bureau to check it out or denounce it.

BBB OPERATORS ARE SOMETIMES UNCOOPERATIVE, AND MOST BBB COMPANY REPORTS AREN'T WORTH THE 32 cent POSTAGE STAMP THEY'RE MAILED WITH.
In 13 of 100 cases, operators were misinformed about bureau policy, and therefore refused to mail reports to our testers even though the bureau's stated policy called for them to do it. The Philadelphia and Pittsburgh bureaus fumbled the most, with different operators within the same bureaus contradicting one another about their policy on providing reports. At both bureaus we were told by some operators that we couldn't get any reports in the mail, while other operators told us we could (The latter answer was correct.)

The reports we did receive from most BBB's were usually brief--just one page--and of minimal value. A full 80% gave little more than basic information such as a company's address, its BBB membership status and a rating--that is satisfactory or unsatisfactory. In some cases--for example, if a company hasn't yet responded to a complaint--the BBB refrains from assigning any rating. The ratings, based on the number of complaints a company has received and how it responds, are vague at best. At worst, they are dubious.

For instance, a report we got from the Detroit BBB gave a satisfactory rating to Gardner White furniture, a home furnishings retailer. A call by MONEY to the Michigan attorney general's office, however, revealed that the company had received 19 complaints from 1992 to 1994, most of them reporting its alleged misleading sales tactics. Carmel Weems, Detroit's BBB spokesman, admits the company isn't fault-free. 'We've had 64 complaints within the past three years against this company' she says. 'But they received a satisfactory rating because they responded well to each complaint.'

There are notable exceptions among BBBs, however. The reports of the Boston and New York City outfits are standouts, for example. Boston's reports list a company's return and exchange policy, customer service contact and the addresses of branch offices. The New York BBB breaks out the number of complaints for each of the past three years, plus tells you the nature and status of complaints a company received. Reports from both bureaus also list contractors' state licensing agencies whether the company meets state minimum proficiency standards. In addition, Boston and New York refer callers to appropriate regulatory agencies for help in resolving problems.

BBBs LACK CLOUT.
Several of the company owners we spoke with admitted that they pay much more attention to a consumer complaint filed with the state attorney general's office than with one reported to the BBB. The reason: The BBB has no enforcement powers and can't take legal action on a consumer's behalf. Says Honda clinic's Robert Murata: 'Most businesses don't look at the BBB as being a big threat. The state attorney general's office--now they're a big threat.' In short, BBBs are a bust.
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Postby Winston » Tue Jan 27, 2009 6:30 am

Thanks for that report, but all those deep technicalities aren't necessary. The bottom line is that if a scam can be a member of a BBB, then being a BBB member isn't anything to brag about and doesn't testify to one's integrity. So what's the point of being a BBB member?

How come Dateline NBC or 20/20 doesn't do a story exposing the BBB?
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