Better Business Bureau

Source

Any of several U.S., Puerto Rican, and Canadian organizations formed to protect communities from unfair, misleading, or fraudulent advertising and selling practices. Organized at the local level, Better Business Bureaus investigate and set standards for business practices, receive complaints of improper practices, and conduct educational campaigns alerting the public to methods of deceit and fraud in advertising and selling.

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Organization that works to protect consumers against fraudulent and deceptive business practices, including those used in advertising and sales, by answering and investigating consumer complaints. It was established in 1916 as an outgrowth of the early vigilance committees of a national association later called the american advertising federation. The agency operates as a system of local offices, financed by the local business community, and of national offices, funded by dues from more than 100,000 member companies. Membership is composed of business interests in a community, such as retailers, manufacturers, advertising agencies, and media representatives. The Better Business Bureau is a major influence on truth and accuracy in advertising. Its parent organization, the Council of Better Business Bureaus, Inc., functions to help new industries develop standards for ethical and responsible advertising and also provides information about advertising regulations and recent court decisions and administrative rulings that affect advertising.

Better Business Bureaus (BBBs) are private nonprofit organizations that collect and report information to help consumers make informed decisions when dealing with businesses or charitable organizations. The BBB is not a government or law enforcement agency; it does not have the power to collect money, administer sanctions, or impose other penalties against companies or individuals that engage in poor business practices. But its ability to disseminate a company's operating track record make it a force to be reckoned with. Faced with the prospect of losing customers because of unfavorable BBB rankings, companies have a significant incentive to adhere to proper business practices and address customer complaints. In addition to their information-gathering activities, local BBBs also provide mediation services when disputes arise between customers and businesses, promote ethical business standards, maintain standards for truthful advertising, and share pertinent information (about possible fraudulent activity, etc.) with local and national law enforcement agencies. With the rise of e-commerce in the late 1990s, they have also become involved in efforts to address business fraud on the Internet. BBBs are licensed by the Council of Better Business Bureaus (CBBB) and governed by their own local boards of directors.

The most widely-used service of the Better Business Bureau is its inquiry and information service, which features information that is updated on a daily basis. In fact, the BBB receives as many as 1,000 inquiries a day from consumers and businesses seeking reports on firms. These reliability reports are limited to marketplace practices; they do not provide information on either individual or business credit information. BBB reliability reports contain information about the nature of the business, its principal officers, a three-year summary of any complaints processed, and any government action involving the company's marketplace practices. Most Bureaus also note BBB membership (if any) in its public report and indicate whether the firm in question participates in any special BBB programs to improve customer satisfaction. In addition, the BBB issues reports on products, services, and general business topics to promote educated comparison shopping by consumers and businesses alike. These reports are available on the Better Business Bureau web site, which also provides businesses and consumers with the ability to file complaints.

Many small businesses and consumers also utilize the BBB's arbitration program. This system was instituted in 1973 as a way to help businesses and customers avoid litigation. "[It] uses trained volunteer arbitrators from the community," noted Business First-Columbus. "[They] perform their duties as a public service, the arbitration process is provided at no cost to the consumer and, in most instances, at no cost to the business. Depending on the dollar amount in dispute, the arbitration is either conducted by a single arbitrator or by a panel of three. The arbitrators' decisions are rendered within 10 days after the close of the hearing, and most cases are completed within 45 days after the process has been chosen by the parties." According to the Better Business Bureau, its arbitration service, combined with its inquiry and information service, had a part in an estimated $2 billion of economic activity in the United States in 1999.

Bbb Membership

Each Better Business Bureau is independently supported by businesses that operate within their designated service area. BBBs receive their operating funds from the membership dues that are paid by business and professional groups in those service areas. Companies that become members of their local Better Business Bureau receive several benefits in return. These usually include: 1) membership identification on the company's place of business; 2) access to all BBB publications, programs, and services; 3) right to participate in BBB training programs in such areas as arbitration, customer service, and mediation;4) affiliation with other member businesses.

But the BBB maintains certain standards for membership to ensure that the organization's integrity remains unquestioned. Companies with bad track records are not accepted, and companies that do become members have to adhere to certain rules. For example, BBB members must respond to consumer complaints presented by the BBB; if they do not do so, they lose their membership. In addition, it should be noted that the BBB attaches a number of conditions to ensure that companies do not join simply for the purpose of trumpeting their membership. BBBs do not endorse or recommend businesses or what they sell. Moreover, they do not allow members to advertise their membership, because the public could conceivably reach the erroneous conclusion that such advertising means that the BBB is endorsing the member's business. In addition, BBB membership dues are not tax deductible for federal income tax purposes, though they may be tax deductible as an ordinary and necessary business expense. Finally, the CBBB has noted that membership does not confer any advantages when complaints arise: "The BBB's integrity is on the line every time we review and process a complaint. If a Bureau were to favor members over non-members in a complaint, such action would destroy our most valuable asset—the public trust that we have held for over 80 years."

In addition, a branch of the Council of Better Business Bureaus known as the Philanthropic Advisory Service maintains information on various charitable organizations. These reports, which are maintained by the national Council but updated by local BBBs, cover all sorts of charitable and other nonprofit organizations. Information typically included in these reports includes the group's background, its current programs (if any), the structure of its governing body, its tax-exempt status, its fund raising practices, its financial standing, and notification as to whether the organization complies with the CBBB's "Standards for Charitable Solicitations."

These reliability reports can be invaluable to both individual and business customers who want to make sure that they are conducting business with an ethical company. The BBB cautions, however, that it does not maintain reports on every business operating in a given area. The reasons for this vary. In some cases, the business is relatively new. In other instances, the company may simply operate in such a manner that customers see no reason to file a complaint.

Further Reading:

"BBB Dispute Resolution: Common-Sense Alternative." Business First-Columbus. October 22, 1999.

"BBB History and Traditions." Better Business Bureau Consumer Information Series, n.d.

"Before You Buy: BBB Offers Inquiry, Information Services." Business First-Columbus. October 22, 1999.

Cohen, Alan. "Meet the Watchdogs." PC Magazine. December 14, 1999.

"Dissatisfied Consumers Who Complain to the Better Business Bureau." Journal of Consumer Marketing. September-October 1999.

"Frequently Asked Questions About the Better Business Bureau." Better Business Bureau Consumer Information Series, n.d.

"What is a Better Business Bureau." Better Business Bureau Consumer Information Series, n.d.

This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (August 2008)

Better Business Bureau
Founded	1912
Area served	United States Canada
Focus	Consumer Protection
Website	www.bbb.org

Contrary to popular belief, the Better Business Bureau (BBB), founded in 1912, is not a governmental organization. Rather, it is a corporation consisting of several private business franchises of local BBB organizations based in the United States and Canada, which work together through the Council of Better Business Bureaus (CBBB). The BBB goal is to foster a fair and effective marketplace, so that buyers and sellers can trust each other ("Start With Trust"). Many BBB services can be accessed online through their website.

BBBs gather and report information on business reliability, alert the public to frauds against consumers and businesses, provide information on ethical business practices, and act as mutually trusted intermediaries between consumers and businesses to resolve disputes. News media frequently turn to the CBBB and local BBBs as expert sources of news about scams and consumer issues.

Contents 1 History 2 Structure 3 Core services 3.1 Business reliability 3.2 Dispute resolution procedures 3.3 Truth in advertising 3.4 Wise Giving Alliance 3.5 Website resources 4 Criticisms 4.1 Criticism on Biased Rating System 4.2 Criticism on case resolutions 4.3 Membership Privileges:Use of Accreditation term 5 References 6 External links

History

"Medical quackery and the promotions of nostrums and worthless drugs were among the most prominent abuses which led to the establishment of formal self-regulation in business and, in turn, to the creation of the NBBB."^[1]

BBB's inception has been credited to the court cases, such as United States v. Forty Barrels and Twenty Kegs of Coca-Cola, initiated by the government against a number of firms, including the Coca-Cola Company, in 1906 after the Pure Food and Drug Act had become law. Samuel Candler Dobbs, sales manager of Coca-Cola and later its president, took up the cause of truth in advertising.

In 1909, Dobbs became president of the Associated Advertising Clubs of America, now the American Advertising Federation (AAF), and began to make speeches on the subject. In 1911, he was involved in the adoption of the "Ten Commandments of Advertising", one of the first codes of advertising developed by groups of advertising firms and individual businesses. Similar organizations in succeeding decades, such as the National Better Business Commission, Inc. of the Associated Advertising Clubs of the World (1921), and the National Association of Better Business Bureaus, Inc. (1933) merged to become the Association of Better Business Bureaus, Inc in 1946. In 1970, the Council of Better Business Bureaus (CBBB) was established.

Structure

Local BBBs are independently governed by their own boards of directors, but must meet international BBB requirements, which are monitored and enforced by the CBBB on a continuous basis. The CBBB is governed by leaders of local BBBs, as well as by senior executives from major American corporations, and community leaders such as academics and legal experts.

Each BBB entity is run separately. Businesses that move from one BBB jurisdiction to another may need to apply for BBB Accreditation in the new BBB location unless they have a system-wide accreditation.

Core services

BBB core services include:

• Business Reliability Reports
• Fraud Prevention
• Complaints and Dispute Resolution
• Truth-in-Advertising
• Consumer and Business Education
• Wise Giving Charity Reports
• Charity Accountability and Effectiveness Education

Business reliability

Companies that are invited to join the BBB as Accredited Businesses must meet the BBB Standards for Trust^[2] and maintain all requirements of BBB Accreditation, including payment of annual dues. Businesses that agree to the BBB dispute resolution procedures may identify themselves as Accredited. If Accredited Businesses fail to meet the BBB's Standards, their accreditation is revoked.

BBB Accredited Businesses make a commitment to conduct their business affairs with reliability and integrity, in accordance with BBB Standards and guidelines, and pay the BBB an annual tribute. Some argue that receiving payments from the businesses they report on creates a significant conflict of interest.

The Better Business Bureau name and torch logo can be used by accredited businesses. The logo use by accredited business is only allowed on printed material; to use the logo on a website the business needs to join the BBOnline Accredited Business Seal program.

Dispute resolution procedures

The organization's dispute resolution procedures are established by the Council of the Better Business Bureaus, and implemented by local BBBs. Usually, disputes can be resolved through mediation; when appropriate, low or no-cost arbitration may also be offered and provided through the BBB. The BBB acts as a neutral party when providing dispute resolution services.

Complaints about the practice of professions like medicine, law and accounting are usually not handled by the BBB and are referred to associations regulating those professions.

Truth in advertising

The National Advertising Division of the CBBB (NAD) reviews national advertising for truthfulness and accuracy, and fosters public confidence in advertising accuracy. Its policies and procedures are established by the National Advertising Review Council (NARC). The Children's Advertising Review Unit (CARU) of this BBB entity reviews advertising directed to children. The BBB also administers the Children's Food and Beverage Advertising Initiative, a voluntary self-regulation program undertaken in cooperation with major corporations. This initiative is designed to shift the mix of advertising messaging to children to encourage healthier dietary choices and healthy lifestyles.

Wise Giving Alliance

The BBB's Wise Giving Alliance reviews and reports on national charities, using the 20 BBB Wise Giving Alliance Standards for Charity Accountability. Detailed national charity reports may be found on the BBB website. Many local BBBs also review charities in their regions and publish detailed charity reports on their local websites.

Website resources

BBB websites offer video content, online resources, and educational tools for consumers. Each local BBB offers a unique assortment of educational resources, tailored to meet the needs of its community. The organization also has BBB channel on YouTube, news alerts featured on individual BBB websites, and BBB videos.

Criticisms

Many BBB offices attempt to pass themselves off as government agencies when soliciting businesses to sign up as members. This seems to be central to their marketing.

The BBB does not recommend specific businesses to consumers, but simply supplies information.^[2] Regarding how a group funded by businesses can be fair to consumers, the bureau's website states that its value to businesses depends on its neutrality.^[3]

BBBs have been accused of unduly protecting companies.^[4] The BBB responds by, at a minimum, notating complaints on the "Reliability Report" section of its web sites.^[5] If a branch does not act reasonably on behalf of a consumer, a complaint may be filed with the Federal Trade Commission.

Criticism on Biased Rating System

On June 1, 2009, BBB offices nationwide adopted an A-F ratings system.^[6] This grading system has been criticised for being biased,^[7] and has led to specific BBB investigation sites. The BBB of Central Illinois states on their website that only businesses which pay dues are eligible for an A+ rating. This seems to call into question the supposed neutrality of the BBB.^[8]

Criticism on case resolutions

It has been reported that the BBB encourages and solicits money from the very businesses they have been monitoring. This has not been beneficial to the customer as expected it to be.^[9]

Membership Privileges:Use of Accreditation term

Instead of pronouncing a firm "satisfactory" or "unsatisfactory" in its reliability reports, the bureau is now issuing a new label, "accredited," that any business can obtain by becoming a BBB member. Council CEO Steven Cole says the business will still have to meet certain standards, but a number of chapter presidents expressed concern that disturbed companies could use the label to hide problems.^[10]

References

1. ^ Ladimer, Irving "The Health Advertising Program of the National Better Business Bureau" A.J.P.H. Vol. 55, No. 8. Aug. 1965
2. ^ ^{a b} "BBB: Standards of Trust". BBB. http://us.bbb.org/WWWRoot/SitePage.aspx?site=113&id=cb5bd362-15fb-4d74-82e6-85de604c7982. Retrieved 2009-02-03. 
3. ^ "The Better Business Bureau FAQs and Information – U.S. BBB". BBB. http://www.bbb.org/us/bbb-faqs/#faq1. Retrieved 2009-06-10. 
4. ^ http://www.ripoffreport.com/reports/0/001/ripoff0001343.htm Rip-off Report: Better Business Bureau or Buyer Better Beware? BBB Nationwide Alert! THE FOX GUARDING THE HEN HOUSE]
5. ^ "2005 Annual Report of the Council of Better Business Bureaus". Council of Better Business Bureaus. http://us.bbb.org/WWWRoot/storage/0/Shared%20Documents/2005AnnualReport_web.pdf. Retrieved 2009-01-14. 
6. ^ "New BBB Letter-Grade A+ Through F Ratings System Helps Businesses Evaluate Suppliers, Improve Operations". eNews Park Forest. http://www.enewspf.com/index.php?option=com_content&view=article&id=7686:new-bbb-letter-grade-a-through-f-ratings-system-helps-businesses-evaluate-suppliers-improve-operations-&catid=88888960&Itemid=88889783. 
7. ^ "Better Business Bureau grades companies on a peculiar curve". LA Times. http://articles.latimes.com/2009/jan/21/business/fi-lazarus21. 
8. ^ "Better Business Bureau grades companies on a peculiar curve (page 2)". LA Times. http://articles.latimes.com/2009/jan/21/business/fi-lazarus21?pg=1. Retrieved 2009-06-10. 
9. ^ BBB nation wide alert
10. ^ http://www.smartmoney.com/investing/economy/Investigating-the-Better-Business-Bureau-23879/?page=3 Is the BBB Too Cozy With the Firms It Monitors?

External links

• Better Business Bureau official website
• Site outlining criticisms of the BBB
• Better Business Bureau - A useless institution ?

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