CINCINNATI - It’s a name consumers trust: the Better Business Bureau. Now, some businesses say that trust is undeserved. They say the BBB’s new grading system is based at least partially on whether a business buys a membership with the Bureau.
An I-Team/ABC News investigation found bogus companies could buy an A+ while companies with one complaint despite hundreds or thousands of customers got “F”s or “D”s.
The owner of one business that got an “F” is incensed. Ron Wood owns a wedding photography studio in downtown Cincinnati. He says he’s shot more than 600 weddings in the last six years. At some point in the last three years one customer complained about a DVD of photos Wood says was never in the wedding contract.
The customer didn’t just complain to Wood. She also complained to the BBB. Wood says he worked with the customer but not the Bureau, to which he doesn’t belong. He didn’t realize that could cost him the worst rating possible. "I think it really stinks. It's unfair that I should have a failing grade” for one complaint.
Wood says who knows how much business he may have lost because of that grade. It’s the same complaint we heard from businesses across the country.
Terri Hartman manages an antique hardware store in Los Angeles. She says up to 100 customers a day shop there. She says, "Your reputation is really all you have." Yet after one customer in the last three years complained, the BBB rated the store a "C". After Hartman bought a membership, her grade went up to an “A+.”
Carmen Telles got the same result when she bought a membership. She’s a professional clown who wasn’t laughing about her original “C-“, also the result of one complaint she says she didn’t know existed.
Another Cincinnati area business that is unhappy with the BBB's ratings system is Bromwell's fireplace shop on Fourth Street, downtown.
Bromwell’s received an "A-" from the BBB, despite having no complaints in the almost-200 years that they have been in business, according to operations manager Todd Glacken. But Glacken said that several local competitors, who have as many as 16 complaints each, have a stellar "A+" rating from the BBB.
One difference: all of the "A+" fireplace shops in Cincinnati are BBB members. Bromwell’s is not a member.
Side-by-side grade comparisons
While Better Business Bureaus across the United States and Canada operate as independent businesses, the complaints the I-Team and ABC have heard are eerily similar.
They began in the past few years as Bureaus began rolling out a new grading system. Instead of "satisfactory" or "unsatisfactory", the new ratings use letter grades from “A” to “F”.
Some side-by-side comparisons raise questions.
Credit card company Visa has 56 complaints and merits an "A+". Its competitor Mastercard has 21 complaints but rates an "F". Visa paid to join the BBB. Mastercard did not.
BBB member University of Phoenix, an online college, gets an “A+” with 228 complaints. Nonmember Stanford University gets a “C” for one complaint.
Member Yahoo gets an “A” with 1,228 complaints. Nonmember Google gets a “D” with 423 complaints.
Critics, including a businessman who calls himself Jimmy Rivers, say, "The grading system is broken. There are grades that make no rhyme or reason. There's good companies with bad grades. There's bad companies with good grades."
Rivers hides his identity. He says he fears retaliation from the BBB, which he says has been trying to find out who he is since he started blogging about the grading system discrepancies.
"There are just a lot of discrepancies in how the grades are done. There's a lot of favoritism on membership versus non-membership," said Rivers.
BBB disputes allegations
Jocile Ehrlich, executive director of Cincinnati’s Bureau, says that’s not true.
"Membership has nothing to do with this," Ehrlich said.
She says businesses get lower grades not as a result of the number of complaints but rather how or whether they respond to the BBB. She says the new ratings are not misleading.
"I think that they are clear, they are an accurate description of the BBB's level of confidence in the integrity of the company in question," added Ehrlich.
Ehrlich says Bureau employees use 17 criteria when evaluating businesses who apply for accreditation, spending hours checking the size and longevity of a business, how it advertises, whether its website is accurate and of course how many complaints it has received and how it dealt with them.
She says side-by-side comparisons aren’t fair because no two businesses are the same.
Ehrlich says because the Bureau has more complete information on businesses that apply for accreditation, those businesses can improve their grades.
"Any organization that goes through an accreditation process pays a fee for that. It takes time and staff to evaluate whether or not a company is eligible for accreditation," said Ehrlich.
That may be true in Cincinnati but it isn’t everywhere. In Los Angeles, someone signed up a fake business called Hamas,
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