How Better Business Bureaus Work

­­Better Business Bureaus (BBBs) insist that their value depends on their neutrality and fairness to all parties. There are some critics of BBBs, however, who claim that it's impossible for BBBs to remain neutral since they're financially supported by BBB-accredited businesses. Skeptics question whether BBBs can serve consumers and nonaccredited businesses equally and ask, "Isn't the very idea of being membership-supported a conflict of interest?"

Smart Money magazine ran an exposé of the U.S. Council of Better Business Bureaus in which it details the private organization's "too cozy" relationship with some of the businesses it claims to monitor. According to the article, the 112 U.S. BBBs collected $131 million in dues in 2007, comprising 90 percent of their total revenue [source: Parmar]. Perhaps more surprising is that 90 percent of BBB board members are corporate executives from industries that generate large numbers of BBB complaints [source: Garrett].

These board members and other corporate partners have voting rights on BBB programs. They sponsor awards shows recognizing what they call "advanced marketplace trust" in big-name companies like Kraft Foods -- a corporate sponsor -- and eBay -- an accredited business [source: Parmar]. What's more, the BBB recently published a book about how to start your own eBay business [source: Council of Better Business Bureaus].

The Smart Money article uncovered another interesting fact that has been hidden from consumers. Corporations like Verizon Wireless and Cingular pay the BBB upward of $50,000 for access to customized consumer complaint information [source: Parmar]. The article cited a California consumer who was befuddled by the extremely detailed and thorough questions on the complaint form regarding her cell phone service. Verizon and Cingular pay the BBB to include extra questions so they can collect detailed customer-satisfaction reports.

Some business owners who have chosen not to apply for BBB accreditation claim that BBB reliability reports are biased toward accredited businesses. According to a study by a Marquette University marketing professor, also mentioned in the Smart Money article, BBBs reported that twice as many accredited auto dealers and three times as many accredited movers made a "good faith effort" to resolve complaints than their non-accredited colleagues [source: Parmar]. The BBB's response is that companies who apply for BBB accreditation simply aspire to higher standards.

Another standard complaint with Better Business Bureaus is that complaints are sometimes closed even when the consumer is greatly dissatisfied with the company's response. If the bureau decides that the company has made a reasonable effort to resolve the complaint -- something as simple as sending the unhappy customer a gift certificate -- then the matter is closed, even if the consumer wants to keep fighting [source: Parmar].

What's more, the very nature of the work of Better Business Bureaus -- monitoring the ethical business practices of 3 million organizations -- makes businesses easy targets for disgruntled customers. Sites like RipoffReport.com include hundreds of testimonials from consumers and business owners concerning the allegedly unfair treatment they received at the hands of BBB employees or representatives. Some consumers claim that the BBB is too slow to post information on companies that are under criminal investigation. Some business owners claim that the BBB doesn't spend as much time investigating complaints against non-accredited business. The list goes on.

And what you may not know is that disgruntled consumers can't complain to the BBB about the BBB. The Better Business Bureau isn't a member of the Better Business Bureau.

For lots more information about the power struggle between consumers and businesses, follow the great links below.

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