The Broken Business Bureau

Whenever Ed and I are approached by what Catharine ‘Goose” Cody would call a ‘sketchy’ new business prospect, we do one of two things: run a Dun & Bradstreet report on their financial stability and check their rating with the Better Business Bureau (BBB). Well, after viewing an unbelievable ABC 20/20 expose on the scams being perpetrated by the Better Business Bureau, I think we’ll just stick with D&B in the future.


According to 20/20, the BBB routinely assigns a mediocre grade to an otherwise superb business (see examples of Wolfgang Puck and the Ritz Carlton on the video) in order to extort money from them. They’ll only agree to improve the ratings if a business agrees to pay a fee to become an official member of the BBB. Talk about a  shakedown.


There are some jaw-dropping examples of such small businesses as Liz’s Antique Hardware being told by a BBB telemarketer they’ll have a ‘C’ rating improved if they pay $400 to do so. Liz gives the BBB her credit card information and, voila, she gets an A rating.


It gets worse. To prove how disreputable the Better Business Bureau has become, some computer hackers recently paid hundreds of dollars to create accounts for a fictitious ‘skinhead’ organization as well as the notorious terrorist group, Hamas. Because they paid their up-front fees, though, both received A ratings from the BBB! I wonder what grade the BBB would assign to al Qaeda? With bin Laden’s deep pockets, I’d have to believe he’d cop an A +.


To add further insult to injury, the president of the BBB comes across very badly in his televised interview. He’s clearly been media trained, but only up to a point. While he admits fault, he doesn’t suggest any disciplinary action for the offending employees. Nor does he say he will fix whatever’s broken in the BBB system. Nor, does he assure it will never happen again. Comforting, no? If nothing else, the BBB should fire its PR firm.


Since it’s a non-profit organization, Connecticut Attorney General Richard Blumenthal says the Better Business Bureau may have broken several laws. Not only are they forcing businesses large and small to pay for membership (and assigning quality grades based upon payment), but BBB executives are pulling down some serious personal bank as well. The CEO of the Los Angeles office earns a cool $400k annually. That’s nice work if you can get it.


It’s no wonder we Americans are at sea. We simply can’t trust anyone anymore. Our political leaders lie to us. Our religious leaders can agree on only one thing: that theirs is the one true religion. And, our sports and entertainment heroes are a complete mess (i.e. Tiger, Lance, Lindsay and Mel, to name just a few). And, now, one of the last remaining bastions of objectivity, credibility and consumer protection, the Better Business Bureau, turns out to be a complete scam.


It’s enough to make a blogger head to the nearest pub and order up a couple of pale ales with a chaser.

20 thoughts on “The Broken Business Bureau

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  2. That was about a year after I left. Then, I spent two years in “PR Siberia” before this present agency.
    As for ReefEdge it sounds like an uncomfortable flip-flop. . .which would have been great for Summer Fridays, yes?

  3. I hear you, Lunch. I’ve been updating our database and came across ReefEdge. Were you around for that new business pitch? One of the most bizarre of all time. FYI, I Googled ReefEdge. They went belly-up in 2004. At least they outlasted Edgix.

  4. Nah…but that was a brutal client. But, I will admit that I learned a lot about how the Internet works and content delivery from Edgix. Have I applied that yet in the real world…not so much. But, maybe one day. Maybe one day, Rep. (It was akin to having to pass calculus).

  5. Rep — I don’t think PR is entirely to blame; I agree that the direction is dictated by other functions of the organization. But, that said, PR has become the morning-after pill that, all too often, enables bad people to do bad things. Indeed, when you subtract ethics from the PR equation, you get, well, someone like Karl Rove.

  6. BBB seems to have been the most abusive rating/award service of its kind, but it seems the others aren’t very credible either. Amazing how buying research from J.D. Power, for example, can help with awards. Yelp, of course, got into a passel of trouble when it tried to ‘help’ retailers with bad ratings improve their ratings. Is Consumer Reports still reliable?

  7. I once literally laughed at a client who thought having his BBB rating was important to prospective clients/investors. I counseled as long as his securities licenses are free of any pock marks for misbehaving, we’ll be fine. That client didn’t last long, but the memory has.
    It’s high time the BBB change course and follow Rep’s advice on the third party credibility you need. Honest conversations between the Exec Committee and your long-lasting clients are step number one. Then, take that dialog to the street in a humble manner.
    You’re the Better Business Bureau… start conducting your business better.

  8. I can see that you learned much from your session with Hayes Roth, Grasshopper. Well done. Copying Mr. Roth on this. Hayes: we’re discussing the crisis problems faced by the Better Business Bureau. I wrote a blog you can find at Would welcome your thoughts on Ted’s tagline comment.

  9. They also need to reconsider their tagline: Start with Trust.
    As you know, the message has to reflect reality.

  10. I totally agree, Ted. Having handled as many crisis cases as I have, I’ll bet either internal or external legal counsel is slowing down the strategic communications response. They’re concerned about winning in the court of law which may be moot if the BBB doesn’t do something ASAP about winning in the court of public opinion.

  11. The BBB has to change the tone of its response. Case in point is this letter ( from the President of the NYC BBB. The letter is too defensive and admits no wrongdoing on behalf of the Bureau. It’s all about denial.
    I’m not sure what really happened or the accuracy of the reporting on this story, but there’s a very good chance something is seriously amiss at the BBB. In the interest of protecting its reputation from irreparable harm, the BBB ought to quickly find out what went wrong and tell the world how they’re going to fix it.

  12. Thanks Greg. I really appreciate the comment. It seems to me you need to appoint some sort of ‘third party’ committee to examine practices and make suggestions for improvement. The communications I’ve seen have been limited to apologies only. The public needs to know you’ll be making substantial changes as well. And, if those changes are being made by the same people responsible for the initial problem, your credibility will be called into question.

  13. I’d order bottles of that pale ale as the tap may be watered down for profitability purposes.

  14. We realize there is a lot of work to be done in changing how we measure up to the standards consumers and business owners expect from the BBB.
    To that end, we have called a special session of our Executive Committee to convene today, Tuesday, November 16, to discuss and act upon corrective
    action to current problems in our system and processes.
    If you have any feedback/suggestions for us, please drop us a note at
    Greg, BBB

  15. I’m not sure I’d lay the guilt entirely on PR, ghost. I believe this was a fundamental decision made at the very top of the Better Business Bureau. And, I suspect he or she made the decision for the reason you cited: greed. I’m not sure PR motivates or enables that, but I’m all ears.

  16. This is eerily similar to how Michael Lewis describes the bond ratings agencies (like Moody’s) in his recent book about the collapse of the mortgage market: Their loyalty is to the businesses they’re rating (and making money from) rather than the consumers who are relying on the purity of their information.
    I’ll say it again: This is the triumph (or curse, depending on one’s perspective) of PR. When they write the book about these times, the underlying theme will be the studied, purposeful manipulation of information in an effort to advance one’s position, whether be to sell more widgets or justify a war. We’ve made it a science and, as such, can’t really complain when it gets used for less-than-ethical purposes. As Lou Reed has noted, “Radiation kills both bad and good — it cannot differentiate.” That’s probably true for PR, too.