Just Who’s Watching the Watchdog?
I wrote about a new partnership with Grand Incentives on Monday. During my research of this program over the weekend, I ran into another web site that I remember seeing some time ago, but couldn’t seem to find again. During my research, I came across numerous articles over the last year which called up memory of this site but couldn’t quite remember the proper site to review all the information again in one place.
Until I found a link to it from the Grand Incentives website this weekend.
As it turns out, Grand Incentives has also been “black listed” by the Better Business Bureau with an “F” rating and low and behold, they too linked back to the wealth of information found on the BBB Roundup exposing this so called “Consumer Protection” group as a complete farce.
From the looks of it, the BBB is getting some very poor grades of its own.
The problem appears be multifaceted since the BBB changed their system in January of 2009 from a simple “satisfactory” or “unsatisfactory” rating system to a grading system that’s been exposed by most as unfair, and others as nothing less than corrupt.
So who’s watching the watchdog?
The number of articles over the last year are growing with more and more people who are fed up with the BBB and calling for reform, including BBB Roundup. The grievances have mostly been by local news organizations, but has even caught the attention of Congress and an Attorney General who’s demanding answers from the organization.
And the BBB response? For the most part, the concern is met with arrogance and deflection and appears to hold them under a completely different standard. (Hmmm, sounds like another group of Professionals I know.)
When the world’s most popular search engine (Google) has a “D” rating a year ago with 424 complaints – and today has a “B-” rating with 50 more complaints a year later (479 currently) – maybe we need to start with the truth in order to develop trust?
From everything that I’ve read (and there is plenty to read) there is some very compelling evidence that the BBB favors a “pay to play” type grading system that provide paying members better grades than non-paying members. Membership can range anywhere from $300 to $10,000 annually. If you don’t buy into the system, all bets are off – and there is very little if anything you can do to change a bad grade.
Short of forking over some big bucks.
It needs to be pointed out that not everyone in the BBB agrees with the National mandate handed out last year. Each “chapter” is independently owned and operated. According the Houston Chronicle, the local Better Business Bureau office there believes the new system has “tremendous inequities“.
The BBB, often confused for a government agency, is a non-profit franchise funded organization who primarily relies on membership fees to support itself. It’s widely known that an A+ rating is reserved only for accredited (or dues-paying) companies. Because of it’s reliance on membership dues, the BBB has come under fire for using high-pressure and heavy-handed sales tactics to force Businesses to pay for accreditation, which in return would boost their grades.
Wanna see how much accreditation pulls for you with the BBB? Let’s look at Leonard & Co. I found in this article — a Troy-based brokerage who received a $225,000 fine from the Financial Industry Regulatory Authority a year ago for securities violations, including the illegal sale of shares of some stock. But because they happen to be an accredited company with the BBB — you’ll find an A+ rating. Note, that there’s still no mention of the fine, which can be found at Financial Industry Regulatory Authority web site. Leonard & Co. has been a BBB-accredited business since 1998.
The new grading formula rates each business against 16 weighted factors and spits out the corresponding letter grade. According to the Springfield Business Journal an entire industry is automatically given a lower grade than another, because there are industries they consider “scams”. For example, a car title loan businesses raised “concerns”with the BBB and therefore received an “F” rating despite a three-year absence of customer complaints or any history of resolving complaints.
You would think that with all the myths, phobias, and social misgivings about MLM, our industry would automatically receive a lower grade than a traditional business model. One such company is Nu-Skin. In 1997 Nu-Skin was slapped with a $1.5 million fine for deceptive trade practices by the FTC, yet receives an A+ rating from the BBB. More recently, USANA was slapped with a 2007 Class Action suit for operating an illegal pyramid scheme that misled investors. There’s far more that I can elaborate on the USANA saga a couple years ago, including an investigation by the SEC. Yet USANA receives an A- rating from the BBB.
Why would the BBB give two such companies with this type of documentation such high grades? Because they’re corporate offices happen to reside in the MLM capital of the world, Utah. (More than 350 MLM companies make their home there.)
Makes you wonder what type of rating YTB could have if they were under the Utah chapter of the BBB instead of the Illinois chapter huh?
Fact is, the BBB doesn’t have the same type of control or system that a normal franchise does. You can go to McDonald’s here in Atlanta and expect to eat a cheeseburger of the same quality and consistency in St. Louis. Not so much with BBB – as there is plenty of evidence to support that each chapter ranks companies on a completely different scale without any control or oversight from the CBBB in Washington DC. A great place to start is the BBB Roundup website with a list of articles that point to this fact.
Sure, you’re going to find people who will continue to point to the BBB, thinking that each grade given is accurate or relevant. Me, not so much anymore after the pile of news articles and government intervention I’ve seen over the last year it’s clear that the BBB has fallen out of grace with many consumers and businesses.
If you’re as appalled as I am over the weight and pull the BBB appears to have, you can place a vote for the much needed change from the BBB Roundup website. I linked to it Sunday night on my Facebook page and thought it would be relevant for an entire post documenting how far the BBB has fallen from a respectable consumer advocate to a money grabbing atrocity.
That being said, I have no idea if any change is going to be made moving forward. The BBB continues to feel they are above any of the facts that have been laid out over the last year. The pressure is certainly mounting however, based on what I’ve seen on the internet and there are far more people than ever before who have discontinued their trust in the BBB. (I know I have.) There’s far more to it for me than simply not being a “government agency”.
It makes a big difference when an outfit designed as a consumer watchdog – has been called out itself for not being honest with the consumer.
So go place your vote for effective change to BBB and help make is a respectable and authentic consumer watchdog again.
Update: I’ve received word that a certain “someone” is using the BBB as a soapbox to stand on, attempting to out YTB’s partnership with Grand Incentives. While I’m certain that this individual didn’t look into the same issues I have with the BBB, to make an informed, educated decision about its relevance or importance – please understand why I no longer find this “someone” as a credible or relevant source, just as the BBB is no longer relevant or credible.
The author had no idea that this article was scheduled for today, turning his “soap box” into a big ol’ pile of dung. ;-P
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Tags: BBB, Better Business Bureau
February 12th, 2010 at 7:02 am
[...]I told you how I picked up on “issues” the Better Business Bureau was having with their new grading system. It appears that the BBB is getting some very poor grades of their [...]