Better Business Bureau

Better Business Bureau. The Better Business Bureau is a private, nonprofit organization founded in 1912 that aims to advance marketplace trust between businesses and consumers. It operates through a network of independently incorporated local bureaus across the United States and Canada, which collect and provide business reliability reports, handle consumer complaints, and offer accreditation to businesses that meet specific standards. The organization is known for its letter-grade rating system and its role in mediating disputes, though its methods and funding model have been the subject of scrutiny and criticism over the years.

History and founding

The organization traces its origins to the early 20th century, emerging from the advertising vigilance committees of local business bureaus and the associated Associated Advertising Clubs of the World. Its formal founding in 1912 was driven by a need to combat fraudulent advertising and unethical business practices prevalent during the rapid industrialization of the Progressive Era. Early efforts were supported by figures like Samuel C. Dobbs, an advertising manager for The Coca-Cola Company, who advocated for truth in advertising. Throughout the Great Depression and subsequent decades, it expanded its mission from policing advertising to broader consumer protection, evolving from local groups into a cohesive national network that later extended into Canada.

Structure and operations

The organization functions as a federation of over 100 independent local bureaus across North America, each governed by its own board of directors and operating within specific geographic territories, such as the BBB of Metropolitan New York or the BBB Serving the Pacific Southwest. These bureaus are overseen by the Council of Better Business Bureaus, now known as BBB National Programs, which is headquartered in Arlington, Virginia. Primary operations include maintaining business profiles, processing consumer complaints and inquiries, and providing dispute resolution services, often through informal mediation or arbitration. Funding is derived largely from membership dues paid by accredited businesses, supplemented by grants and fees for services like charity review through the BBB Wise Giving Alliance.

Accreditation and ratings system

Businesses can seek accreditation, a voluntary process involving an application review, adherence to the organization's standards, and payment of dues, which vary by business size and location. Accredited businesses agree to uphold principles in the organization's Code of Business Practices, which addresses transparency, honest advertising, and responsiveness to consumer complaints. The public-facing ratings system, overhauled in 2009, assigns letter grades from A+ to F based on multiple factors, including the business's complaint history, transparency, licensing, and advertising practices. This system is distinct from accreditation, as both accredited and non-accredited businesses receive a rating, though failure to resolve complaints can negatively impact a rating regardless of accreditation status.

Criticisms and controversies

The organization has faced significant criticism, primarily centered on its funding model, where critics argue the reliance on dues from accredited businesses creates a conflict of interest and a "pay-to-play" perception. Investigations by media outlets like ABC News and CNN have alleged that rating inflation can occur, with accredited businesses sometimes receiving more favorable treatment. High-profile incidents, such as the 2010 suspension of the Los Angeles bureau after it gave an "A-" rating to a fake business, have fueled debates over rating integrity. Other controversies include the handling of complaints against large donors and the perceived ineffectiveness of its dispute resolution in cases involving major corporations like Comcast or Bank of America.

Impact and influence

Despite controversies, the organization has exerted considerable influence on consumer culture and business self-regulation in North America. Its business profiles and complaint data are frequently consulted by consumers and referenced by media organizations, including The Washington Post and USA Today. The organization has also shaped industry practices through specific programs like the National Advertising Division, which reviews national advertising for truthfulness. Its model has inspired similar consumer protection initiatives globally and it remains a commonly recognized entity, with millions of consumers accessing its reports annually through its website and partners like Google and the Federal Trade Commission.

Category:Organizations based in Arlington, Virginia Category:Consumer protection organizations in the United States Category:Organizations established in 1912