I don’t know who or what persuaded CNN to set its sights on the Better Business Bureau, but we should be glad it did. Its first revelation, which I knew about, was how the non-profit BBB is funded by the same businesses it purports to rank. Depending on the size of a business, the BBB demands membership fees ranging from hundreds of dollars to more than $10,000 a year. Members can also pay for plaques announcing their accreditation, BBB seals of approval for their company’s websites, and ads. This is not just a conflict of interest, but a classic one, as well as a system that creates an appearance of impropriety.
Joseph Ridout, a spokesperson for watchdog group Consumer Action, agreed that this structure, where the BBB is “funded by the dues-paying businesses and not the consumers,” presents a “serious conflict of interest.” The BBB, however,told CNN that its membership dues have nothing to do with the ratings companies receive. Of course! And members of Congress don’t tend to vote the way their biggest donors want. Stop being so cynical!
CNN found other money-making schemes that suggest that the Better Business Bureau’s best business is its own, but that’s nothing compared to the real bombshell: CNN’s investigation found more than 100 businesses that had ratings of A- or higher despite having serious actions taken against them by government regulators in the past year. Some were scams and have been shut down, others were required to pay multimillion dollar penalties, still others have had to pay damages in government lawsuits. Yet they had great ratings. CNN’s broadcast today featured some of the most egregious examples:
- A mortgage broker charged by federal regulators with discriminating against minority borrowers.
- A financial firm accused in an ongoing federal lawsuit of preying on seniors.
- A medical testing company that settled charges of paying kickbacks to doctors.
- A credit company that victimized service members with illegal debt collection lawsuits.
- A vitamin maker that sold supplements it said could treat symptoms of autism,until the government told them that there was no data backing up their claims.
These companies and others equally slimy sported the BBB’s highest A+ or slightly lower ratings when CNN started investigating the BBB’s rating system earlier this year. After CNN inquired about these strangely generous grades, the BBB lowered all but one.
Incredibly, BBB officials protested to CNN that high ratings weren’t as reliable or important to consumers as low ratings. Ah, well…wait, WHAT? So a crooked bunch of scam artists might get a high rating, but least we know the ones that don’t must be really horrible.
The only conclusion one can reach from the CNN expose is that the Better Business Bureau lacks integrity, competence and credibility, cannot be trusted, and thus is absolutely worthless.