Would you give high marks to a company accused by dozens of states of duping consumers about sweepstakes? How about a company accused of misleading consumers about free coins?
Probably not. But the Better Business Bureau awarded the companies an A-.
Last year ABC News aired cases in which businesses instantly turned their mediocre BBB ratings into top grades by paying hundreds of dollars for BBB accreditation. After that report and others, the bureau made changes, including dropping its policy of reserving an A+ rating for BBB-accredited businesses.
So can the public now trust the Better Business Bureau? "The answer is, absolutely, 'Yes,' " BBB president Stephen A. Cox wrote us. "And we have taken and will be taking more steps to ensure that we deliver on the public's long-standing trust in BBB."
But we've found that there's still reason for concern about the accuracy of the organization's ratings.
The bureau's A- for Publishers Clearing House, for instance, hardly seems justified given that in September 2010 the company settled allegations by 32 states and the District of Columbia that it violated an earlier agreement in part by mailing materials that mistakenly led consumers to think that purchasing merchandise would increase their odds of winning a sweepstakes.
And earlier this year, we questioned the A- rating that the Canton, Ohio, bureau gave Universal Syndications, which has its headquarters in Ohio and operates the World Reserve Monetary Exchange.
In February 2011 the company had almost 300 complaints during 36 months, and several states and the BBB's own St. Louis bureau said its advertisements were misleading.
After our inquiry, the Canton bureau changed the company's grade to B-. It has since been upgraded to B.
During our years of dealing with the BBB, we've seen some bureaus, such as the one in St. Louis, aggressively fight for consumers and others that seem asleep at the wheel.
The BBB remains an easy source for information about companies and for receiving alerts and tips. But don't use it as your only source.
When viewing a BBB report, don't put a lot of credence in a high letter grade or in BBB accreditation. But do pay attention to a low grade; it could be a sign of real trouble.
For any company, examine the type and number of BBB complaints and how they've been resolved. Check how long a company has been in business and look for details about enforcement actions by government agencies or advertising challenges by the BBB itself.
Check for complaints or reviews elsewhere. Use a Web search with the company or product name plus words such as "complaint," "review," and "fraud."
BBB charity reports don't use letter grades. Even so, when you're checking out nonprofit groups, review reports from other major charity watchdogs, including Charity Navigator (www.charitynavigator.org) and the American Institute of Philanthropy (www.charitywatch.org).