What the Los Angeles Better Business Bureau's expulsion means to you

Consumer Reports News: March 26, 2013 10:08 AM

A mid-March decision by the Council of Better Business Bureaus to expel its Los Angeles-area affiliate for noncompliance with BBB standards provides lessons about the reliability of BBB reports and how to use them.

The council announced on March 12 that it had expelled the Better Business Bureau of the Southland. A 2010 investigation by ABC News' 20/20 found that the bureau was accrediting companies without properly checking their credentials. (You can file complaints against Los Angeles-area businesses or check their accreditation at la.bbb.org. Full reports on those businesses are expected to be restored over the summer.)

Concerns over the reliability of some Better Business Bureau reports are nothing new. While some bureaus, such as the one in St. Louis, seem very aggressive in pursuing their mission of business self-regulation, others seem lackadaisical, perhaps being more interested in selling memberships.

While researching a story in December, for instance, we were surprised to see the Memphis-based bureau gave an A+ rating and accreditation to a local home-warranty company that generated thousands of complaints to the BBB over the last three years. The assistant director of the Tennessee Division of Consumer Affairs said he couldn't understand how the bureau "could give them that type of score."

What to do. Such incidents notwithstanding, the Better Business Bureau remains a good tool to use when buying a product or service from a company you don't know or when you're considering donating to a charity.

When reading a Better Business Bureau business report, look for a rating of at least B, the minimum required for BBB accreditation. Remember that companies have to pay to be accredited. So lack of accreditation doesn't necessarily mean a company isn't worthy of your business.

Don't rely on the rating alone--read the report completely, paying special attention to the number and types of complaints, as well as to any listed government actions against the company.

Then use other sources of information. Do a general Web search with the company name and terms such as "complaints," "reviews," and "ripoff" to find out what others are saying on online forums and elsewhere. Some online-shopping sites, including Amazon.com, provide useful customer-generated merchant ratings.

The word on charities. The BBB Wise Giving Alliance's reports on national charities are developed by the national office. Charities that meet all the standards receive accreditation without having to pay anything. But it's still a good idea to get additional opinions by checking out any charity with the two other major watchdogs: Charity Navigator and CharityWatch. Each uses different criteria to evaluate nonprofits, so finding a charity that gets high marks from all three is a good sign.

For more on charities, read "Make Sure Your Donations Count."

Anthony Giorgianni

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