The BBB is a F*&#ing Scam

What is the BBB?

Many people mistakenly think that Better Business Bureau is a government agency that is a consumer watchdog making sure that companies do no wrong. Unfortunately, that is completely false, just an image that the company gives. The BBB is legally a C-Corporation that is much closer to the mafia of old, the guys who went into small businesses and told the scared owners that bad things might happen if they didn’t pay. While it started with noble intentions 100 years ago, in recent years the company, started to protect us from scams has degenerated into being a scam itself.

Why this interests us – Xpay

We recently got an email from a customer about one of our credit card processors. The customer complained that there was a processor in our marketplace (lets call them Xpay) who had an F BBB rating. We vet our processors to make sure that they have stellar customer service, so we were shocked to learn this. We contacted Xpay and asked that they rectify the situation. The BBB site said that they had 11 complaints against the company, therefore it got an F rating. This by itself seems acceptable… they have a lot of complaints so they aren’t trustworthy. However, if you look at their competitors – for example, Merchant One or Leaders you’ll see many more complaints (Merchant One has 163 complaints, Leaders has 147). We’ve seen their statements, and they are completely ripping people off. They also simply lie outright, even in their Google ads, promising rates that are impossible.

 

This is an outright lie – no-one can provide merchant services for 0.00%. Believe it or not, a lot of people fall for these scams (when we try to pitch FeeFighters to some merchants, they say “we have a free merchant account” We’ve found it really tough to convince them otherwise), and the BBB continues to give these companies A+ accreditation because they pay money to the BBB. This gives a lot of people a false sense of security and makes me very mad.

 

Xpay’s resolution – pay off the BBB, move from an F to an A-

Xpay asked the BBB what they could do to fix the problem. It turned out that all they needed to do was grease the wheels. The BBB noted that Xpay wasn’t a member organization, and by becoming a member organization the BBB would “look into” those 11 complaints to see if they were worthy of being wiped clean. Xpay paid the BBB a fee of $760 (see fee schedule). Within a couple of days the rating had changed from an F to a C. A few days later and another phonecall, and the rating was changed to an A-.

 

What should you do?

1) Don’t put ANY credence whatsoever in the BBB’s ratings. It is NOT a valid data point.

Until recently, Ritz CarltonDisneylandGoogle, and Starbucks had D’s and F’s, and Hamas (yes, the terrorist group) had an A-, and the Aryan Nation White supremacist group Stormfront had an A+. There are TONS of unscrupulous companies in our business that have A+ ratings and it really grinds my gears that people are being ripped off because they think these companies are vetted by the BBB. The BBB inherently has a conflict of interest – their main source of revenue is businesses who pay a membership fee. But those same businesses are the companies that the BBB is supposedly regulating… So if a consumer reports a company to the BBB and the BBB lowers that company’s grade, how likely is that company to re-up with their membership fee? Not very.

2) Do your own research.

This one is tough, but unfortunately it’s hard to find unbiased reviews of services. For restaurants there is Yelp, and for products, you can trust the Amazon reviews… For handymen and plumbers there’s Angie’s list (I can’t believe that they get away with charging for membership), but there aren’t any great organizations that rank services like credit card processors. We want to rectify this so we started a Credit Card Processing Directory with unbiased reviews. For most things though, we’re back to the old days where you need to get reviews from your friends or look for companies that have some positive major press mentions.

3) If you have a complaint, bring it up with the business in question before filing with the BBB.

Remember, the BBB has no authority over the business, and their tactics are annoying on both ends (as a business and a consumer). They actually charge consumers a lot of money for “complaint resolution” and are constantly trying to upsell consumers to this service that costs between $225 and $500. If you have a problem, try to resolve it with the company first. If that doesn’t work, write a nasty blogpost or maybe make a youtube video.

For more information, including an interview with the head of the BBB, Wolfgang Puck, Ritz Carlton, etc check this great video from 20/20 a few months ago:

 

 

5 Comments

Ashish says:

Love the post. Totally did NOT know about it. The link to the 20/20 video seems to be cut off

[…] to help business owners keep more of their money” came out swinging, with a blog post titled The BBB is a F*#ing Scam. They’re not particularly stealthy about having their own vested interests in the discussion. […]
Paula J. O’Neal says:

I contacted the BBB 6 Yrs. ago in Okla.
I was speaking the Lady Director. She said you have a case. Yhis was regarding a cellar with special stairs for people with a disabilty. I offered to mail pictures. Not necessary. I checked it a year later, oh, great rating. That’s before I knew you could buy a rating. That I just learned in the last year. Yes, they are a joke. No One will ever trust them again.

[…] money” came out swinging, with a blog post titled The BBB is a F*#ing Scam. They’re not quite cat-like about […]
Hollywood Bob says:

My business was with the BBB for a few years. They gave me a reduced price, and were very polite – no hard sell. We had an A+ rating, no problem.
The reason I quit was that they were unable to help me with a phone company that slammed us (something that happens to be against the law). Reason? That company had just joined the BBB. So much for settling disputes. That company kept their A+ rating in spite of my complaint.

What’s the point of the BBB from the consumer point of view? Another scam, if you ask me.

Leave a Reply 1 comment