Amid criticism that the Better Business Bureau boosts ratings of dues-paying members, the chief executive of Chicago’s BBB acknowledged a “stigma” of “pay to play” but took pains to point out that 158 local businesses have been thrown out of the organization in the last three years and another 40 have been denied membership in the last 12 months.
“So you just can’t buy into the organization and write the check,” Chicago BBB Chief Executive Steve Bernas said in an interview. “You have to meet and maintain standards.”
On Thursday, the Arlington, Va.-based non-profit, addressing concerns raised by businesses, consumers and Connecticut’s attorney general, announced that its executive committee voted unanimously to stop giving additional points, effective next week, to businesses that have been accredited by the BBB. It said it will continue to issue ratings, which range from A+ to F, based on 16 other factors.
“The stigma could be the ‘pay to play’ aspect of it,” Bernas said late Thursday. “Therefore, we have eliminated that aspect of it, and we’re no longer issuing additional points to accredited businesses.”
He said that now a nonmember, or a non-accredited business, will be able to obtain an A+ rating. That hasn’t always been the case, he said.
Companies will still pay for the right to call themselves a BBB-accredited business, but “we’ll not factor in the additional points for accreditation, so everybody will be on the same level playing field,” Bernas said.
Still, Bernas defends part of the BBB’s process.
“We believe the accreditation and vetting process, and the contractual obligation to uphold our standards and resolve complaints, shows a commitment on the part of an accredited business,” Bernas said. “If they were accredited by us, we give them extra points for accreditation because they subscribed to our standards and contractually agreed to resolve any issues or complaints brought to their attention by the BBB.”
A company must apply for BBB accreditation, and the BBB spends six to 10 days verifying their information, including matters about licensing, insurance, number of customers and how long they’ve been in business, Bernas said.
“All that is factored into an algorithm by the computer which basically gives them a grade,” Bernas said. “So the grade is earned by the company, not given by us.”
Then consumers can use that grade as a tool to determine whether it would like to do business with that particular company.
“It gives consumers a safety net that these businesses will say what they do and if they don’t they’ll resolve the issue with our BBB,” not only through mediation but with binding arbitration enforced by Illinois state law, he said.
Businesses that don’t resolve their complaints get their accreditation revoked, Bernas said.
“In the last three years, the Chicago and Northern Illinois BBB has revoked the accreditation of 158 companies that didn’t meet our standards and failed to adhere to our standards,” such as not doing what they promised to do, or not resolving complaints, he said. The local BBB has 7,300 members.
“We sell accreditation,” Bernas said. “We don’t sell ratings.”
The uproar will have little if any impact on the Chicago BBB, he said.
“We’re the strongest we’ve been in almost 85 years of history in Chicago,” Bernas said. “And the BBB system overall is almost 100 years old.”
He also said that, over the past 12 months, the local BBB has denied accreditation to 40 companies that didn’t meet its standards.
Asked for comment Thursday afternoon, the office of the Illinois Attorney General said “The BBB informed us that its new ratings systems will not include points for businesses joining the BBB.”
