BBB Under Scrutiny

Link: http://www.bbbroundup.com

Dear Steve,
This is my third attempt to get your response to points I have raised about the standards and practices of the Better Business Bureau. Your silence speaks volumes. Here are the questions that I think the public deserves answers to:

1. Why did the BBB implement the flawed Letter Grade system nationally?
2. What part did money play in the decision?
3. Do you understand that if nothing else, there is a great sense of impropriety in your decision to roll out the Letter Grade system nationally?
4. If the Letter Grade system is so good, why did you change the grades of Disneyland and the Los Angeles Times after I reported that they both had "F" grades to "A" grades without any explanation?
5. Why are you forcing this grading system on all BBB offices, even those with specific concerns about the fairness of the system?
6. If having all BBB offices on the same page with the Letter Grade is so important, why are there no similar directives to enforce standardization in how the complaint history of a business are gathered and displayed?
7. Why is the BBB practicing media relations in the manner and style of Richard Nixon, Gary Hart, Roger Clemens and Alex Rodriguez instead of being upfront, honest and transparent?
8. What do you say to charges that if the BBB were to apply their own Letter Grade algorithm to themselves they would be graded as an "F"?
9. Are you really so arrogant that you think that your attempts to muzzle the story will work?
10. Are you ready for the next round of revelations?

Sincerely,
Jimmie Rivers

Link: http://www.bbbroundup.com

I’ve been asked again, why I’m doing this story. The reasons are complex, but essentially in this economy, what the Better Business Bureau is doing by adopting an ill-conceived Letter Grade system, and ramming it down the throats of their membership in an apparent attempt to maximize revenues comes at the expense of the small business. This is bad for the economy.

It’s been pointed out before, albeit in a satirical voice, that the newly adopted Letter Grade system is prone to mistakes, and while Disneyland can survive an unwarranted “F” grade from the Los Angeles Better Business, many a small business cannot. This is especially true in today’s economic meltdown when people are being more cautious before spending and are using the Better Business Bureau in record numbers before making purchases. The Council of Better Business Bureaus knows their Letter Grade algorithm is flawed but continues to ram it down the throats of not only the consumer, the businesses they grade, but to a large percentage of their Better Business Bureau regional offices as well. This is rapidly becoming a great divide among the Better Business Bureau. Not only do these revelations increase the appearance of impropriety, the Council of Better Business Bureau actions in stonewalling and ignoring the media queries give the appearance of making the organization look guilty.

The Better Business Bureau built up the incredible trust they have with the public for over 90 years. At the rate they are going, they will squander this trust by the end of the year.

I have stated before, and will state again that I have no wish to destroy the Better Business Bureau. I do wish to help reform it by making sure that small business is treated fairly, the Bureau operates with much more clarity and transparency, and returns to the business model of being an advocate for complaint resolution through mediation and assistance rather than adversarial, arbitrary and confrontational means.

What’s been going on in the last few days gives me hope that the “good guys” can win here. I had noticed Josh Parsons’, CEO of the Houston BBB, stand against the Letter Grade system in the Houston back in January. To date he is the only BBB official to have the strength of his ethics and go on the record against the Letter Grade system. He did it, because as he rightly pointed out, the BBB does not have the resources to do an accurate, impartial job of it, so they are better off not doing it all. Yesterday, he went on record again, reaffirming his bureau’s stance in the matter. The most important fact that wasn’t pointed out is that for the last three years, even in the wake of Katrina, the Houston Better Business Bureau was one of the fastest growing regional BBB offices (by revenues) in the nation, doing far better than the national average. Again, this brings with it an appearance of impropriety. Reasonable men, making reasonable assumptions, could conclude that the National BBB chose to ignore ethical considerations (a grading system many of the regional BBB offices think is unfair) in favor of money (the increased revenues generated by the Los Angeles BBB’s Letter Grading system.) Count me among them.

Link: http://www.bbbroundup.com

In a recently exposed internal memo to regional BBB offices, CBBB spokesperson Steve Cox took issue with bbbroundup.com but said "I do not expect mainstream or legitimate digital media to use or reference the site."

This approach has been tried in the past, perhaps most notably by Gary Hart whose campaign for presidency was derailed after he challenged the press. Monkey business was the result. More recently, Alex Rodriguez of the NY Yankees dug himself a deeper hole on his use of PE drugs by trying to snow reporters.

While on the whole I have found today's press for the most part to be too reliant on regurgitating press releases for their stories, I still believe that when challenged, the majority of reporters still know how to write a story.

More importantly, if the increase in interest, correspondence and leads to check out over the past few days is any indicator, this story is about to grow wings. So much so, that the fourth part in my investigative series on the LA BBB, originally scheduled for release today, is being held back while I confirm several new allegations.

As a sneak preview to coming attractions, let me just say the "pay for play" story is small potatoes to what's coming next.

Link: http://bbbroundup.com

Following is an internal BBB email regarding bbbroundup.com that was provided to me by my source in the LA BBB. Following their memo I have put my comments in CAPS.
Jimmie Rivers
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BBB PR: For BBBs - Investigative Web site Critical of BBB System
Cox, Steve scox at council.bbb.org
Thu Mar 19 10:54:02 CDT 2009

Colleagues,

Bottom Line: You need to be aware of a Web site call "bbb Roundup" -
http://www.bbbroundup.com/.

Background: Following is as much information as we have about the site at this time. We are continuing to research the site, and will provide additional information as it becomes available.

* The site is principally an attack on the BBB system - and
specifically cites some BBBs by name.
* The site specifically attacks BBB Ratings along the lines of
inconsistent/illogical grades, and not necessarily points for
accreditation (although that issue is raised in parts of the site)
* The site also specifically attacks our member-funded business
model
* The site also includes a host of other BBB system criticisms
that span a range of topics
* The site operator/editor uses the pseudonym "Jimmie Rivers" and
claims to be a former journalist
* The domain was privately registered on March 4, 2009
* The Web site is hosted abroad in Singapore/Australia
* The site lists a 310-497-4806 phone number which is in Santa
Monica, CA - the number appears to be a cell number from Sprint

Assessment: While it's always concerning to see public criticism, the
value and credibility of this site is greatly diminished by the use of
the pseudonym and inability to verify sources. Essentially the site is
not legitimate or transparent: its creator is unwilling to publicly
disclose identifying information and, for this reason, I do not expect
mainstream or legitimate digital media to use or reference the site.

This said, we will certainly be keeping a close eye on the site to track
whether the site is being marketed in any way (to this point, it is
not), and whether the site is gaining any traction in online
communities.

Media Relations Guidance: This site represents one of those issues that we must literally communicate with "one voice" on. With this in mind, I would ask the following:

* If questioned about the site by any media, please refer them to
me for comment.
* Recommend you inform your Boards of the site's existence - i.e.,
let's ensure our internal audiences are aware of the site, but ask them
to consider such information confidential and not for external audiences
* Please do not personally publicize the site to any external
audiences - i.e., do not distribute any press releases attempting to refute comments from the site - and do not refer to the site in any interviews. Use caution in forwarding electronic messages concerning the site - once you forward something, you lose the ability to control where the message may go from there.

We'll provide more information as it becomes available.

Steve

Stephen A. Cox | Vice President, Communications

Tel: 703-247-9311

Fax: 703-525-8277

Email: scox at council.bbb.org

www.bbb.org | Start With Trust

Council of Better Business Bureaus, Inc.

4200 Wilson Boulevard, Suite 800

Arlington, VA 22203

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THERE IS A DIFFERENCE BETWEEN AN ATTACK AND LEGITIMATE CRITICISM. MY GOAL IS NOT TO BRING THE BBB DOWN, BUT TO HAVE THEM ELIMINATE THE SENSE OF IMPROPRIETY THAT PERVADES THE ORGANIZATION AT THIS TIME. THOSE IN PUBLIC SERVICE MUST BE HELD TO A HIGHER DEGREE OF ACCOUNTABILITY THAN THE NORM, AND IT IS HERE THAT I BELIEVE THE BETTER BUSINESS BUREAU FAILS. (IT IS NEVER TOO LATE TO REFORM GUYS!)

I FIND IT ODD THAT THE BBB CHANGED SOME OF THE MORE ILLOGICAL GRADES (DISNEYLAND AND LA TIMES GRADES CHANGED FROM "F" TO "A" IN PARTICULAR) WITHOUT INFORMING YOUR BBB OFFICES THROUGH THIS EMAIL. THIS IS FAR FROM BEING TRANSPARENT TO YOUR REGIONAL BBB OFFICES. FEAR NOT HOWEVER, WE WILL GET TO THE ALGORITHM AND THE HOW VARIOUS ASPECTS OF BUSINESSES ARE JUDGED BY THE BETTER BUSINESS BUREAU IN FUTURE SEGMENTS.

TRUE. I DO FIND THE MEMBER BIASED GRADING SYSTEM UNFAIR. HOW WOULD YOU FEEL IF THE STUDENT NEXT TO YOU HANDED THE TEACHER A $100 AT THE BEGINNING OF A TEST? DO YOU THINK THEY MIGHT HAVE A BETTER GRADE ON THE TEST THAN YOU WOULD IF YOU DIDN'T ALSO COUGH UP $100?

YOUR COMMENTS ABOUT "JIMMIE RIVERS" AND OFFSHORE HOSTING, ETC. ARE ALL TRUE AND DONE FOR A REASON. AS STATED IN SEVERAL PLACES ON THIS WEBSITE, I STARTED THIS SITE WITH MY EYES WIDE OPEN, KNOWING I WOULD BE A TARGET OF THE BBB AS THIS INTERNAL EMAIL PROVES. THERE IS NO LAW SAYING I HAVE TO MAKE MYSELF AN EASY TARGET.

ACTUALLY, I HAVE BEEN STRAIGHT UP AND FORTHRIGHT. I AM AT LEAST AS TRANSPARENT AND LEGITIMATE AS THE BETTER BUSINESS BUREAU IN THEIR DEALINGS WITH THE PUBLIC, THE PRESS AND BUSINESSES. ALSO, I HAVE QUERIED THE BETTER BUSINESS BUREAU DIRECTLY AS TO WHY THEY CHANGED THE GRADES FOR DISNEYLAND AND THE LA TIMES FROM A "F" TO AN "A" AND HAVE YET TO RECEIVE A RESPONSE. THE BBB KNOWS MY EMAIL AND PHONE BUT HAS CHOSEN TO HIDE RATHER THAN COME FORWARD. IRONICALLY, I'M PRETTY MUCH FOLLOWING THE MODEL ESTABLISHED BY THE BBB IN HOW THEY DEAL WITH BUSINESSES WHO ARE NOT MEMBERS. NO WONDER THEY DON'T LIKE IT. BY THE WAY, GEORGE GOMBOSSY OF THE HARTFORD COURANT HAS TAKEN UP THE STORY. LET'S SEE IF MORE "MAINSTREAM OR LEGITIMATE DIGITAL MEDIA" START JUMPING ON THE STORY.

STEVE: YOU HAVE MY EMAIL AND PHONE NUMBER. I'M HAPPY TO DISCUSS THINGS WITH YOU ON THE RECORD OR OFF.

JIMMIE

Link: http://www.bbbroundup.com/LosAngelesBBB.html

On January 1, 2009, the Council of Better Business Bureaus launched their new Letter Grade system nationwide. Many in the press were quick to call it pay for play grading system. I don’t disagree. However, nobody has gone to motive yet. In other words, we in the media have pretty much known all along the BBB members get preferential treatment from the BBB. So the pay for play was in some sense of the word, a dressed up rehash of old news. The Letter Grade system just made the preferential treatment more obvious, and so became a story.

But I had the thought that if it truly is a pay for play scheme, where’s the money? Show me the money. Let me follow the money. They say that numbers never lie. Truly they don’t. Thanks to several sources and the Freedom of Information Act, I have numbers, lots of numbers.

The Letter Grade system that the BBB launched in January was based on the Letter Grade system and algorithm developed by the Los Angeles BBB in 2004. The numbers will show that the Los Angeles BBB increased their revenues from member dues by over 40% (or $4 million) in the first four years of using the Letter Grade system. From 2006 through 2007 the rest of the BBB offices had zero growth in member dues revenues. During the same period, the LA BBB experienced a 14% increase in member due revenues. So, is that the smoking gun? You tell me. The complete report on behind the numbers of the BBB Letter Grade system is here.