Reliability of Better Business Bureau's grading system called into question

ByChad Pradelli and Cheryl Mettendorf WPVI logo
Friday, October 6, 2023
Reliability of Better Business Bureau's grading system called into question
Reliability of Better Business Bureau's grading system called into question

The Better Business Bureau has long been a staple for consumers to get information about companies.

But an Action News investigation calls into question the reliability of its grading system.

In February, the Investigative Team looked into Montage Furniture Services after complaints said it was unfairly denying warranty claims.

"I'm like, 'What do you mean you're just denying my claim?' And she said, 'Well, so we can deny anything we deem necessary,'" Jason Gibson told Action News back in February.

At the time, Montage had a "B" rating with the Better Business Bureau. Since Action News' report aired, that grade was upgraded to an "A+."

That's despite the 600 complaints closed with the BBB in the last three years.

"Can consumers rely on the BBB grade?" asked Investigative Reporter Chad Pradelli.

"They should use the BBB grade as one of the factors that they should use when they're making a purchasing decision," responded Andrew Goode, the vice president of the BBB's Philadelphia, Eastern Pennsylvania, and Washington D.C. bureau.

He said the bureau uses an algorithm to calculate grades.

"The heaviest indicator of a company's rating is how many complaints they have relative to the size of their business and how they've handled those complaints," said Goode.

An attorney for Montage told the Investigative Team they respond to all BBB complaints, which "comprise roughly one-quarter of one percent of the claims they processed the last three years."

They also said that many complaints are not covered under the terms of their agreements.

However, our investigation found responding does not always mean consumers are satisfied.

The BBB said they don't assess the merits of the customer or company statements but rather act as a mediator.

"We're saying whether we think the company acted in good faith," said Goode.

Goode said actions like an attorney general lawsuit are also weighed, but only after an allegation is substantiated by the courts or there's a settlement.

Our investigation found that wasn't the case for Purdue Pharma, which made national headlines for its role in the opioid epidemic and settled with several states for nearly $10 billion.

"Where's the government action? Where's the deduction there?" asked Chad Pradelli.

"I can't talk to you about Purdue Pharma," responded Goode.

In March, Purdue Pharma had an A+ rating. Since our interview with the BBB, it has no rating.

The BBB said it reviews a wide range of companies, many of which it accredits.

In exchange, a company can use its logo in advertising, which is deemed a symbol of quality since it must maintain a "B" rating.

Accredited companies pay a few thousand dollars a year and also help fund the BBB's operations.

"We didn't know that we had a page on the Better Business Bureau website," said consumer advocate Chris Elliott. "So when someone brought that to our attention, we said, 'Wow, what's going on here?'"

Elliott runs Elliott Advocacy, a nonprofit that helps resolve consumer complaints for free.

He told the Investigative Team that he received an "F" grade from the BBB after not responding to a complaint inquiry made by someone he couldn't help.

"They said anyone can leave a review," said Elliott. "We don't verify reviews."

Elliott said it wasn't until he wrote about the experience that the BBB then removed his company's profile and that "F" grade from the bureau's site.

"It made me wonder really, are there other businesses out there? And is this happening to them as well?" he said.

Goode acknowledges its grading system is not a perfect science.

However, he believes consumers should still rely on its seal as one tool in choosing a business.