Better Business Bureau Los Angeles Chapter-Expelled

As a Los Angeles based business, it was huge news to hear that the Better Business Bureau (BBB) of the Southland was expelled from the Organization for demanding that businesses pay membership fees for good ratings. The Los Angeles Chapter was a corrupt organization. Horrible.

An LA Times article by Adolfo Flores titled:”Better Business Bureau expels Los Angeles area chapter brings to light years of strife and eventual audits by the Council of Better Business Bureaus that led to the demise of the largest chapter in the entire organization. The article is a good read if not a bit disappointing for those of us who regarded the BBB reputation as leading resource for consumers. Here are the main points the article covers:

BBB of the Southland Accused of “Pay to Play”

According to the LA Times article, the Council of Better Business Bureaus said the Los Angeles area affiliate failed to comply with several standards, including guidelines relating to accreditation, reporting on businesses and handling complaints. Over the course of two years, three audits were conducted in addition to hearings that examined “pay to play” allegations that eventually led to the local group’s expulsion.

Perhaps the most damming evidence against BBB of the Southland came in 2010. ABC News reported that a group of Los Angeles business owners critical of the BBB paid dues for several fake companies, including one named Hamas. Apparently, not only were the dummy businesses accepted they were given ratings and accredited. Hamas was given an A- rating!

BBB Loses Influence in the Digital Age

A consumer watchdog for 101 years, the Better Business Bureau was once the pinnacle of consumer protection with worldwide brand recognition. The nation’s businesses scrambled to get a plaque with the BBB’s endorsement. It was also revered by consumers who could report small-business owners to the BBB if they felt wronged. However, the BBB has seen its influence wane for years especially as it struggled to stay relevant among review-based websites such as Yelp and Angie’s List.

Tough Times Ahead for New BBB Affiliate

After losing their BBB affiliation, the national group said it would operate a “virtual BBB” until a new local group is established. According to the article, every local BBB chapter is an independently run nonprofit with the parent organization holding the rights to the name and setting policies for members follow.

Former Los Angeles chapter executives launched a splinter group called the Business Consumer Alliance promising to offer the same services it provided as before. But to add more confusion and uncertainty, BBB staff members from around the country will take on local responsibilities in the interim and businesses will be allowed to continue to use the BBB seal. Essentially, the BBB and the new Business Consumer Alliance will be competing for the same customers.

The good news for consumers is that there are still great ways to research businesses and services online. Just Google a company name and you’ll find out if they are a scam or rip-off pretty quickly regardless of whether they are a BBB member or not. In my experience, businesses that already take care of their customers needs already have a good reputation and don’t rely exclusively on the Better Business Bureau to legitimize them.

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