Q&A: What Better Business Bureaus do, and how they do it

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Q: What is the Better Business Bureau? What does it do?

A: A BBB is a private, nonprofit group that monitors and reports on marketplace activities. There are about 120 bureaus across the U.S. and more than a dozen in Canada. They are licensed by, and pay dues to, the Council of Better Business Bureaus (CBBB), based in Arlington, Va., which sets basic standards. Local boards of directors govern individual bureaus.

A bureau's primary source of income is dues from local businesses.

Most consumers who contact the BBB are checking out companies before they do business with them. The BBB's "reliability reports" on businesses may be accessed via automated phone systems and over the Web. The BBB is not part of the government. It does not endorse particular businesses, although it tries to steer consumers to companies that are reputable and reliable based on complaint records, regardless of whether they are BBB members. It cannot force companies to respond to its inquiries.

Q: How effective are BBBs?

A: Depends on whom you ask. But nationwide last year, BBBs resolved more than 630,000 complaints, or nearly seven of 10 complaints received. Though they were deemed "resolved," not all complaints were settled to the complete satisfaction of consumers.

Q: What's the difference between the BBB and the Chamber of Commerce?

A: The primary mission of the former is to promote marketplace ethics and help protect consumers. The chief goal of the latter is to promote economic development.

Q: What's the genesis of the BBB?
 
A: The BBB traces its roots to the early 20th century and an effort by businesses to curb dishonest advertising.

A booklet published by the council highlights a defining moment in a courtroom in 1906. That's when a Coca-Cola company lawyer dismissed a federal prosecutor's attack on the company's unscrupulous advertising by contending all ads exaggerate and "nobody really believes" them.

The position offended Samuel C. Dobbs, a businessman destined to become Coca-Cola's president. He helped launch a crusade for higher ethical standards, including local "vigilance committees" to police advertising abuses.

Q: On whom does the BBB report?

A: Nationwide, the system maintains roughly 2.2 million "reliability reports" on businesses, including roughly 75,000 for companies in Oregon and Western Washington. Five or more inquiries — or a single complaint — typically trigger a reliability report, according to national BBB officials. Bureaus generate those reports whether or not a company is a member.

Q: What happens when a consumer complains about a business?

A: The BBB usually first asks the consumer if he or she has contacted the business to work out the problem. If the consumer has but remains dissatisfied, the bureau will try to contact the company to resolve the problem. Companies that are BBB members agree to certain procedures, including arbitration, to work out complaints. Members that fail to answer complaints generally lose their membership.

Q: How many businesses belong to BBB?

A: Nationwide last year, there were more than 310,000 members, up nearly 16 percent from 1999. But 94 percent of businesses don't join BBBs. Bureaus report on businesses based in their service areas. For example, the local BBB compiled reports from around the country on Redmond-based AT&T Wireless.

Q: What else do BBBs do?

A: The CBBB and local bureaus offer a variety of other services. Among them are offering "scam alerts" for consumers and businesses; providing reviews that evaluate charitable organizations against a set of standards; running the BBB Auto Line program in partnership with certain car makers to help handle consumer complaints on alleged manufacturing defects; and maintaining the BBB Online service through which participating companies pledge to protect consumers buying online. Law-enforcement agencies such as the Federal Trade Commission and the Washington state Attorney General's Office look to the BBB for help with investigations.

Q: Are the BBB's services free?

A: For most consumers, yes, although three bureaus — New York City, Buffalo and Chicago — charge for inquiries and complaints. Businesses pay membership dues set by the local bureaus. In the case of the local BBB, the basic membership fee for new members is about $500, although dues are on a sliding scale depending on the company's size. This year, for example, AT&T Wireless paid the local bureau about $15,000, and Microsoft about $12,000, a local BBB official said. Additional services, such as belonging to the BBB Online program, cost businesses extra.

Peter Lewis: 206-464-2217 or plewis@seattletimes.com