The Better Business Bureau (BBB) is a private, nonprofit organization that’s focused on advancing marketplace trust. The BBB offers accreditation to businesses along with a ratings system, which consumers can use to determine how likely a business is to respond to complaints.
Many people use the BBB to check on a business’ trustworthiness or to register issues. Though you might not give much thought to how the Better Business Bureau works behind the scenes, it can play a role in influencing which companies consumers choose to do business with.
Read on to learn:
• What is the Better Business Bureau?
• How does the BBB work?
• What does it mean if a company has a poor score with the BBB?
What Is the Better Business Bureau?
So what is the BBB and when did it start? The Better Business Bureau is a private, nonprofit organization that was founded in 1912 and is not affiliated with any government agency. The primary mission of the BBB is to help consumers identify trustworthy, reliable businesses. As of 2021, the BBB maintained profiles for approximately 6.3 million businesses and more than 25,000 charitable organizations.
The Better Business Bureau is generally considered to be a trusted source for information about registered businesses and charities. According to the BBB website, consumers visited BBB profiles more than 200 million times in 2021 to get information about companies and charities. Given this depth of information and its popularity, the Better Business Bureau may be a valuable resource to use now and in the future.
Today, the BBB brand is represented by multiple entities, including the International Association of Better Business Bureaus and the BBB Wise Giving Alliance. The former represents local BBBs that operate in the United States, Mexico, and Canada. The latter focuses on helping donors make informed decisions when giving to charity.
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How Does the Better Business Bureau Work?
The Better Business Bureau works to help educate consumers about businesses and charitable organizations. The BBB accomplishes that goal by:
• Maintaining profiles for accredited and non-accredited businesses
• Publishing ratings for individual businesses and charities
• Offering accreditation for businesses
If you want to learn more about a company or business, you can search for it on the BBB website. You can then read the company or business’s profile to learn how the BBB rates it and what other consumers are saying about it.
The BBB ratings range from A+ to F, which represent the highest and lowest ratings respectively. Ratings are determined using information the Better Business Bureau is able to collect directly from businesses and indirectly from public data services.
BBB ratings are based on these factors:
• Type of business
• Time in business
• Business’s complaint history with the BBB
• How transparent the business’s practices are
• Failure to honor BBB commitments
• Licensing and government actions known to the BBB
• Advertising issues known to the BBB
If there’s insufficient information available about a business, then the BBB won’t rate it. The BBB also states that ratings aren’t a guarantee of how reliable a business is. In other words, even if a company has an A+ rating, that doesn’t mean you won’t have any issues.
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What Does It Mean If a Company Is Accredited?
What is BBB accreditation? In simple terms, it means that a business meets Better Business Bureau standards for trust and reliability. In order for a business to become BBB-accredited, they must agree to:
• Build trust by having a positive track record in the marketplace
• Advertise honestly and tell the truth in interactions with consumers
• Be transparent in sharing information with the BBB
• Honor promises or commitments made to the BBB
• Be responsive in addressing consumer complaints or disputes submitted through the BBB
• Safeguard consumer privacy
• Act with integrity at all times
Businesses do not have to become BBB-accredited, but choosing to do so may help to build trust with consumers. There is a fee for BBB accreditation, which varies based on the size of the business.
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What Happens If a Company Has a Poor BBB Grade?
A poor Better Business Rating can indicate that a company or business has a history of negative consumer complaints and that those complaints may not have been resolved favorably. When you search for a company’s profile, you’re able to read any complaints filed and see what consumers are saying. You can also see if the business has responded to those complaints and how they were resolved.
The BBB also collects information on any regulatory violations the business has been involved in. If someone in a business has been convicted of a criminal offense in connection with business operations, that may be listed with the BBB as well. Generally, however, the BBB does not publish information about any private lawsuits a company may be involved in.
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Does the BBB Collect Information About Banks?
The Better Business Bureau does collect information about banks, which can be helpful if you’re interested in opening a new bank account. For example, you might use BBB ratings to compare small banks vs. large banks or traditional banks against online banks.
In terms of how financial institutions are governed, the BBB does not play a role. Instead, that’s left to the Office of the Comptroller of the Currency (OCC), a federal government entity that’s an independent bureau of the Department of the Treasury.
The OCC oversees and regulates chartered banks across the country. The BBB cannot step in and mediate any issues.
If you’re interested in taking a closer look at complaints involving banks, you can also check the Consumer Financial Protection Bureau (CFPB) consumer complaint database .
The Better Business Bureau can be a great place to look for information when you want to learn more about how a business operates. While the BBB never recommends or endorses any business or charity, you might use reviews as a starting point for deciding which companies you want to do business with or donate to.
Can I use the BBB to find a bank?
The BBB publishes profiles for retail, commercial, and investment banks, so you could use it to find a new place to keep your money. Remember, though; the BBB doesn’t guarantee how a bank will operate, though it does reflect its record of trustworthiness and transparency.
Do I need a business or checking account?
The difference between a business vs. checking account is fairly simple. Business accounts are designed to hold funds for business purposes, while personal checking accounts are for personal use. The type of account you need can depend on whether you run a business or not. If you do, it may be helpful to have one of each in order to keep your finances separate.
Can I use the BBB to find a financial advisor?
You could use BBB ratings as a guide when comparing financial advisors, though again, the BBB does not guarantee the quality of services you’ll receive from any business. Also, when thinking about hiring a financial professional, it’s important to consider what you need and how much you’re willing to pay for those services.
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