The Better Business Bureau's system of rating companies is being criticized by the Connecticut Attorney General's as being not much better than a "pay-to-play" scheme that rewards companies that pay BBB dues with higher scores - and punishes those that don't with lower ones. And tonight, an ABC News investigation that airs on 20/20 looks deeper into those allegations.
In a demand letter sent to the BBB on Thursday, Richard Blumenthal's office, while acknowldeging that the BBB has "a long and laudable history of consumer advocacy", says that the BBB's system of giving higher scores to companies that pay anywhere from $450-$5,000 in the state of Connecticut for membership - is "potentially harmful and misleading to consumers". He says that businesses that pay dues receive four extra points that non-BBB businesses don't receive.
He also expressed concern that the BBB has granted "good-business awards based on inadequate research and judging criteria." He cited an instance where a Connecticut business was awarded the BBB's torch award and then soon after filed for bankruptcy and was criminally prosecuted. The AG thinks that the BBB lacks the manpower to properly investigate the companies it rates.
The ABC investigation describes a group of Los Angeles business owners who - unhappy with the BBB -tried to prove just that. After paying $425 to the Better Business Bureau the owners were able to obtain an A minus grade for a non-existent company called Hamas, named after the Middle Eastern terror group.
In a statement the BBB sent us today: "We disagree with his (Blumenthal's) characterization that BBB does not adequately disclose the fact that Accredited Businesses financially support BBB. However, we are always interested in hearing from our partners in consumer advocacy and are pleased to accept constructive feedback from his office and other consumer advocates. We have made good progress in working with his office on these issues, and anticipate that we will satisfactorily address his concerns."