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Terror Group Gets 'A' Rating From Better Business Bureau?

Thursday, November 18, 2010   (0 Comments)
Posted by: Corey Mathews
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Nov. 12, 2010

The Better Business Bureau, one of the country's best
known consumer watchdog groups, is being accused
by business owners of running a "pay for play"
scheme in which A plus ratings are awarded to those
who pay membership fees, and F ratings used to
punish those who don't.

To prove the point, a group of Los Angeles business
owners paid $425 to the Better Business Bureau and
were able to obtain an A minus grade for a non-
existent company called Hamas, named after the
Middle Eastern terror group.

"Right now, this rating system is really unworthy of
consumer trust or confidence," said Connecticut
attorney general Richard Blumenthal in an interview to
be broadcast as part of an ABC News investigation
airing tonight on 20/20.

In an official demand letter sent to the national
headquarters of the Better Business Bureau Thursday,
Blumenthal called on the BBB to stop using its grading
system, which he said was "potentially harmful and
misleading" to consumers.

Click Here To Read Blumenthal's Letter

"The BBB accreditation and the BBB ratings systems is
not about generating money," said BBB national
president and CEO Steve Cox. He said the A minus
grade for Hamas was given in error. "Plain and
simple, we made a mistake," Cox told ABC News.

Errors seem to abound at the Better Business Bureau.
As reported by an anonymous blogger the BBB also
awarded an A minus rating to a non-existent sushi
restaurant in Santa Ana, California and an A plus to a
skinhead, neo-Nazi web site called Stormfront.

Each listing cost $425.

"They ran the credit card and within 12 hours they
were an approved, accredited member," said the
anonymous blogger, who runs a site called
bbbroundup.com.
 
"They're more interested in the money than their
credibility," he said.

The BBB's Cox said the three listings were all mistakes
made by sales people.

"That's an inaccurate statement that business people
are able to buy A's," Cox said. "We have more than
500,000 non-accredited businesses who have A
ratings," he added.

Better Business Bureau: Pay for Play?

Yet, as part of the ABC News investigation, an ABC
News producer with a camera was present as two
small business owners in Los Angeles were told by
Better Business Bureau tele-marketers that their
grades of C could be raised to A plus if they paid
$395 membership fees.

Terri Hartman, the manager of a Los Angeles antique
fixtures store, Liz's Antique Hardware, was told only
a payment could change her grade, based on one old
complaint that had already been resolved.

"So, if I don't pay, even though the complaint has
been resolved, I still have a C rating?"

Hartman then read off her credit card number and
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By JOSEPH RHEE and BRIAN ROSS
Terror Group Gets 'A' Rating From Better Business Bureau?
Consumer Watchdog Accused of Running 'Pay for Play' Scheme With Grading System
 
the next business day the C grade was replaced with
an A plus, and the one complaint was wiped off the
record.

In a second case, Carmen Tellez, the owner of a
company that provides clowns for parties was also
told she had to pay to fix her C- grade, based on a
two-year old complaint that she says had already
been resolved.

The C minus became an A plus the very next day
after she provided her credit card number for the
$395 charge.

"If I'm paying for a grade, then how are the
customers supposed to really trust the Better
Business Bureau?" she asked.

CLICK HERE to follow the ABC News Investigative
Team's coverage on Twitter.

Cox said the examples provided by ABC News were
violations of sales policy and not a standard way of
doing business.

"The BBB is not operating fraudulently," Cox said.

In his demand letter to the BBB, the Connecticut
attorney general said, "I am deeply concerned that
certain BBB practices threaten its reputation and
effectiveness as a reliable resource for consumers."

Allison Southwick, media relations manager for the
BBB, said that the BBB had worked with Attorneys
General across the country, including Blumenthal, to
fight fraud. "We disagree with his characterization
that BBB does not adequately disclose the fact that
Accredited Businesses financially support BBB," said
Southwick. "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," said Southwick.

Better Business Bureau Grading System

The Better Business Bureau, a non-profit group that
began 98 years ago, instituted its A plus through F
grading system just two years ago, replacing a
"satisfactory/unsatisfactory" ratings system.

One of the first to raise concerns about the new
grading system was New York Congressman
Anthony Weiner. Weiner was investigating
complaints to his office about the popular precious
metals dealer Goldine. Some customers had alleged
 
they were ripped off after responding to Goldline's
television ads, which appear in heavy circulation
during conservative talk radio and television
programs.

Goldline responded to Weiner's criticism in part by
pointing to the stamp of approval the company had
received from one of the nation's most respected
consumer groups.

"We are proud to be rated A+ from the Better
Business Bureau," Goldline VP Scott Carter said at a
congressional hearing convened by Weiner in
September.

Weiner told ABC News he considered Goldline's A
plus grade to be suspect.

Weiner and other critics say they believe the BBB has
used the new grading system as part of an extensive
tele-marketing campaign to increase membership
and revenue.

CLICK HERE to follow ABC News Chief Investigative
Correspondent Brian Ross on Twitter.

Ritz-Carlton, Wolfgang Puck Get Fs

An ABC NEWS examination of filings with the federal
government revealed that at least 25 of the Better
Business Bureau's top officers had salaries in excess
of $100,000.

The head of the Los Angeles Better Business Bureau,
William Mitchell, was paid more than $400,000,
according to the Better business Bureau.

"I think the Better Business Bureau changed course
and lost its way by adopting a system of pay to play
that maybe enhanced its revenues but also greatly
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diminished its credibility and honesty," said attorney
general Blumenthal, who was elected to the United
States Senate from Connecticut last week.

"It's very troubling and it could be illegal because
the failure to disclose to consumers could well be
deceptive and misleading," he added.

The ABC News investigation found numerous
examples of well-known companies that are not
members of the Better Business Bureau being
branded with F grades, often apparently based on
scant evidence or a small number of complaints.

The five-star Ritz Carlton Hotel in Boston was given
a F rating after only two complaints.

"A million customers served, two complaints
resulting in an F rating, seems to be somewhat
unusual, to say the least, " hotel general manager
Erwin Schinnerl told WCVB-TV in Boston.

Celebrity chef Wolfgang Puck told ABC News that
parts of his food and restaurant empire have
received an F grade because he refused to pay to join
the Better Business Bureau.

CLICK HERE to follow the ABC News Investigative
Team and Brian Ross on Facebook and join in on the
discussion.

"You know, if you become a member, you're sure to
get an A, but if you don't pay, it's very difficult to
get an A," said Puck, who has been a regular on the
ABC News program "Good Morning America" since
1986.

"I think where you have to join an organization to
get a good grade is wrong," Puck said.

Click Here for the Blotter Homepage.

 
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