Better Business Bureau to review rating system

LOS ANGELES — The Better Business Bureau, which has been under fire for boosting the ratings of businesses that became dues-paying members, said Thursday that it would alter its rating process.

“For nearly 100 years, the BBB has stood for public trust, and we are taking these steps to maintain that trust,” said Steve Cox, chief executive of the Council of Better Business Bureaus in Washington.

“Given the feedback, we feel it is our duty to take immediate steps to address the concerns raised and enhance our ability to help consumers easily and quickly find trustworthy businesses,” Cox said.

The nonprofit organization said it would review its accreditation practices and the way it deals with complaints against businesses. It said it would bring in a third party to assist in its review.

Last week, ABC News reported that a group of Los Angeles business owners that had been critical of the BBB pulled a sting operation by paying dues for fake companies, including one named after the Palestinian organization Hamas, which the U.S. government considers a terrorist group. The fake businesses were accepted by the BBB and given ratings, according to the report. “Hamas” got an A-minus.

The letter-grade ratings, which the organization’s site says reflect whether businesses are “operating in a trustworthy manner,” are based on a variety of factors, including complaints lodged against businesses and how long they have been operating, BBB spokeswoman Alison Southwick said. The fact that a business was willing to become what it termed an “accredited” member of the organization was considered a factor in its favor, she said.

“We’ve never hidden the fact that one of the factors that goes into your rating is whether or not you’re accredited,” Southwick said Wednesday. “The reason we gave points for accreditation is that accredited businesses are vetted, and they agree to uphold our standards.”

The organization apologized for accepting the fake businesses.

Joe Ridout, spokesman for the advocacy group Consumer Action, said the BBB would have to change its practices if it wanted to keep the public’s trust.