The Better Business of Bureau of Southwest Missouri has flunked 514 Ozarks businesses, based on new ratings criteria designed to assist consumers by assigning companies letter grades.
While that may seem like a high number, local BBB chapter President and CEO Judy Mills noted that her Springfield-based office oversees businesses in 24 counties, where it has assigned letter grades to more than 6,700 area companies. About 80 percent of those have received A or B grades, according to data provided by Mills.
The bureau's proprietary formula rates each business against 16 weighted factors and spits out the corresponding letter grade. But A-plus ratings are offered only to accredited businesses - those with a paid BBB membership that have been evaluated by the bureau and agreed to uphold its standards, Mills said.
Variables plugged into the algorithm include government actions against a business as well as the volume and seriousness of complaints filed with the BBB, Mills said. Length of operation and general business type also influence a company's rating, she added.
"There are some industries we consider to be scams," Mills said.
At least one critic of the new ratings system, which took effect nationally Jan. 1, said a company shouldn't be penalized for its ties to a certain industry just because the BBB views that industry in an unfavorable light.
"The thing that bothered me most about it initially was that they were going to basically criticize entire categories of business," said Rick Berman, a Washington, D.C.-based communications consultant who thinks the BBB system is too subjective and partial to accredited businesses.
Springfield-area payday and car title loan businesses, for example, fall within an industry that has raised "concerns," according to the BBB, and several received F grades despite a three-year absence of customer complaints or history of resolving complaints.
Berman's public affairs and communications firm, Berman and Co., surveyed several BBB offices throughout the country to find out which specific industries would ensure low marks for businesses. His conclusion: There's no general consensus from office to office.
"The BBB claims negatively assessed 'types of businesses' are based on levels of complaints," Berman wrote in a column circulating online, including at www.consumeraffairs.com. "But none of the offices we contacted named construction, banks or car dealers, the largest complaint industries according to the Bureau's own published list."
A cursory check of ratings for local companies at www.southwestmissouri.bbb.org yielded some puzzling results.
Downtown home decor and gift shop Ampersand received a C, but not because of customer complaints or shady business practices. Rather, the store's average grade stems from the fact that it's only been open since August.
Co-owner Phil Dexter was taken aback by the grade, especially since his partners inquired about BBB membership last fall and were told that Ampersand would only be eligible after a year in business.
"If they're not prepared to acknowledge you until you're a year old, then they can't really rate you until you're a year old," Dexter said. "They can't have it both ways. ... It does sound like the Better Business Bureau is losing its impartiality."
Berman agreed, suggesting length of time in operation can be deceiving.
"Bernie Madoff was in business for a long time," he said.
The flagship Bass Pro Shops Outdoor World store at 1915 S. Campbell Ave. - an accredited BBB member since 1984 - achieved the top rating, an A-plus. In the past three years, however, the bureau processed 29 complaints about the store pertaining mostly to advertising, customer service and delivery issues. Of those, 26 were resolved and the rest were administratively closed by the BBB, meaning the complaints could not be resolved through voluntary dispute resolution methods.
Of the 953 BBB-accredited businesses in southwest Missouri, 679 received an A-plus. Another 252 received an A or A-minus; 20 pulled down B grades; and two accredited businesses earned a C-plus.
Mills said those statistics prove that the bureau does not allow accredited businesses to purchase an A-plus with membership fees, which start at $275 annually and increase based on number of employees. Online seals are available to all BBB-accredited businesses; the annual cost is $90 for companies with one to three employees and increases based on the number of employees.
"You can't just come in here and throw me down a check and say, 'I want to be an accredited business,'" she said. "We have to verify the information that (companies) provide us."
Berman, though, isn't convinced. He said the bureau's decision to move away from its old ratings system, which labeled businesses as "satisfactory" or "unsatisfactory" based on complaint history, doesn't add up.
"I think at the end of the day, there's a money factor here," Berman said. "They are obviously trying to be a bigger player and rival Consumer Reports or something like that, but Consumer Reports doesn't take money from people."
But Mills said the new system is based on consumer responses to a Princeton University survey and in focus groups.
"They said they wanted more meat, so to speak; they wanted more information," she said. "It was basically time to move into the 21st century with our reports."
Springfield bankruptcy attorney Angela Acree, who occasionally arbitrates BBB disputes, said she's proud of her A-plus rating. She co-owns The Bankruptcy Clinic, which has been an accredited BBB member since 2003.
"My BBB rating is important to me, to this company," Acree said. "I think we really are concerned about making sure that we have high standards for customer service."
This story has been corrected. It originally stated that an online seal is only available to the BBB's accredited A-plus members and for a flat fee of $90.
