It’s Not What It Was, but BBB Has Gone Back Into Business

Times Staff Writer

Six months after the Better Business Bureau of Los Angeles and Orange counties closed its offices, the bureau’s operation has been revived--albeit in a skeletal form.

With no listing in the phone book and many directory assistance operators still telling callers that there is no bureau, hundreds of consumers a day are calling the 2-week-old bureau.

In a 2,700-square-foot office in Cypress, a staff of 13 workers is once again taking inquiries and complaints from consumers about businesses in Los Angeles and Orange counties.


“The afternoon they were putting in the phones, a hundred calls were trying to get through. I’m not quite sure how they got our number,” said William Mitchell, president of the new Better Business Bureau of the Southland, which is a merger of the ill-fated Los Angeles-Orange counties bureau and Better Business Bureau Inland Cities in San Bernardino County.

The new operation is a far cry from the Los Angeles/Orange counties BBB, which once had a staff of 40 and operated offices in Los Angeles and Irvine before it ran out of money in November.

Membership dues, which reached $1.5 million in 1985, are forecast to be less than $800,000 this year, Mitchell said. And for 1988, the new office will be able to handle fewer calls than bureaus in smaller markets such as San Diego and Santa Barbara.

But after only two weeks in operation, Mitchell said the bureau has taken 7,000 calls, more than he expected.

Seeks to Add Office

“We’ve started what eventually could be the best bureau in the country,” Mitchell said.

Among his goals are to open an office in the San Fernando Valley, handle more than 1.5 million consumer inquiries, complaints or arbitration cases per year, and operate with an annual budget of $3 million.

Mitchell, who proposed merging his Inland Cities bureau with the closed operation last November, said BBB employees in Colton began calling businesses in Los Angeles and Orange counties in February to raise money to start the new bureau.

And now, Mitchell said, “significant membership dues are coming in every day” from businesses in Los Angeles and Orange counties. Dues range from $275 to more than $10,000 depending on the size of the business.

Mitchell said he expects a 40% renewal rate of the estimated 3,000 businesses that belonged to the bureau when it closed last year. Typically, a bureau with ongoing operations has a 65% to 75% renewal rate, according to presidents of several local bureaus.

But the operation faces major challenges in finding support in the business community.

Sour Image

Many business operators said they had a sour image of the BBB even before the bureau exhausted its $700,000 annual budget and laid off all its staff six months ago.

The bureau’s failure was attributed in large part to problems associated with a consumer guide sponsored by the BBB. The book was delivered from 1983 to 1986, when its publisher sought federal bankruptcy protection. Advertisers, who claimed the book wasn’t properly distributed, blamed the problem on the BBB and, as a result, many didn’t renew their bureau memberships.

As the membership roster dwindled to 3,000 from a high of 6,800, operating funds dried up. The staff was cut month by month in 1987, and for hundreds of thousands of consumers who called the bureau every year, getting through on phone lines became a daylong chore.

Mitchell said sales employees for the new bureau are visiting businesses to sign up new members.

No Directory

“We don’t just take anybody’s money. If you join, you need to have a good record,” said Mitchell. He said the new bureau does not plan to sponsor a consumer directory. His Colton bureau was never a sponsor of a directory.

The problems of the troubled Los Angeles-based bureau caused an image problem for other bureaus in the state.

“We had members say to us, ‘You want us to join? But you’re not even open,’ ” said Marge Greene, president of the Better Business Bureau of the Tri-Counties, which services San Luis Obispo, Ventura and Santa Barbara counties.

Other bureaus in the state also took a greatly increased number of calls while the bureau in Los Angeles and Orange counties was closed.

“This takes a heavy load off of us,” said Janet Atkinson, president of the Better Business Bureau of San Diego.