BBB’s pay racket in Los Angeles lasted for years

I’m not one to say I told you so. But just saying.

The Better Business Bureau of the Southland, which oversaw the betterment of businesses throughout Southern California, was expelled Tuesday from the national organization. It can no longer use the BBB name and logo.

“Over a period of more than two years, BBB of the Southland failed to resolve concerns about compliance with several standards required of BBBs, including standards relating to accreditation, reporting on businesses, and handling complaints,” says Carrie A. Hurt, president and chief executive of the Council of Better Business Bureaus.

In early 2009, I wrote a column looking at whether the BBB gave higher grades to companies that paid subscription fees to the organization, and, by the same token, whether companies that didn’t pay were shortchanged in their ratings.

I cited the example of Wolfgang Puck’s world-famous Spago restaurant. When I checked out Spago on the BBB’s website, I found that it merited only a grade of B-minus, even though the bureau had received no complaints from Spago customers and was unaware of any government actions against the restaurant.

I then checked out a number of other restaurants on the BBB’s site. For example, Cafe Santorini in Pasadena also had received no complaints and had no government actions outstanding. But it enjoyed a BBB grade of A-plus.


What was the difference? Cafe Santorini paid the bureau about $350 a year to be listed as an accredited business. Spago made no such payments and was thus an unaccredited business.

A random search of the BBB’s database of about 4 million North American companies at the time showed that the roughly 400,000 accredited businesses, even those that get numerous complaints, very often received higher grades than unaccredited companies with spotless complaint records.

After my column was published, I heard from numerous businesses claiming that the BBB had all but promised higher grades in return for a little scratch. Other media organizations chased the story, and it soon became clear that SoCal’s BBB had a pay-for-play problem on its hands.

So, hats off to the national organization for waking up and smelling the L.A. chapter’s misbehavior. But here’s a question: Why did it take them four years to take action?

A C-minus move at best.


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