The BBB has devolved into a racket

[Puppycow]

This article (http://www.slate.com/id/2277100/) explains.

I wonder what libertarians think about this.
The BBB is, or used to be, a prime example of the of voluntary market-based solutions that make govrnment regulation unnecessary. I don't want to overstate the case. It really did work in the past I think.

And Consumer Reports seems to work, but unlike the BBB, consumers pay for consumer reports, not businesses. The BBB has a similar problem to the rating agencies: the people it rates are also the people who pay for it.

[The Central Scrutinizer]

Interesting.

I've also never found Consumer Reports to be of any value.

[paiute]

Interesting.

I've also never found Consumer Reports to be of any value.

CR has paid for itself many times over the past few years. When I am in the market for something (recently, vacuum cleaner, chainsaw, washing machine, dryer, dishwasher, etc.), I always check CR's Best Buys and their list of things to consider when buying a particular item. Just on the vacuum alone, I ended up spending $150 or so to replace an old model whose updated version went for upwards of $400. The one I bought is still working. I passed it along to a family member and bought another one just like it. That one is still working as well.

I disregarded their recommendations about chainsaws. Went to Home Depot and bought a $130 unit to replace the old Mac that was so old I couldn't get parts anymore. The new one started up fine. One week later, it would not. Took it back, got a Husqy from a local shop as per CR's advice. It starts with ease every time.

So, yeah. CR is totally worth it.

[CriticalThanking]

I've also never found Consumer Reports to be of any value.Since BBB does not "advertise" here, they have no "enforcement authority", I never gave the little plaques in the stores any thought or look for them when doing business. I am disappointed they might do something like this.

As for CR, I do like that they explain their evaluation criteria. I can narrow down my choices based upon the features that are important to me. I no longer subscribe, but about once every other year, I make some big purchase and CR helps me narrow down my options while giving me an idea on pricing.

CT

[The Central Scrutinizer]

CR has paid for itself many times over the past few years. When I am in the market for something (recently, vacuum cleaner, chainsaw, washing machine, dryer, dishwasher, etc.), I always check CR's Best Buys and their list of things to consider when buying a particular item. Just on the vacuum alone, I ended up spending $150 or so to replace an old model whose updated version went for upwards of $400. The one I bought is still working. I passed it along to a family member and bought another one just like it. That one is still working as well.

I disregarded their recommendations about chainsaws. Went to Home Depot and bought a $130 unit to replace the old Mac that was so old I couldn't get parts anymore. The new one started up fine. One week later, it would not. Took it back, got a Husqy from a local shop as per CR's advice. It starts with ease every time.

So, yeah. CR is totally worth it.

It's probably been 20 years since I've looked at one, but my main complaint back then was they were always too focused on how much something cost. Model A is $300, while model B is $500. They would recommend Model A, even though model B was clearly superior.

[Almo]

It's probably been 20 years since I've looked at one, but my main complaint back then was they were always too focused on how much something cost. Model A is $300, while model B is $500. They would recommend Model A, even though model B was clearly superior.

That's changed.

[Spindrift]

This article (http://www.slate.com/id/2277100/) explains.

I wonder what libertarians think about this.
The BBB is, or used to be, a prime example of the of voluntary market-based solutions that make govrnment regulation unnecessary. I don't want to overstate the case. It really did work in the past I think.

And Consumer Reports seems to work, but unlike the BBB, consumers pay for consumer reports, not businesses. The BBB has a similar problem to the rating agencies: the people it rates are also the people who pay for it.

I had a recent experience with BBB protecting what I view as a scam artist. A volunteer organization I work with got an 'invoice' in the mail for "web-site listing services" of $200+. The treasurer of the non-profit was going to pay the invoice but she happened to mention it to me. Of course the service had never been requested. I asked for the invoice and said don't pay it, I will take care of it.

I filled out BBB's online complaint form saying it was a scam and they were getting unsuspecting people to shell out $200 for nothing. The response was that the company had no one with my name in their database. I had included my name as a contact along with the name of the non-profit to which the invoice was mailed. I told them to look under non-profit name. The response this time was that the company removed them from their mailing list and BBB considered the matter closed. I responded that the company was perpetuating a scam and the BBB wasn't going to do anything about it? No response. I was appalled and now after reading that article I'm convinced that the BBB was covering for a member.

[keale]

Im a former employee of the BBB and in the location where I worked the staff from the bottom to the CEO was top notch as far as ethics and implementation of BBB guidelines. That being said the BBB is independently run from state to state and city to city so I have no knowledge of how others locations were run.

I was there for the implementation of the new ratings system. We had long meetings regarding the pros and cons and overall efficacy of the the ratings system. There were several systems proposed and many different BBBs in different states tried the various systems with ratings like A or in others systems AAA or BBB and they all had a different formula to award points for said score. The main reason that businesses get a higher score for membership is that BBB guidelines for membership is that you sign a contract to follow all BBB rules and guidelines and promptly answer all complaints in writing. In addition the BBB will look at all licensing to make sure its all legit and we also would cross check with other state agencies for any violations or complaints against the business and any violations would result in a denial of membership. There are also categories of businesses that got an automatic denial like debt settlement and loan modification to name a few because of the inherent problems with said businesses.

[corbin]

Big surprise - private businesses are forced to please the consumer (and thus operate efficiently and with good will towards the customer) if they want any market share.

"Public" (fancy way of saying paid for with stolen money) entities are not subject to this regulatory mechanism of individual purchasing power because the force of coercion eliminates competition. Additionally, consumers are not given a choice in whether to pay the entity or not, making the entity accountable only to a few bureaucrats who may not always have the customers best interest in mind. Really, what people buy should be left up to the individual.

[The Central Scrutinizer]

Big surprise - private businesses are forced to please the consumer (and thus operate efficiently and with good will towards the customer) if they want any market share.

"Public" (fancy way of saying paid for with stolen money) entities are not subject to this regulatory mechanism of individual purchasing power because the force of coercion eliminates competition. Additionally, consumers are not given a choice in whether to pay the entity or not, making the entity accountable only to a few bureaucrats who may not always have the customers best interest in mind. Really, what people buy should be left up to the individual.

Somehow, I get the feeling this post makes sense to you. :crazy:

[corbin]

Somehow, I get the feeling this post makes sense to you. :crazy:

With which part do you disagree? Or is it just totally incomprehensible to you... lol?

Consumer purchasing power is a well known economic concept... at least argue intelligently against it if you disagree.

[DC]

Really, what people buy should be left up to the individual

sure not in all cases, when something endangers others then its legality should be regulated.

[corbin]

Because inanimate objects are going to hurt people?

People should be punished if they do something wrong, not the entire population just to prevent risk.

[The Central Scrutinizer]

With which part do you disagree? Or is it just totally incomprehensible to you... lol?

Consumer purchasing power is a well known economic concept... at least argue intelligently against it if you disagree.

I have no idea what you are blathering on about.

That makes two of us.

[corbin]

So why did you even post?

You could have just admitted that you know nothing about economic theory.

[The Central Scrutinizer]

So why did you even post?

You could have just admitted that you know nothing about economic theory.

Are you looking in a mirror?

[blutoski]

I had a recent experience with BBB protecting what I view as a scam artist. A volunteer organization I work with got an 'invoice' in the mail for "web-site listing services" of $200+. The treasurer of the non-profit was going to pay the invoice but she happened to mention it to me. Of course the service had never been requested. I asked for the invoice and said don't pay it, I will take care of it.

I filled out BBB's online complaint form saying it was a scam and they were getting unsuspecting people to shell out $200 for nothing. The response was that the company had no one with my name in their database. I had included my name as a contact along with the name of the non-profit to which the invoice was mailed. I told them to look under non-profit name. The response this time was that the company removed them from their mailing list and BBB considered the matter closed. I responded that the company was perpetuating a scam and the BBB wasn't going to do anything about it? No response. I was appalled and now after reading that article I'm convinced that the BBB was covering for a member.

I wonder if they publish their member list so you could verify?

Another thought, though, is that the BBB isn't the authorities, so there's only so much they can do to a member who is accused of fraud. If you pursued it and they were convicted, this would certainly impact their standing - or even eligibility. But at this point, they're just dealing with an accusation or a pattern of accusations.

Realistically, the BBB does have some conflict of interest that inflates their incentive to maintain crappy members, especially if they're entangled with other services and technically customers. I'm thinking of businesses that use the local BBB chapter's for-profit collection agency, mediators, resold utilities &c. Paradoxically, a shifty business may be more valuable to the BBB.

[DC]

Because inanimate objects are going to hurt people?

People should be punished if they do something wrong, not the entire population just to prevent risk.

no way, to many irresponsible people around.

[Dorian Gray]

You pay to belong to BBB, and they rate you. It's in their best interests to keep you paying, so it's in their best interests to grade you lightly.

On the other hand, Consumer Reports not only accepts no advertising, they have people go and buy off-the-shelf (or off-the-lot) items as if they were consumers, totally randomly and without warning, so they're rating the same products that you would buy, not some souped up model specifically for rating. The ratings they give are unbiased (monetarily or ethically), and are trustworthy.

Then you've got Amazon and other online stores, who are only trustworthy when there are a large number of reviews. I don't know what the magic threshold is, but I've found that below about 30, some of the 5 star reviews read more like press releases than reviews from a regular customer. At the same time, some of the 1 star reviews are merciless and sound like they're from competitors. When you get to, say, 3-400, it's pretty accurate. But I've read some great reviews, and then been swayed not to buy something by a zinger negative review.

[roger]

It's probably been 20 years since I've looked at one, but my main complaint back then was they were always too focused on how much something cost. Model A is $300, while model B is $500. They would recommend Model A, even though model B was clearly superior.I remember that - I read an article on pasta and tomato sauce. Apparently pasta quality and taste didn't matter, you just look at how much you get in a box.

I'm glad to hear it changed, but with google I don't feel the need. I was also shopping for chainsaws recently, googled it, and came up with husky pro as the best choice (the consumer ones break down or have parts that aren't easily replaceable or something, I forget what), and a $500 Makita is surprisingly good (I've used it and would have to agree)

[Mr. Purple]

no way, to many irresponsible people around.

I have to disagree. Crimes should be prosecuted, not potential crimes.

[DC]

I have to disagree. Crimes should be prosecuted, not potential crimes.

no, i am very happy not every car is allowed on our streets for example. we dont talk about crimes or potential crimes, we talk about potential risk that is reduced by regulations.

[UNLoVedRebel]

Because inanimate objects are going to hurt people? Yes. Such as a vehicle not meeting certain standards can hurt people, even exluding parts like brakes. If you don't think government should regulate vehicles, go take a breath of fresh air in Mexico City.

[imjohn]

I remember that - I read an article on pasta and tomato sauce. Apparently pasta quality and taste didn't matter, you just look at how much you get in a box.

It's hard to quantify taste and quality, subjective criteria, hence the emphasis on quantity and price in that type product.

[Neally]

The BBB has been largely irrelevant for a number of years. It's much easier to get feedback on local businesses from the various feedback sites on the net.

[tyr_13]

I don't know about the BBB, but my only real complaint about CR is that they tend to be a couple months behind in TVs, computers, and cameras. People misuse CR all the time, that that isn't the fault of Consumer Reports.

[Twiler]

Big surprise - private businesses are forced to please the consumer (and thus operate efficiently and with good will towards the customer) if they want any market share.

"Public" (fancy way of saying paid for with stolen money) entities are not subject to this regulatory mechanism of individual purchasing power because the force of coercion eliminates competition. Additionally, consumers are not given a choice in whether to pay the entity or not, making the entity accountable only to a few bureaucrats who may not always have the customers best interest in mind. Really, what people buy should be left up to the individual.

In what way are public entities paid for with stolen money?

[lomiller]

The BBB has been largely irrelevant for a number of years. It's much easier to get feedback on local businesses from the various feedback sites on the net.

Beware of product information on the web. Many companies routinely pay people to frequent various forums and chat rooms to give favourable commentary and “advice” regarding their products, or unfavourable commentary regarding their competition.

[blutoski]

Beware of product information on the web. Many companies routinely pay people to frequent various forums and chat rooms to give favourable commentary and “advice” regarding their products, or unfavourable commentary regarding their competition.

I've had to read a pile of objective independent 3rd-party analysis of this problem as part of my role supporting social media strategy for my employer.

There are so many problems with online anonymous product reviews that it appears more likely to misinform than inform the prospective consumer, all things being equal.

It's so cheap and anonymity gives the perception of no risk, so many businesses consider fudging reviews to be a no-brainer.

[The Central Scrutinizer]

It's hard to quantify taste and quality, subjective criteria, hence the emphasis on quantity and price in that type product.

Which is why, for me, CR is of no use.

[roger]

It's hard to quantify taste and quality, subjective criteria, hence the emphasis on quantity and price in that type product.
Cooks Illustrated and the like have no problems dealing with this.

And, the article very directly said that taste does not matter in pasta. Not "we can't test for it".

[Giggywig]

I don't know about the BBB, but my only real complaint about CR is that they tend to be a couple months behind in TVs, computers, and cameras. People misuse CR all the time, that that isn't the fault of Consumer Reports.

I just bought a camera for Christmas. I had picked a couple based on review sites, then I checked the current CR which included camera reviews. They didn't even include this year's models of the cameras, they had a bunch that had an update out. But combined with Amazon reviews I managed to pick a camera I'm so far happy with. I find "the most helpful critical review" at Amazon to be one of the best guides around. They usually say why they lowered the score, and I can decide if that's something I can live with.

[The Central Scrutinizer]

Cooks Illustrated and the like have no problems dealing with this.

Exactly. They even take a stab at combining the two (price vs quality) into a couple of "Best buys" (or something like that).

[Neally]

I've had to read a pile of objective independent 3rd-party analysis of this problem as part of my role supporting social media strategy for my employer.

There are so many problems with online anonymous product reviews that it appears more likely to misinform than inform the prospective consumer, all things being equal.

It's so cheap and anonymity gives the perception of no risk, so many businesses consider fudging reviews to be a no-brainer.I've seen plenty of attempts to game the review system. Still, careful research and reading the reviews is far better than just looking to the BBB for company feedback. The BBB won't do anything if you are looking for specific product information, unless the company only produces a single product.

[keale]

The BBB has been largely irrelevant for a number of years. It's much easier to get feedback on local businesses from the various feedback sites on the net.


Im curious if said consumer feedback sites will check to see if a business is properly licensed? Or if they will check various state agencies for complaints against businesses? Will they verify complaints and give a business a chance to respond? Do those websites offer mediation? IF there is evidence of criminal conduct do those websites have a working relationship with the Police, FBI, FTC and DA so that they can pass that information to be acted on by the appropriate agency?

[fuelair]

It's probably been 20 years since I've looked at one, but my main complaint back then was they were always too focused on how much something cost. Model A is $300, while model B is $500. They would recommend Model A, even though model B was clearly superior.

Even if always true, they gave you sufficient information to make your choice even if you did not agree. It's the information that makes them useful. The reccomendations are fine, but only an idiot would buy everything only on that basis.

As a different version, I buy a lot of books and videos through Amazon. On the basis of those purchases, Amazon recommends other books and videos for me. Because their system cannot evaluate WHY I purchased the ones I did, I purchase only 5-6% of the recommended. The rest are pointless (60-70 %) or I already have them (they only note items I have bought through Amazon itself, they apparently do not record what you buy through Amazon sellers for recommendation purposes).

[The Central Scrutinizer]

Even if always true, they gave you sufficient information to make your choice even if you did not agree. It's the information that makes them useful. The reccomendations are fine, but only an idiot would buy everything only on that basis.

I can get sufficient information from plenty of other places too. I don't think I'll be subscribing anytime soon.

[fuelair]

So why did you even post?

You could have just admitted that you know nothing about economic theory.

I do Corbin and he makes an excellent point. You MAY know economic theory, but your phrasing makes that very unclear. By the by, I would
(I say would because I got bored with the requirements and switched fields - but the requirement did get me into calculus and finance and economics and marketing all of which I loved - made the mistake of writing, on an accounting exam (the question, approximately, was: Why are you taking this class? My answer was: Because it is a requirement to get through the MBA program. I do not plan to be an accountant, I plan to hire them.) [admittedly it had been a bad day and I was tired, but it was true]. So, I switched back to education and science.)
know that because I almost finished my MBA.:D

[fuelair]

Exactly. They even take a stab at combining the two (price vs quality) into a couple of "Best buys" (or something like that).

And, in the weapons field, : http://www.gun-tests.com/

never the slightest regret or problem with their bests and other recommendations. Not cheap, but is great!!:):):)

[JoelKatz]

This article (http://www.slate.com/id/2277100/) explains.

I wonder what libertarians think about this.
The BBB is, or used to be, a prime example of the of voluntary market-based solutions that make govrnment regulation unnecessary. I don't want to overstate the case. It really did work in the past I think.

And Consumer Reports seems to work, but unlike the BBB, consumers pay for consumer reports, not businesses. The BBB has a similar problem to the rating agencies: the people it rates are also the people who pay for it.I think both models could work. The BBB just demonstrates that the 'business pays' model can also fail.

The only product the BBB has is their own reputation. If they provide unreliable information, then they no longer serve any purpose and the amount of money they can charge decreases. This creates that downward spiral.

However, other companies doing similar things have avoided this downward spiral. Underwriters Laboratories is a good example. OK Kosher Certification is another. It likely helped that these are not for profit organizations.

Demand for independent certification, of course, helps makes these businesses more likely to succeed. Libertarians envision a world where this demand would be much higher than it is in our world. If businesses need to convince customers that their products are safe to get them to buy, then the companies too have an incentive to find a way to do that.

Of course, if there becomes a problem with bogus rating organizations, we can just create an organization to rate rating organizations. That organization can use the consumer pays model.

[blutoski]

The only product the BBB has is their own reputation.

I'm not sure this is entirely true... the BBB here in the Lower Mainland has a whole slate of products, some even available to non-members.

The one I used most was their collection agency. They also offer payroll contracting, merchant visa, resold long distance and now also local phone service and internet. Discounts on ESSO fleet gas price. Life insurance, disability insurance... as far as I can tell, the 'product' is the package of benefits in the membership.

Their reputation is part of their branding, but as a small business, I really wouldn't care as long as I kept getting my membership benefits. If their reputation really craters, I can scrape the decal off my front door and keep getting that competitive rate for merchant visa.

[kevinquinnyo]

All industries in a market must have successes and failures. Ratings agencies, like any other industry are not immune to failure and competition. And there is more parity/competition in the "ratings/consumer review" market than ever before. With more and more people having access to the internet, and more and more sites like Yelp, Amazon, - honestly, there are too many to list, not to mention forums, youtube video reviews, etc.

I think both models could work. The BBB just demonstrates that the 'business pays' model can also fail.


Exactly.


[...]
Of course, if there becomes a problem with bogus rating organizations, we can just create an organization to rate rating organizations. That organization can use the consumer pays model.

Well, isn't that what 20/20 and Slate have accomplished? Here we are talking about it...

Here's a silly example of that concept, different industry:

Fantasy Football. There are a million podcasts, blogs, forums, chat rooms, all full of "Experts" that will tell you who to sit/start in a given week of FF. So how do you know who to trust and who to ignore? There is a site called FantasyPros.com that does exactly what you say: They rate the raters. Every week, the experts accuracy is calculated, and their year to date ratings are posted. You can then narrow down whose advice you would like to take, based on only the experts with the highest ratings, or you can bet on the miracle of aggregation, and just take everyone's opinion averaged. It's completely up to you who you listen to and who you don't.