BBB Changes Its Business Ratings to A+ Through F Letter-Grade Scale

1/6/2009

BBB Will Use a 16-factor Formula - Making it Easier for Consumers to Find Trustworthy Businesses

Washington, DC – Today, the Better Business Bureau (BBB) announced it is launching improved versions of its BBB Reliability Reports(tm), which include a more detailed A+ through F letter-grade replacing the previous ratings scale of "satisfactory" or "unsatisfactory" Nationwide, the BBB provides reports on more than four million businesses, all online and free of charge at www.bbb.org . New letter-grades are prominently displayed on business reports to help consumers more easily and quickly identify and compare the reliability of businesses.

The BBB's new letter-grade concept was first developed by BBB Colton (Los Angeles), and has been test marketed effectively by Colton and several other BBBs (New Mexico, Santa Barbara, Asheville and West Palm Beach). That original concept, with modifications recommended by a national BBB committee, is the basis for the approach announced today, and is part of the BBB's ongoing commitment to making it easier for consumers to find trustworthy businesses.

    The BBB's proprietary ratings formula takes into account 16 weighted factors, using objective information and actual incidences of a business's behavior that have been verified and evaluated by BBB professionals. Ultimately, a letter-grade rating represents the BBB's degree of confidence that a business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns. Specific issues affecting a business's rating are described in detail in the BBB Reliability Reports(tm). Ratings factors are:
  • The type of business and its business model
  • How long the business has been operating
  • Whether the business has appropriate competency licensing
  • Total volume of complaints filed against the business
  • The number of unanswered complaints
  • The number of unresolved complaints
  • The number of serious complaints
  • An overall complaint analysis
  • The number of complaints with delayed resolution
  • Government actions against the business
  • Any advertising issues found by BBB
  • The extent of background information available to BBB for evaluation
  • The extent to which BBB is able to develop a clear understanding of the business
  • Whether the business has honored any mediation/arbitration commitments
  • Whether the business has attained BBB Accredited Business status
  • Whether the business has had its BBB Accreditation revoked

Rating factors also take into account BBB's opinion as to whether business models and industries operate in violation of the law, misrepresent products and services, and are likely to generate trade practice concerns and/or have high levels of customer dissatisfaction. Both BBB Accredited Businesses and non-accredited businesses in BBB's database will receive a letter grade as part of their report.