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Better Business Bureau Calling ...
Founded: In 1912 as a truth-in-advertising watchdog.
Organization: Non-profit -- 142 offices in North America operate as franchises under oversight of the Council of Better Business Bureaus in Arlington, Va.
In Florida: Five offices -- Pensacola, Jacksonville, Orlando, Clearwater and West Palm Beach.
Credo: The majority of marketplace problems can be solved fairly through voluntary self-regulation of business and consumer education.
Top duties: Business reliability reports; dispute resolution; truth-in-advertising; consumer and business education; a "Wise-Giving Alliance" that evaluates charities.
On the web: The BBBOnline is one of the top business-reliability programs on the internet.
Membership costs: Vary office to office but start at $300 and can range upward of $1,000 a year depending on how many employees a company has.
Roger Brunswick, president of J&M Air Conditioning of Fort Myers, has a complaint about a company's telemarketing. But Brunswick can't call the Better Business Bureau about it -- the BBB is the company that's annoying him.
Brunswick, a former BBB member, complains that he's been "besieged" by telemarketers from the non-profit organization's branches in Clearwater and West Palm Beach trying to get him to renew his membership. He says the BBB has kept calling even after he asked them to stop. He also believes the BBB, an organization devoted to ethics and honesty in business, uses a misleading telemarketing pitch. "I think they are making up information to get me to join the Better Business Bureau," Brunswick says.
The BBB employees who pitch membership in the organization use a carefully worded script informing business owners that membership is "by invitation only.'' The script refers to "positive interest we have in your company" and says the invitation comes "because of this activity" and "the fact that we have no unanswered complaints on file against your company" ("The Script," below).
The script leaves unclear what "positive interest'' and "this activity" mean. As for "invitation only," the BBB welcomes any qualifying business owner who calls an office or signs up on a BBB website. In any event, the "invitation only" pitch hardly results from a rigorous selection process based on a company's business practices. In fact, BBB telemarketers get leads on companies anywhere they can, according to sources familiar with the west Florida BBB operation -- in the Yellow Pages, even on their way to work when they see business phone numbers on the sides of pickup trucks along U.S. 19.
Another part of the script says the west Florida office receives "roughly 2,000 calls a day," most from consumers seeking reliability reports on area businesses. The number appears exaggerated: Using the west Florida office's own numbers, combined consumer inquiries and complaints over the past five years would average about 775 a day.
Brunswick and some other owners, as well as University of Florida business professor Robert W. Emerson, say the script can leave the impression that the BBB is calling because of consumer inquiries into the business. Emerson, who teaches students about the ethical issues involved in getting one's foot in the door to make a sales pitch, reviewed the entire BBB telemarketing script and called it "problematic."
"People can pretty quickly draw some erroneous conclusions," he says. "There are definitely better ways to make this pitch."
Telemarketing is not the first problem for BBBs in Florida, which is home to five of the nation's 142 Better Business Bureau franchises. In 1997, the national council that oversees local BBBs shut down the south Florida office because of poor management and high debt ["Watch Dog Turns Lap Dog," October 1997, FloridaTrend.com].
That prompted some former employees of the south Florida BBB Fort Myers branch to form a competing consumer-protection group. After a legal wrangle with the BBB over use of the name Better Business Council, the group now calls itself Consumer Fraud Awareness. Its founder, D.J. Petruccelli, president of the Greater Fort Myers Beach Chamber of Commerce for the past 17 years and a former board member of BBB chapters in Indiana and Florida, is so disenchanted with the BBB that he calls it "despicable."
Increased competition
Petruccelli sees the telemarketing as an attempt by some BBB franchises to maintain membership in the face of competition from local non-profit organizations like his and government agencies that provide similar services more cheaply. One competitor, Angie's List, founded in Ohio seven years ago, charges a membership fee to consumers and uses their referrals to rank businesses. That group is now in 12 major metropolitan areas, including Tampa Bay. Meanwhile, the Florida Department of Business and Professional Regulation offers a successful Alternative Dispute Resolution Program that has awarded consumers more than $4 million in its four years of existence.
Sandra Schofield, who runs Consumer Fraud Awareness, says she has received more than 100 complaints from southwest Florida business owners about the BBB's practices. Several owners, Schofield says, complain that BBB telemarketers tell them they're calling because of consumer inquiries into their companies, then pitch membership. Other owners say the BBB led them to believe it had an office in their city when, in fact, the closest BBB offices are in Clearwater and West Palm Beach.
"The BBBs clearly don't want us here, yet they won't open an office here because they think they can rake in money without one," Schofield complains. "But you cannot be in Clearwater and know what's going on locally in Fort Myers, in Naples."
Petruccelli says many of North America's 142 BBB offices continue to do good work. But he believes that the franchise structure and loose oversight by the National Council of BBBs allow some offices too much rein. "In my opinion, they are totally focused on selling memberships and don't seem to care about (potential members') reputation," he says.
Response
The BBB script in question was written by John Ponder, a former marketing executive for the BBB of Detroit and Eastern Michigan who started his own firm, JP Marketing Associates of Northville, Mich., to help BBBs around the country beef up membership. BBB employees in the west Florida, Jacksonville and Orlando offices use Ponder's scripts and services, including training. The southeast Florida office writes its own telemarketing scripts, and the BBB's Panhandle office relies on traditional sales visits to businesses.
Ponder maintains that his scripts are honest and ethical. He says it's crucial to get across vital information about the BBB's mission at the beginning of the call. He wrote the "positive interest" line, he says, to reassure business owners who feared the BBB was calling because of consumer complaints. Ponder says he's now cut that sentence from all BBB scripts in favor of a new line that says: "We're calling in regard to your company's business record with the bureau."
Pat White, president of the BBB's Clearwater office, where she's worked since 1975, canceled an in-person interview for this report and would respond only to written questions. She said her branch began using telephone solicitors in 1988. "The cost of doing business today is considerable, and even though we're non-profit, we must maintain our budget demands and service to stay in business," she wrote. The west Florida office has nearly 5,000 members and handled 1.3 million consumer inquiries over the past five years, according to White.
As for competition, White pointed out that the BBB's mission "is very different from law-enforcement, government and private consumer organizations. Our name recognition is a plus, and our retrieval of information from inquiry calls and complaints is shared with many organizations and provides cases for government action. No one of us is the answer in every case, and the cooperative effort is vital in the marketplace today."
Ron Berry, senior vice president of the Arlington, Va.-based Council of Better Business Bureaus, acknowledges that his members face more competition and costs these days. Nationwide, membership continues to grow between 4% and 8% a year, he says, but consumer calls to BBBs are growing so much faster that membership dues are lagging operations costs in some markets.
As a result, some franchises employ telemarketing to boost membership, while some others now charge consumers -- via 900 numbers or fees -- when they check on companies or file complaints. Berry says the majority of the 142 franchises do not use telemarketing but that "a growing minority" have found it more effective and efficient than the in-person visits traditionally used by the organization.
The national council has telemarketing ethics guidelines that all offices must adhere to, though he admits he's received a few business complaints about some offices' tactics over the years. "We realize that telemarketing is a legitimate form of marketing," says Berry. "It's as honest a way to get in the door as any that I know of -- as long as it's true."
Meanwhile, Berry says that an unprecedented amount of fraudulent business practices around the nation makes the BBBs as essential as they were when founded nearly 100 years ago. "As far as I'm concerned, there is more than enough mediation and arbitration around for everybody," Berry says. "There will be plenty for us all to do."
THE SCRIPT
Here's the introductory part of a telemarketing script being used by BBB employees in some parts of Florida. The BBB recently reworded the part of the script that refers to "positive interest."
"This is _____ with the Better Business Bureau. I'm calling as a result of some positive interest we have in your company. At the BBB, we receive roughly 2,000 calls a day.
"Most of these calls are from prospective customers who call to get a Better Business Bureau reliability report on a company before they do business with them.
"Basically they want to make sure that the company they intend to deal with is honest and ethical and that they are going to be serviced properly. Because of this activity and the fact that we have no unanswered complaints on file against your company, I have been authorized to invite you to apply for membership into the Better Business Bureau. However, I do need to make one thing clear -- membership in the Better Business Bureau is by invitation only."
