The BBB, or Better Business Bureau, is a nonprofit organization that rates businesses on trustworthiness and helps consumers resolve disputes with companies. It operates through a network of local offices across the United States and Canada, assigning letter grades from A+ to F based on how businesses handle customer interactions. The BBB is not a government agency, and its ratings carry no legal weight, though millions of consumers check them before hiring a contractor, buying a product, or signing a service agreement.
How BBB Ratings Work
The BBB collects information about businesses and translates it into a letter grade ranging from A+ (the highest) to F (the lowest). The rating reflects factors like the number and nature of consumer complaints, how the business responded to those complaints, and the length of time it has been operating. If the BBB doesn’t have enough information about a business, it won’t assign a rating at all.
These ratings are publicly available on the BBB’s website, so anyone can look up a company before doing business with it. A high rating generally signals that a company has few unresolved complaints and has been responsive when problems arise. A low rating usually means the opposite: complaints piled up, went unanswered, or were handled poorly.
What BBB Accreditation Means
There’s an important distinction between having a BBB rating and being BBB-accredited. Any business can be rated, but accreditation is a paid, voluntary membership. Accredited businesses display the BBB seal and agree to follow the BBB’s Code of Business Practices. To qualify, a business must have been operating for at least six months, hold all required licenses and bonding, and demonstrate a history of honest advertising and ethical conduct.
Accreditation fees run roughly $500 to $1,500 per year for small businesses, with larger companies paying more based on their size and number of employees. The fee covers the business’s listing in the BBB directory and the right to use the BBB logo in marketing materials.
Filing a Complaint Through the BBB
One of the BBB’s most used features is its complaint process. If you have a dispute with a business, you can file a complaint on the BBB website, and the organization acts as a mediator between you and the company. Here’s what the process looks like:
- Your complaint is forwarded to the business within two business days.
- The business has 14 calendar days to respond.
- If the business doesn’t respond, the BBB sends a follow-up letter.
- Once the business responds, you’re notified and given a chance to reply.
- If you’re still unsatisfied, the BBB may request a second response from the business or offer mediation or arbitration.
- Most complaints are closed within about 30 calendar days.
When a complaint is closed, the BBB assigns one of several statuses. “Resolved” means you confirmed the issue was handled to your satisfaction. “Answered” means the business responded but you either didn’t accept the response or didn’t follow up. “Unresolved” means the business responded but didn’t make a good-faith effort to fix the problem. “Unpursuable” means the BBB couldn’t locate the business at all.
The BBB has no power to force a company to do anything. It can’t issue fines, revoke licenses, or compel refunds. What it can do is create a public record of complaints, which matters to businesses that care about their reputation. Many companies respond to BBB complaints specifically because unanswered complaints drag down their rating and sit on their profile for other customers to see.
The “Pay to Play” Controversy
The BBB’s credibility took a serious hit after an ABC News investigation found troubling patterns in how accreditation affected ratings. The investigation documented cases where small businesses with C or C-minus ratings were upgraded to A+ within a single day of paying membership fees. In one case, a company with only one consumer complaint paid a $565 membership fee and saw its C grade jump to A+ the next business day. Another company’s C-minus became an A+ one day after paying $395.
The investigation went further, showing that phony companies that paid membership fees received A ratings from at least one local BBB office, while well-known companies that refused to pay dues were branded with F grades based on thin evidence or a small number of complaints. Critics described the system as a “shakedown” that allowed companies to buy their way into a good reputation, undermining the BBB’s core mission of protecting consumers.
In response, the BBB’s executive committee voted unanimously to stop awarding additional rating points to businesses simply for being accredited members. The organization acknowledged the problem and changed its methodology so that paying for accreditation would no longer directly boost a business’s letter grade. Still, the scandal left lasting skepticism among both consumers and business owners about how much weight a BBB rating truly carries.
How Useful the BBB Actually Is
The BBB works best as one data point among several. Its complaint process gives you a structured way to escalate a dispute, and many businesses do respond because they want to protect their public profile. The complaint history on a business’s BBB page can be genuinely useful: if a company has dozens of unresolved complaints about the same issue, that’s a meaningful warning sign regardless of its letter grade.
Where the BBB falls short is as a definitive measure of quality. A business can have an A+ rating simply because no one has filed a complaint, not because it provides great service. Conversely, a busy company with thousands of customers might accumulate more complaints by volume even if its complaint rate is low. And since participation is voluntary on both sides, plenty of legitimate businesses have no BBB profile at all.
For resolving a specific problem, the BBB complaint process is free and sometimes effective, particularly with larger companies that monitor their BBB profiles. For researching a business before you hire them, check the BBB profile alongside online reviews, state licensing databases, and your state attorney general’s consumer protection office to get a fuller picture.