Interview: What Is the BBB and How Does It Work?

Written by Andy Stauffer

September 5

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We recently interviewed the Director of Business Development for the Southern Colorado BBB. Hopefully these can help answer some of the questions and misconceptions you may have about the Better Business Bureau and what Accreditation means. Stauffer & Sons Construction has an “A+” BBB rating, and we’re happy to say that we have zero complaints against us.

Question: How exactly is the BBB structured? Is there just one Nationwide Better Business Bureau Database, or do you have local offices?

Answer: The Better Business Bureau of Southern Colorado is governed by the Council of Better Business Bureaus (CBBB). The CBBB governs all the BBB’s in the US and Canada.  Colorado has four locations. The Better Business Bureau of Southern Colorado services 25 counties in southern Colorado.

Question: Is the BBB run by the government? Or are you a nonprofit?

Answer: The BBB is not affiliated with the US Government. Contrary to popular belief, the BBB is not a regulatory or legal agency.  Your second guess was right–the BBB is a nonprofit, neutral, third party organization whose mission is to create confidence and trust in the marketplace for both consumers and businesses.

Question: What is it exactly that the BBB is looking for when checking on a contractor?

Answer: When a business applies for BBB Accreditation, they must meet certain qualifications and commit to upholding the BBB Code of Business Practices. Our staff then verifies that the company has been in business for a specified length of time, has a physical location, maintains their industry’s required licensing, and can substantiate their advertising. The BBB team also checks the company’s references they provide.  The final approval of BBB Accredited Businesses is given by our local BBB Board of Directors who actually live and work in the community.

Question: Just about everyone knows that the BBB is a “complaints center” for consumers with bad business experiences, but what is the “BBB Accreditation” you’re referring to?

Answer: It is true that consumers and businesses can file complaints businesses with us. However, we’re not just looking at the fact that a company has a complaint filed against them–we’re interested in how that business handles it. One of the factors that distinguishes a BBB Accredited Business from an unaccredited business is that a BBB Accredited Business has committed to working through these issues with consumers or other businesses. If a BBB Accredited Business is concerned that someone is going to file a complaint, they can proactively contact the BBB. When that happens, we will call the consumer, as a neutral third party, and can sometimes get to the bottom of a conflict before a complaint is even filed. We are often able to re-open lines of communication between parties.

Question: One concern we’ve heard several times from homeowners is “I’ve heard that the BBB is just a club that anyone can join by filling out an application and paying yearly fee.” Is there any truth to this?

Answer: No. Businesses have to be eligible for accreditation. Companies must complete the application process and be approved by both the BBB staff and the Board of Directors. There is no guarantee that completing an application will result in accreditation.

Question: Can you tell us some of the important differences between a company that is not “BBB Accredited,” and one that is?

Answer: Sure. There are obviously good businesses in our service area that are not accredited. BBB Accreditation demonstrates the trustworthiness that a business has already earned. The benefit of BBB Accreditation is that consumers recognize that Accredited Businesses have been ‘checked out first.’ Because of the high consumer recognition of the BBB brand, BBB Accredited Businesses gain marketplace exposure that they may not get otherwise. Often, a savvy consumer will check references on a contractor prior to entering into a contract in the first place, however, many consumers do not. Consumers who choose not to do their own research recognize that the BBB has already done that work for them. The BBB verifies who the company says they are. The BBB checks on the company’s references, verifies current licensing and insurance requirements for the type of work the company does, and keeps a database of information showing how the company works with their customers. We don’t add any trustworthiness to an existing business–we just recognize the trustworthiness the company has already earned by how they do business. BBB Accreditation gives them a greater presence in the marketplace.

Question: Are there companies who aren’t eligible to become an accredited business?

Answer: Yes, there are a few things that may prevent a contractor from becoming accredited. Some include: not being in business long enough; they may have outstanding, unanswered complaints; and/or for a larger company or franchise, if their corporate headquarters has an “F” rating with the BBB. (This is the worst possible BBB rating a business can receive).

Question: When a homeowner hires a contractor to work on his or her home, he or she is taking a potentially vulnerable step in doing so. Generally, remodeling work is done during daytime hours, when people are at home. The construction industry, unfortunately, is notorious for being a place where criminals seek employment. Does the BBB do a background check on a company to ensure that the remodeling company representative who shows up to a homeowner’s front door isn’t a criminal?

Answer: No. We do not do any formal criminal background checks, and cannot guarantee that a contractor doesn’t have a history of run-ins with the law.  We do require that our applicants disclose any legal issues they’ve been involved in over the years. We do reference checks and check public records.  You’d be surprised–through our basic checks, staff reviews, and approval process by our BBB Board of Directors, we have uncovered many issues that have prevented companies from being accredited. As a nonprofit, we have limited resources, but do as much as we can to ensure that an accredited contractor’s reputation is solid. Ultimately, it’s up to the homeowner to do their due diligence and make an informed decision. As previously mentioned, we’re constantly educating the public. We provide tips on hiring reputable companies, and remind them to do their homework before doing business with a company and being cautious about who they let into their homes.

Question: In the construction industry, there are, unfortunately, a lot of “fly by night” startup companies that stay in business for a few months, do shoddy work, stiff their customers, and then go out of business and start a “new company” with a different name. Does the BBB catch companies involved in these “serial startups”?

Answer: As much as we can, yes. However, we have two limitations on this: 1) we depend on local companies registering their company through the official channels which would make their information public, and 2) we are dependent on other businesses and consumers to file a complaint on a company when they have had a bad experience. If a consumer reports on a ‘serial startup’ or files a complaint with a contractor who happens to be a fly-by-night operation, we’ll have that information in our database. “Serial Startups” with unanswered complaints cannot become a BBB Accredited Business. We keep track of companies based on who their owners are. Consumers are then able to read reports on the companies previously owned by that person. Consumers can also visit our “Consumer Alerts” section of our website, where we alert the public to common scams in our area, and trends in suspect and fraudulent business practices that we’re seeing. Visit for more information.

Question: If a homeowner has a bad experience with a contractor, can he or she still file a complaint with the BBB even if the company they’re complaining about is not accredited?

Answer: Yes, consumers can file a complaint about any business–whether they’re BBB Accredited or not.  BBB Accredited Businesses commit to answering and working with their customers. Unfortunately, when a complaint is filed against an unaccredited businesses, that business has not committed to our policy of resolving conflicts, which leaves us with little recourse, which of course is why consumers prefer to do business with Accredited Businesses in the first place.

Disclaimer: the views, opinions, and positions expressed on this blog post do not necessarily reflect the views or opinions of Stauffer & Sons Construction and are not intended as legal or professional advice. All information deemed reliable but not guaranteed. For more information, please review our website terms of use.


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