Better Business Bureau leader resigns amid pay-for-play scandal

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William G. Mitchell, the controversial head and 26-year employee of the Southern California chapter of the Better Business bureau has resigned. The company’s director of operations, Bob Richardson, said Mitchell has resigned for health reasons. Three months ago, Mitchell underwent open heart surgery.

The entire national organization of the non-profit business rating has been under attack recently for the use of a rating methodology which gives dues-paying members better ratings than others. The system was created under the leadership of Mitchell within the Southern California operation.

Mitchell helped devised the letter-grade system that has been in use for the last five years. Previously, the organization used a “satisfactory/unsatisfactory” BBB rating.

The Southern California operation was caught in a sting by ABC News handing out top ratings for phony businesses that had signed up as dues-paying members.

Businesses have long complained about high-pressure tactics of BBB employees and that the sales tactics amount to a pay-for-play arrangement.

Last month, the charge was underscored when an ABC News investigative team signed up phony businesses for membership in the Southern California BBB, and immediately received A grades. The investigation also looked at businesses that were not members and had very few unresolved complaints, and found that they were given much lower ratings.

The national organization is currently conducting an audit of operations of the Southern California chapter, according to Alison Southwick, a spokeswoman for the National Council of Better Business Bureaus.  Last month the national operation said it would stop giving better ratings to companies on the basis of dues-paying status.

Mitchell was also heavily criticized for the salary paid to him annually by the non-profit. According to its 2008 tax filing, Mitchell was paid $409,490 that year. His salary was far more than any local heads of the BBB, and greater than the organization’s national president.

Ken Berger of the watchdog group Charity Navigator, which tracks non-profits, said it was important to “shine the light of transparency on questionable salaries.” Earlier he said that Mitchell’s salary was out of line with others within the BBB and at comparable organizations.

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Comment (1)
  1. Eagle Audit Services has done a preliminary audit on the Better Business Bureau (BBB). We found that the following ethics violations apply:

    FAIL: The BBB does not post any complaint made against their own organization on their own website. EAS finds this practice to be completely hypocritical.

    FAIL: The BBB uses its “grading system” as a weapon against businesses.

    FAIL: The BBB uses its “grading system” as a tool of extortion by holding the reputation of businesses “hostage” until the business pays for phony “BBB Accreditation.”

    FAIL: The BBB has given terrorist organizations an “A” rating in exchange for a membership fee. This is a slap in the face of every American – especially to those Patriots who died on September 11, 2001.

    FAIL: The BBB has given a whitehead racist organization an “A+” rating.

    FAIL: The BBB has issued malicious press statements against businesses and business owners that they do not like.

    FAIL: The BBB continues to use the “grading system” to grade businesses while extorting money from countless small business owners while pretending to also represent “consumer interests.”

    FAIL: The BBB operates under a misconception of that they are some sort of “government agency.” No such disclosure is made to consumers, businesses, members of the press or any other organization indicating that this organization is a C Corporation and ran as a “franchise” type of organization in any conspicuous manner. This constitutes a “deceptive business practice.”

    FAIL: The BBB often fails to do a “background check” on businesses prior to giving that business “BBB Membership Acceditation” after payment is received.

    FAIL: The BBB often engages in a civil conspiracy and by issuing bogus “BBB Warnings” against businesses as petty vendetta policy against businesses who expose the BBB for its corrupt practices or files a formal complaint against businesses who have lodged a complaint against the BBB.

    FAIL: The BBB often fails to do a “background check” on businesses prior to giving that business “BBB Membership Acceditation.”

    FAIL: The BBB grading system is so faulty, that most American consumers cannot trust the rating. This is due to the BBB conducting its “Pay to Play Scam” whereby American Businesses must pay to get a higher grade. This “selling of grades” and “failure to execute due diligence” with regard to companies obtaining the phony “BBB Membership Accreditation” undermines the accuracy of those grades and consumer confidence in the BBB’s ability to truthfully rate a business based on other more important factors such as: time in business; time at the same address; website and sales literature content; etc.

    FAIL: The BBB fraudulently (in order to mislead the public) lists themselves in various phone books as a “Government Agency” when, in fact, this is a complete fraudulent misconception of that fact.

    FAIL: The BBB collects moneys directly from businesses by “selling/ramming” the phony “BBB Member Accreditation” and yet masquerades as a consumer protection agency. This represents a clear and present “conflict of interest.”

    FAIL: The BBB fails to do the “right thing” by rescinding their faulty and extortionist “grading system.”

    FAIL: The BBB separate offices do not have a clear or coherent system, mathematical algorithm or homogenious method to produce grades for companies whether or not the companies themselves are members or not.

    FAIL: The BBB does not have (to our knowledge or understanding) any coherent policy on dealing with complaints about or concerning the BBB itself.

    FAIL: The BBB does not have (to our knowledge or understanding) any coherent policy on how staff solicits or collects money or if they adhere to the “DO NOT CALL LIST.”

    FAIL: The BBB does not have (to our knowledge or understanding) any coherent policy on how the bureau dealing with complaints from consumers.

    FAIL: The BBB is not a member of its own bureau.

    FAIL: The BBB does not have any system for verifying consumer complaints or if the complainant paid for a product or service or if the complaint was of a frivolous nature. All incoming complaints are posted regardless of the source or with regard to any type of verification or assessment – especially with regard to any given business PRIOR to posting the complaint on their website. Such a “fair system” needs to be established to make sure that such a website posting is fair and honest to both the business owner and/or consumer.

    FAIL: The BBB often (and many times out of malicious intent) fails to correctly categorize businesses and/or the complaints submitted. If consumers file a complaint filed against a subsidiary’s parent company, the BBB may also apply those complaints to the subsidiary itself without regard to that subsidiary’s type of products or services being offered – even if the business is no longer engaged in a particular line of business.

    Auditor’s Final Comments:

    It is a sad day in America when an organization such as the Better Business Bureau engages in such unconscionable, unethical and immoral conduct by holding ransom – every single day – the reputations of hard working business owners.

    It is my personal belief that a “FFF” grade given to the BBB, for the purposes of this audit, is too kind and generous an action. In fact, I suggest that the BBB be criminally prosecuted to the fullest extent of the law for engaging in extortion and using its grading system as a powerful and COMPLETELY PERVERTED weapon against honest businesses that the BBB completely dislikes.

    Finally, the BBB completely and utterly has failed this audit and their officials need to be held accountable for engaging in such mass corruption on a scale never before witnessed by a “consumer advocate agency” in American History.

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