Date: April 1, 2010
By: JR Adams
Article Type: Press Release
Source: Mechanics Responds F-Team
Title: The Shocking Grading Practices of the so called “Better” Business Bureau Exposed
Firm A: 2,000 complaints. Firm B: 2,000 happy customers.
Which Firm Did BBB rate B+ and Which Firm Was Rated D-?
The Shocking Answer Will be Revealed Below…
When one firm has 2,000 complaints and another firm has 2,000 happy customers, which firm would be rated higher with the BBB? The Mechanic’s Responds Investigation Team was stunned when we recently discovered the answer so we decided to investigate further.
[Editors' note: we have taken shots of the websites and converted them to PDF in case there are changes to the website after this story hits. References in the body of the story to links that display these PDF documents refer to links listed at the end of this article]
First, we will start with Conn’s, Inc. This firm operates a retail chain throughout three states: Texas, Louisiana and Oklahoma. According to Conn’s Website, it has over 3,000 employees and 69 retail locations. (Link A – Conn’s Website)
In May of 2009, the Attorney General of Texas dropped a bomb on Conn’s and sued them for a variety of violations of Texas’ consumer protection act. The Attorney General stated that they had received over 2,000 complaints about Conn’s behavior. (Link B – Texas AG Initial) The actual complaint listed over 3,500 consumer complaints. The Mechanics Responds Investigative Team thought this was a large amount of complaints and wondered what their grade would be with the BBB. So, in May of 2009, we looked on the BBB’s website and found Conn’s had an A+ rating. Is it possible over 3,500 people complained straight to Texas Attorney General and not BBB? Is it possible that the BBB had just not gotten around to changing their grade yet?
We put this issue on the back burner and moved on to other investigations.
Then, in November of 2009, we heard that Conn’s had settled their dispute with the Texas Attorney General (Link C – Texas AG Settle) but we decided out of an abundance of caution to wait until March of 2010 to check on Conn’s new grade. This 3-month plus window would give the BBB time to fully analyze Conn’s settlement and do the right thing.
In March 2010, the Mechanics Responds Investigative Team looked on the BBB’s website for the grade on Conn’s Inc., and saw the following:
“BBB processed a total of 2,699 complaints about this company in the last 36 months, our standard reporting period. Of the total of 2,699 complaints closed in 36 months, 1,134 were closed in the last year.” (Link D – Conn’s Grade) Wow! That means from March 26, 2009 to March 26, 2010, 1,134 complaints were closed. Thus, by using simple math, 1,565 complaints were closed from March 26, 2007 to March 26, 2009. The BBB does not disclose how many occurred each year but one thing is clear: 42% of all Conn’s Inc.’s closed complaints in a three-year period occurred in the last twelve months.
Then, we looked at Conn’s BBB grade: B+. (Link D – Conn’s Grade) We thought: “Well, if that’s the case, a whole lot of businesses are going to at A and A+.”
So we looked at another retailer in Texas, Academy Sports & Outdoor. (Link E – Academy Store Numbers & Link F – Academy About Us) Academy is based in Katy, Texas, a few miles from Conn’s headquarters in Beaumont, Texas. Academy has stores in the same three state as Conn’s and also in 8 more states like Texas (79), Louisiana (13), Mississippi (2), Alabama (10), Georgia (3), Tennessee (2), Oklahoma (6), Arkansas (3), Florida (1), Missouri (1), South Carolina (2). That’s eleven states total. That’s 122 stores. Compared to Conn’s it looks like this:
Conn’s States: 3 Stores: 76 Employees: 3,000
Academy: States: 11 Stores: 122 Employees: 13,000
Surely Academy has tons of complaints and tons of consumer issues like Conn’s. Right?
The Mechanics Responds Investigative Team went to the BBB website and found this on Academy:
“BBB processed a total of 8 complaint(s) about this business in the last 36 months, our standard reporting period. Of the total 8 complaint(s) closed in the last 36 months, 1 was closed in the last 12 months.” (Link G – BBB Academy Complaints)
Once we were brought back to life and the doctor cleared us, we had a computer firm check our web browser to make sure this was correct.
One complaint in the last year? Are you freaking kidding me???
And that means 7 complaints in the previous two year period spread over 122 stores!
Whatever Academy is doing is incredible for a retail firm with 122 stores. Academy must be providing great customer service to have that few complaints. The BBB must be so very proud there are good companies like Academy out there treating the customer right. This is going to be an easy A+.
We decided to scroll up to Academy’s grade and see……..what th……&*!@$%#!
Academy has a “B-” rating from the BBB. Something is wrong!
As the paramedic put away the defibrillator paddles and we came back to life for a second time, we checked the BBB’s website again and realized we needed more computer help………..
Well the computer guy just left and in fact this is correct. Academy has a lower grade than Conn’s. Thankfully, on BBB’s Academy score sheet, the BBB lists the following devastating reasons for the lower grade:
“Based on BBB files, this business has a BBB Rating of B- on a scale from A+ to F.”
The two reasons BBB gives for this rating are: “8 complaints filed against business; BBB does not have sufficient information to determine how long this business has been operating. BBB does not have sufficient background information on this business.” (Link G – BBB Academy Complaints)
Hmmmm. Not only the 8 complaints bother the BBB but the lack of information on Academy bothers the stringent BBB analysts. Good catch by the BBB. A fly-by-night company like Academy thinks they can fly right under the radar, bop right into 11 states, quickly set up 122 retail stores and hire 11,000 folks without anyone noticing? They ain’t gonna put anything past the BBB. These vigilant folks just have no information on this company. No sir! Fair enough.
So, the Mechanic’s Investigative Team went back to look looked at Academy’s website to see if we could get some information about this under-the-radar company the BBB has no information on.
Academy’s website clearly lists under “About Us” that they have been in business since 1956! (Link F – Academy About Us)
Hmmmm. That’s 54 years. That’s not really under the radar. Was the radar even invented in 1956?
Academy’s site goes on to state they have been growing since the 1980′s. It says the company has over 13,000 employees. The website even has a separate section detailing how to reach them. (Link H – Academy Contact Us) What is the BBB doing here? This is not the fly-by-night company the BBB seems to allege in their “reason” list. What is the missing piece we are not seeing that separates Conn’s B+ from Academy’s B-?
Since we are an Investigative Team, we decided to do a search on Academy Sports and Outdoor to see if they had received the attention of any Attorney Generals and Bingo! A hit.
Yep….it appears Academy has been dealing with the Attorney General. (Link I – Code Adam Participants) Academy is on a long list of retailers working with the Attorney General to implement Code Adam which is a program from the National Center for Missing & Exploited Children. Conn’s is not on that list. That is something that is different than Conn’s.
But wait a minute. Code Adam is a good thing to help find missing and exploited kids. Surely the BBB would not rank Academy lower because of that? Let’s keep looking for that missing ingredient that one company has and the other does not.
Then we found another company that has 2,000 happy customers documented on their website with hand written letters and photographs.
Mechanic’s Heating and Air Conditioning, LLC has been working for years to document their happy customers. Apparently, their customers really like Mechanic’s service and expertise. Mechanic’s Heating and Air Conditioning even states that they have become “…the most trusted name in Air Conditioning, Heating and Home Comfort.” The BBB must like that because the BBB also states they “Start with Trust.”
So we searched for governmental action on Mechanic’s Heating and Air Conditioning, LLC and found nothing. Zip. Zero. Nada.
Then we checked Code Adam and guess what? Mechanic’s Heating and Air Conditioning, LLC is not on the Code Adam list. So, if that is factor the BBB considers is negative, Mechanic’s Heating and Air Conditioning, LLC will be higher than Academy for sure.
Then we went to the BBB to see what Mechanic’s Heating and Air Conditioning, LLC BBB rating is. (Link J – BBB Rating of Mechanic’s March 2010) Mechanic’s Heating and Air Conditioning, LLC has a D-.
With over 2,000 happy, documented online customers? What’s up with this picture?
Mechanic’s gave us their rating from June, 2007 which showed Satisfactory. (Link K – BBB Rating of Mechanic’s June 2007) Then, a few months later it dropped to Unsatisfactory. We asked Mechanic’s management why this happened and they told us that the BBB had called them and asked if they were willing to pay the BBB to become an Accredited Company. According to Mechanic’s they declined to pay. Next thing they know, their rating was lowered to unsatisfactory. A coincidence?
When the BBB switched to the grading system, Mechanic’s Heating and Air Conditioning, LLC received an F.
At one point, as Mechanic’s accumulated documented happy customers online and sent email after email to the BBB telling them about these happy customers, the BBB changed Mechanic’s grade to a C. (Link L – BBB Rating of Mechanic’s February 2010). But as inexplicably as they had raised the grade, a few days later they lowered it to D-. (Link J – BBB Rating of Mechanic’s March 2010)
We looked carefully at the BBB score sheet on Mechanic’s and it states Mechanic’s has had no governmental action. This confirms what we found above and this is the same thing we found with Academy. We looked at the BBB’s score sheet on Mechanic’s again to see their complaints. They number 55 in three years and only 11 in the last 12 months. This amount is certainly higher than Academy’s and much lower than Conn’s and of course, Mechanic’s is a much smaller firm than either of those two guys but really……..a D-?
One would think Academy would be the highest with Mechanic’s behind them and Conn’s the lowest. Instead, the results are as follows: Conn’s B+, Academy B- and Mechanic’s D-. Why are both Academy and Mechanic’s lower than Conn’s? What do Academy and Mechanic’s have that Conn’s doesn’t have?
Then it hit us: The question is actually the opposite of what we should be asking. See if you can guess:
Conn’s B+ Complaints: 2,699 Attorney General Action: Yes BBB Accredited: Yes
Academy B- Complaints: 8 Attorney General Action: No BBB Accredited: No
Mechanic’s D- Complaints: 55 Attorney General Action: No BBB Accredited: No
There you have it. Conn’s is Accredited. And the BBB says they have been Accredited since 1963. That means Conn’s Inc. was Accredited through the rough last three years of 2,700 complaints with the BBB and 3,500 compaints with the Texas Attorney General. We thought about that for a minute.
Conn’s Inc. is publicly traded and the BBB is a nationwide firm. We looked up the business days in a year and what Wall Street uses is 252 business days. So we divided that into Conn’s 2,699 complaints over three years and got 3.6 complaints each business day.
Imagine, the BBB employees coming into work each business day for the last three years and yelling: “Hey we got another 3 more complaints on Conn’s!”
Then the next day: “Hey another 4 freaking complaints on Conn’s.” Just imagine the stress on those poor BBB employees dealing with these angry consumers each day. Think about it. Conn’s is on their lips every day. Academy is on their lips once every six months. No wonder the BBB knows so little about Academy. And the BBB certainly is not hearing from any of Mechanic’s 2,000 happy customers.
But what does it mean to get Accredited? How tough are the BBB standards? Is this like some obstacle course from An Officer and a Gentleman that a business must hurdle to get Accreditation from the BBB? After all, if a good company like Mechanic’s Heating and Air Conditioning, LLC with 2,000 happy customers and who held a BBB satisfactory rating in June of 2007 as well as a good company like Academy Sports and Outdoors with only 8 complaints in the last three years can’t get accredited, this accreditation thing must be like a Mount Kilimanjaro. Right?
According the BBB’s website, a business has to do several things. (Link M – BBB Accreditation Requirements 1)
1. The business must actually apply to be accredited.
2. The BBB then must determine if the business meets their tough, rigid Accreditation Standards.
3. And the business must pay a fee to the BBB.
Here it is: Apply…….then BBB Determination………………..and then Pay.
Let’s unwrap each of these.
First, the business must apply for accreditation. We were not able to determine if Academy had applied for accreditation but Mechanic’s Heating and Air Conditioning, LLC says the BBB called and asked them to pay to become accredited. Certainly, according to Mechanic’s, they did not call the BBB to ask to join. It’s possible the BBB could claim that Mechanic’s was only asked to apply and there was no guarantee of Accreditation so there are some possible semantic issues there. But since the BBB “Starts with Trust,” wouldn’t they be likely to call only businesses they thought had a decent shot at getting Accreditation?
And to go a step further since the first thing the BBB starts with every morning they get up and go to work is……..TRUST, wouldn’t the BBB simply state on either Mechanic’s or Academy’s rating page that “this firm has never applied for accreditation” or “The BBB solicited this firm for Accreditation and this firm rejected this solicitation” or “This firm has previously applied for accreditation but after they were weighed and measured, they were found wanting.”? (Or something more professional) Maybe the BBB hasn’t thought of something like that…………yet.
Let’s move on.
Next, the BBB requires a business to meet their tough Accreditation standards. Well, one thing’s for sure, a firm like the BBB that “Starts with Trust” must set the bar incredibly high for someone to achieve this rock-hard Accreditation.
Let’s look at some of these forged-steel Accreditation standards.
1. Establish and maintain a positive track record in the marketplace. (Link N – BBB Accreditation Requirements 2) That sounds like a worthwhile standard. Academy has sure met that standard with few complaints over three year. Mechanic’s appears to have done that with 11 complaints in the last 12 months (or less than one per month) and over 2,000 happy customers documented online. But what about Conn’s positive track record? They have 2,699 complaints in the last three years and paid over $4.5 million to settle the Texas Attorney General’s complaint. I guess if you are looking for a “positive” spin, they did settle the Attorney General Action. That’s positive. And both numbers 2,699 and $4.5 million are in fact positive numbers versus negative numbers. At least that’s something. Let’s keep looking at the Kevlar-like Accreditation standards.
2. Be free from government action that demonstrates a significant failure to support BBB ethical principles in marketplace transaction. Who can argue that that’s not a good standard to have? We certainly don’t want businesses that have had trouble with the government being Accredited by the BBB. No sir! The BBB even mentions the word “ethical” in this Accreditation standard. This sounds like something to separate the boogers from the finger.
Well, both Academy and Mechanic’s meet this requirement. It says right on the BBB’s rating page for each of these companies that neither has had any governmental action. What about Conn’s?
Ooppps…..They had a big action with the Attorney General in Texas. Over $4.5 million in settlements and over 3,500 complaints. How did Conn’s meet that rigid BBB nongovernmental standard? The BBB adds in brackets “(this requires a determination by BBB as to the nature of any violation, whether it was caused or condoned by management, and actions taken to resolve underlying issues that led to the government action). On another section of BBB’s website the grading system states that the BBB classifies the governmental action as either Major, Moderate or Minor. (Link O – BBB Ratings Overview) Obviously, the lower the classification by the BBB the better the overall grade. The BBB rating page of Conn’s does not state how they classified Conn’s governmental action (Major, Moderate or Minor) but surely the BBB would count this as a major violation. Right?
On another part of the BBB’s grading and scoring system, it does clearly state that if a business is Accredited by the BBB, that business scores higher all the way up to A+. A business that is not accredited can only achieve an A. But doesn’t the BBB make the Accreditation first then determine once they are Accredited whether or not the business gets the bonus bump? Hmmmmm.
Let’s looks further at the next BBB Accreditation standard.
3. Follow federal, state/provincial and local advertising laws. Again, there have been no legal violations by Academy or Mechanic’s we could find. Conn’s? The Texas Attorney General stated: “The defendants are charged with using high-pressure sales tactics to deceive customers about their extended service warranties,” Attorney General Abbott said. “Texas law contains important protections to prevent vendors from misleading customers about their goods and services. Today’s enforcement action reflects a concerted effort to ensure the defendant is held accountable for violating the law.”
When Conn’s Inc. settled with the Texas Attorney general, the AG then stated: “Under its agreement with the state, Conn’s must remedy its high pressure sales tactics, refrain from misleading customers about extended warranties, and fully honor the warranty agreements that it sells to customers. By redressing of improper conduct and setting aside restitution, this agreement benefits past, present and future Conn’s customers.” The AG went on to state on its website: “Finally, the agreement requires Conn’s to compensate customers who were harmed by its unlawful content. As a result, Conn’s must pay $4.5 million to establish a customer restitution fund. Today’s agreement also requires Conn’s to pay $250,000 in attorney’s fees and $100,000 to the University of Houston Consumer Law Clinic.”
Ouch! A quarter of million dollars for the other side’s attorney’s fees for about six months of legal wrangling. And $4.5 million to pay back customers. Man that’s some big coinage. Imagine how far that cash would go if you took that money and instead rewarded the hard working employees at the BBB who had to wade through 3 of Conn’s complaint on Monday, Wednesday and Friday and 4 of Conn’s complaints on Tuesday and Thursday for the last 3 freaking years? Some gift cards here. Some massages there. Things like that to help those poor folks. That would be wonderful.
But back to the analysis.
It’s hard for us to see how this is not a Major violation under the BBB’s tough, rigid standards. And it’s hard to see how this is not failing to “follow federal, state/provincial and local advertising laws” as the BBB requires. Really, the Attorney General used words like “misleading customers” and “improper conduct.” That doesn’t sound like the “ethical principles” the BBB states in their Accreditation standards. Does it? Can you honestly say the conduct of Conn’s Starts with Trust?
The BBB lists another standard the business must comply with and it is the Code of Advertising. (Link P – BBB Code of Advertising) It has a section on warranties which states: “Sellers or manufacturers should advertise that a product is warranted or guaranteed only if the seller or manufacturer promptly and fully performs its obligations under the warranty or guarantee.” But isn’t that exactly what the Texas Attorney General hammered Conn’s, Inc. for? How did Conn’s Inc. get around that big chimichanga?
That brings us back to the money. Always follow the money. Remember, Academy and Mechanic’s do not pay the BBB for Accreditation. Only Conn’s does. But what kind of fee does the BBB charge Accredited firms? Is it one price fits all or is it based on something else?
Because they “Start With Trust” every morning they wake up and go to work, the BBB states on their website: “Like most standards-based organizations that provide accreditation, we charge a business for the time and costs associated with reviewing and monitoring their organization. As a result, we are able to provide many important and valuable services to all consumers free of charge, such as BBB Reliability ReportsTM.” (Link Q – BBB How They Get Paid)
There you have it. The BBB must cover their time in reviewing and monitoring the organization. With Conn’s level of complaints, how high would that fee be? How many folks would you have to hire just to be dedicated to that one company? Could Conn’s Inc. even afford that fee?
Let’s see…they just paid short of $5 million bananas to settle with Texas. In Conn’s Inc. recent Annual Report filing, they list over $800 million in total revenue for fiscal year ending in January 2010. Would they have enough to cover the costs of the BBB to thoroughly monitor Conn’s?
But there is one final hurdle a company must go to get BBB Accredited. The BBB must determine that the company meets a certain grade. If the company does not meet that grade, it won’t matter how much money they have, how many people they know or how many tears they shed. They simply cannot become an Accredited BBB company.
Let’s see what the BBB says about the minimum grade needed on the tough BBB scoring to get Accreditation.
“……maintain at least a B rating…..” (Link N – BBB Accreditation Requirements 2)
What parent could argue with requiring a B from their kid? B sounds fair to us so let’s apply it to these three companies Academy, Mechanic’s and Conn’s.
Sadly with Academy’s 8 complaints in three years and Mechanic’s 2,000 online happy customers, they both fell short of the tough, fair-minded BBB graders, analyzers and bean counters. And talk about just missing it……….Academy missed by a smidge at B-. Ahhhh. Too bad!
But on the other side of the coin it’s a Festivus miracle! Like a three-point basket at the buzzer, Conn’s slid in just above the B rating with a B+. Thank god because now the BBB can legally take Conn’s Accreditation fees (aka money) and everyone is happy. Even the consumer is thrilled because it gets $4.5 million from Conn’s to make everything alright. Don’t you just love a good ending?
And one final apparent benefit of Accreditation. When you click on Conn’s BBB listing to find a location near you, a special BBB page pops up with that store’s location. (Link R – BBB Single Page of Conn’s) Each of Conn’s BBB pages we looked at fails to mention the 2,699 complaints in the last three years except one page, Conn’s main office in Beaumont, Texas. If you happen to live near that one, then you will see all these complaints. Otherwise, you will see the complaints of the local store and have no inkling as to the 2,699 complaints.
Wow! That’s pretty nice of the BBB. After all, they do “Start With Trust”!
[Editors Note: The BBB states on their website that even though the BBB has :
a. reviewed the business;
b. monitored the business;
c. checked any governmental actions;
d. determined that the business meets the BBB's tough Accreditation standards and
e. accepted the business' money,
"The BBB accreditation does not mean that the business’ products or services have been evaluated or endorsed by BBB, or that BBB has made a determination as to the business’ product quality or competency in performing services." Huh????? Are you kidding me?!!] (Link S – BBB Does Not Condone)
For further documentation, See these Supporting Links that confirm the Grading Hypocrisy of the BBB Below: