BBB Rates Staples F, Office Depot A-. Why? Office Depot Pays Dues

Source:  http://ctwatchdog.com
Author:  George Gombossy
Date:  Nov 24, 2010

One of the starkest examples of how the Better Business Bureau’s two-year-old letter grade system rewards dues paying accredited members and punishes those who refuse to pay, is the difference in ratings consumers see when they check the BBB website to purchase office supplies.

When consumers look up Staples at BBB.org the see that the Framingham, Ma., firm has an F rating and is not an accredited BBB member.

When consumers look up its competitor, Office Depot, they find that the Boca Raton based firm has a high A- rating.

The BBB insists that paying dues will have little impact on a firm’s grades and deny critics’ claims that it changed from its 96-year-old satisfactory/unsatisfactory rating system to letter grades as a way to pressure businesses to pay up.

However, comparing the statistics of the two office supply companies makes it difficult to accept the BBB assurances.

Staples had 833 complaints in the last three years with the BBB while Office Depot had 1,369 complaints.

One major strike against Staples is that the BBB claims that it did not respond to 23 of the complaints. That doesn’t mean that Staples did not deal with those complaints, it simply means that the BBB has no record of them being satisfied.

However, there is no known government investigation or action against Staples.

With Office Depot, BBB website lists recent actions by Missouri, and Florida:

On April 29, 2010 the Missouri State Attorney General announced a consent judgment against Office Depot Inc. for alleged violations of Missouri’s Merchandising Practices Act. The Attorney General’s investigation discovered issues with overcharging Missouri government and non-profit customers. The charges included, misrepresenting cost savings and failing to be forthcoming about such cost savings in their ads and sales pitches. Under the judgment Office Depot is to pay $320,000 in restitution and $120,000 to reimburse the state for the cost of the investigation and enforcing the Missouri Merchandising Practice Act.

The court issued a permanent injunction prohibiting Office Depot from violating the Missouri Merchandising Practice Act and suspend a $100,000 penalty contingent on compliance with the terms of the judgment and permanent injunction.

On June 4, 2010 Florida Attorney General Bill McCollum announced that his office has negotiated a settlement with Office Depot, Inc. regarding allegations that the company overcharged governmental agencies and non-profit organizations for office supplies in violation of the Florida Deceptive and Unfair Practices Act.

Under the settlement, Office Depot will pay approximately $4.5 million in refunds to eligible Florida customers, including Florida government agencies. According to an investigation, Office Depot allegedly switched certain local governmental agencies and private non-profit organizations in Florida from one pricing plan to another without their full understanding or knowledge, potentially resulting in higher prices for those customers.

In addition to the refunds, Office Depot will reimburse the Attorney General’s Office for its investigative costs and for costs associated with ongoing and future enforcement actions. Office Depot also agrees to comply fully with the Florida Deceptive and Unfair Trade Practices Act. Office Depot entered into the Assurance of Voluntary Compliance without any admission that they have violated the Florida Deceptive and Unfair Trade Practices Act or any other law.

The BBB report made no mention of a Dallas Morning News report from last year that says that officials in Texas, Georgia, California, Nevada, North Caroline and Alabama were looking into similar issues against Office Depot.

BBB Responds To Criticism

Steve Cox, the president of the 120 chapter Better Business Bureau Council in the U.S. and Canada, last week conceded that the BBB chapter in Southern California made mistakes.

In response to a devastating ABC TV 20/20 investigation this month on his organization (which did not mention the office supply stores), Cox now says that errors were made – unintentionally – and that reforms will take place.

Connecticut Attorney General Richard Blumenthal launched an investigation into the Connecticut BBB chapter after he was embarrassed by it when he attended its annual program with a company being honored for its high integrity, that turned out later to be a sham.

Cox, as the result of the push back, agreed to take away the four extra points (out of 100)  that the BBB gives to businesses that pay annual fees ranging from $300 to the millions, depending on their size.

What Cox however failed to address was  the most damaging and telling part of the ABC investigation, which proved that businesses COULD BUY better grades – not just a couple of points – by simply joining and paying annual dues.

That went way beyond the formation of fake businesses like Hamas (which last summer got an A- rating), which the traditional media just learned about.

The critical part was about two small businesses in California that had C ratings, even though they only had one complaint between the two of them.

ABC filmed the two owners calling up the BBB and asking how their grades could improve on the BBB website, which lists and grades hundreds of thousands of businesses.

Simple, was the answer. Pay $425 in annual does to become accredited BBB members.

Forget about all the promises that Cox and others in the BBB said two years ago when they changed the satisfactory/unsatisfactory grading system to an A+ to F ratings. Cox then insisted that the BBB would evaluate every business on 16 criterias and would thoroughly investigate all accredited members to make sure they deserved their grades.

As soon as the charges cleared the credit cards, the two businesses suddenly had their C ratings skyrocket to the top A+ and the one complaint disappeared from the website.

I would love for the BBB to explain to me how their tinkering would have avoided those clearly Pay To Play proven and unchallenged incidents.