Who is bbb

It is not. It is, in fact, a business membership organization with chapters spread across the country. The BBB does offer consumers a way to communicate with a business and voice their concerns via a third party, but they are ultimately unable to force a business to do anything. Moreover, not all businesses have BBB accreditation, which can cost many hundreds of dollars per year.

Businesses without this accreditation are less likely to communicate with consumers through the BBB versus those who have a paid membership. And just because a business is responding to you through the BBB doesn't necessarily mean that you'll get anywhere. Satisfactory membership in the BBB generally involves the paying of a membership fee and responding to consumer complaints in a timely manner. There are no stipulations that a business do anything to resolve a complaint or address the complaint a particular way.

Some consumers report that responses from companies through the BBB are often short and do nothing to address their issues. Of course, every situation is different. Some consumers have successfully arbitrated through the BBB and others have seen satisfactory complaint resolution. And it's not just paying members that receive high ratings even though they are facing government actions -- non-member businesses were also on CNNMoney's list.

But the BBB claims to keep a closer eye on its paying members, holding them to a higher standard. In many cases, more weight is placed on companies addressing complaints through the BBB's own system than any other factor -- even government lawsuits alleging practices that directly violate the BBB's principles of membership like misleading advertising. Meanwhile, consumer lawsuits aren't factored into grades at all, no matter how many there are against a single company. And when it comes to government actions, the BBB sometimes deems a penalty so minor that a company can still maintain its A rating.

Military Credit Services of Norfolk, Virginia, for example, recently settled government charges that it went after service members with illegal debt collection lawsuits.

In other cases, government actions don't appear to be factored into the grade at all -- possibly because the BBB isn't aware of them.

And in cases where the action is still pending, the BBB often leaves the grade untouched and notes that no wrongdoing has been proven. The organization also acknowledges that grades are based on the information it has at the time -- making it extremely difficult to provide accurate ratings for more than 4 million companies nationwide.

Related: How the Better Business Bureau rakes in millions. Here's how this massive ratings machine works: The BBB rates companies ranging from small town plumbers to Wall Street banks.

Nearly , of these businesses are paying members -- which the BBB relies on for the majority of its revenue. But not every business is eligible -- before granting membership, the BBB says it does extensive research and has a laundry list of requirements that prospective members must meet, like responding to all consumer complaints, advertising honestly and maintaining at least a B rating.

It says that grades are calculated using more than a dozen factors, including the type of company, length of time in business and complaint volume in relation to its size. In return, members get to flaunt their membership with the BBB, use its name and logo in advertising and gain access to free dispute resolution services.

While many people view the BBB as a consumer watchdog or even a government agency, the BBB itself says this is a misconception. Instead, it views itself as a mediator between frustrated consumers and the companies they do business with, receiving nearly 1 million complaints each year from consumers hoping to achieve resolutions like refunds and repairs.

These complaints are handled by more than independent bureaus across the country, which are overseen by the national Council of Better Business Bureaus. The BBB touts its work with law enforcement agencies to shut down fraudulent companies and insists that money has nothing to do with the grades it gives to paying members.

It is also proud of the complex algorithm it uses to grade companies -- the inner workings of which it closely guards. While some businesses likely deserve their bad ratings and others are worthy of their A grades, even the BBB will admit its rating process isn't perfect. It says that its ratings are not endorsements and that they don't mean that a business' products or services have been evaluated. Instead, the organization told CNNMoney in a written statement that the ratings represent the "BBB's opinion about a business's trustworthiness and how it is likely to interact with its customers.

Yet, millions of American consumers are counting on them to be reliable and reputations of businesses all over the country are depending on them. He notified the BBB about the ruling but says the organization still did nothing to help or warn other consumers by including the ruling against Jack's on its website or factoring it into its grade. So DiPiero turned around and sued the BBB itself, alleging that the nonprofit violated consumer protection laws by allowing paying members to retain membership and high grades even when they broke the organization's own rules.

But judges threw out his case because no consumer transaction took place between DiPiero and the BBB, and the state supreme court declined to hear the case.

The owner of Jack's, Jack Tilka, blamed a personnel issue and said he regrets that Jack's didn't do more to resolve DiPiero's grievances sooner. But he says he tried to offer DiPiero a full refund during court proceedings.

The BBB has come under fire for allegations of unfair ratings and unethical practices in the past. In , the Connecticut Attorney General likened its membership program to a "pay to play" scheme after a local bureau gave an annual award for business ethics to a company that was under investigation by his office.

Around the same time, the BBB's biggest bureau in Los Angeles was accused of selling its top ratings. Here's a closer look at how the BBB works—and what its limitations are. The bureau also provides consumer education and offers several programs aimed at helping businesses adopt best practices.

The BBB collects revenue through corporate memberships, which allows it to provide consumers access to its directory of business profiles at no cost. Through its website , individuals can look up specific businesses or browse providers in a particular industry.

Each profile contains basic information about the company, including its address, phone number, and number of years in operation. These ratings are based on a variety of factors, with some components being weighed more than others.

Each business is awarded or deducted points for its performance in 13 distinct areas, with a total possible score of The most heavily weighted factors include the number of unresolved complaints and unanswered complaints for the business, the type of business, failure to honor mediation or arbitration, and the presence of any government actions against the company.

The numerical score is, in turn, converted to a letter grade. BBB recommends that consumers consider a business's BBB rating in addition to all other available information about the business.

While these ratings are intended to help users make better consumer choices, the BBB does not actually recommend specific businesses. Another important role of the Better Business Bureau is to act as a facilitator for disputes between consumers and a given business. Alternatively, they can write to their local BBB chapter with the relevant details of the case. Accredited businesses must respond to complaints in a satisfactory manner in order to maintain their designation.

For nonaccredited entities, responding to complaints is voluntary. However, doing so helps improve their BBB rating, which can be a powerful incentive in its own right. Once a consumer files a complaint, the business is expected to respond within 14 days.

If the initial request does not prompt a response, the bureau sends a second notice to the company. The BBB informs consumers when the business responds to the complaint, or if it does not receive a response.

Depending on the circumstances, the BBB may recommend mediation or arbitration to resolve the dispute. Upon closing the complaint, the bureau marks it with one of five designations: Resolved, Answered, Unresolved, Unanswered, or Unpursuable in cases where the BBB cannot locate the business. In theory, such membership fees should not affect the rating that it gives to a particular company. One prominent example was HCR Manorcare, a company that operates hundreds of long-term care facilities across the United States.

The CNN report claimed that consumer lawsuits are not even a factor when grading companies. For its part, the watchdog group acknowledges that nonmember businesses are not as closely scrutinized as those that pay for accreditation. These days, consumers have a wide range of options for researching companies, from Yelp to Google Reviews to Angie's List owned by IAC, Investopedia's corporate parent.

That goes for Better Business Bureau ratings, as well. For consumers, the best solution is often using multiple research tools, particularly when making larger purchases or hiring for a big job.