Better Business Bureau

International Association of Better Business Bureaus, Inc.

Founded	1912 (1912)
Type	501(c)(6) non-profit organization
Tax ID no.	52-1070270
Focus	Consumer education Industry self-regulation
Headquarters	4250 N Fairfax Drive, Suite 600 Arlington, Virginia U.S. 22203
Area served	United States and Canada
Products	BBB Business Reviews Accreditation for businesses Dispute resolution services
Services	Rating site
Subsidiaries	BBB Wise Giving Alliance
Revenue	$215 million
Expenses	$20 million
Employees	2,500
Website	bbb.org

The Better Business Bureau (BBB) is an American private, 501(c)(6) nonprofit organization founded in 1912. BBB's self-described mission is to focus on advancing marketplace trust, consisting of 92 independently incorporated local BBB organizations in the United States and Canada, coordinated under the International Association of Better Business Bureaus (IABBB) in Arlington, Virginia.

The Better Business Bureau is not affiliated with any governmental agency. Businesses that affiliate with BBB and adhere to its standards do so through industry self-regulation. To avoid bias, BBB's policy is to refrain from recommending or endorsing any specific business, product or service even though they still advocate for business interests.

The BBB rating system uses an A+ through F letter-grade scale. The grades represent BBB's degree of confidence that the business is operating in good faith and will resolve customer concerns filed with BBB. BBB's ratings are explained on its Ratings Overview page. BBB employees evaluate a business's behavior when assigning a rating.

According to BBB, nearly 400,000 local businesses in North America were accredited as of July 2022. BBB prospects successfully vetted businesses to become dues-paying 'accredited businesses' that pledge and continue to adhere to the BBB Code of Business Practices. In return, BBB allows accredited businesses in good standing to use its trademarked logo in marketing materials.

History

Early Origins (1906–1912)

The Better Business Bureau traces its roots to the U.S. government's 1906 lawsuit United States v. Forty Barrels and Twenty Kegs of Coca-Cola, which ignited widespread scrutiny of misleading advertising practices.Kleber, John E. (July 11, 2014). The Encyclopedia of Louisville. University Press of Kentucky. ISBN 978-0-8131-4974-5. In response to growing public concern, local "vigilance committees" began forming across the United States by 1912 to monitor and discourage unethical business behavior. These groups were largely driven by figures such as Samuel Candler Dobbs of the American Advertising Federation, who had been advocating for truth in advertising since at least 1911.

Structure and funding

The Better Business Bureau (BBB) is part of a private, nonprofit federation operating across the United States and Canada. Local BBB organizations are independently incorporated, but overseen by the International Association of Better Business Bureaus (IABBB), which establishes standards and monitors compliance.

Funding is almost entirely derived from voluntary membership dues paid by accredited businesses. Critics argue that this funding model creates a conflict of interest, as local boards and executive leadership often include business representatives—up to 90% in some jurisdictions.

Dispute resolution procedures

BBB serves as a consumer-facing mediator offering several types of alternative dispute resolution (ADR), including conciliation, mediation, informal dispute settlement, and both conditionally binding and binding arbitration.

Upon filing, complaints are forwarded to the business within two business days, and businesses are requested to respond within 14 calendar days. A follow-up is issued if no response is received, and most cases are closed within approximately 30 days with statuses such as “resolved,” “answered,” “unanswered,” or “unresolved.”

However, critics contend the process remains superficial—sometimes parties with unresolved grievances are offered gift certificates for case closure, raising questions about effectiveness. BBB lacks legal enforcement power; it provides mediation rather than judicial resolution.

Rating system and accreditation

In 2009, BBB launched a letter-grade rating system (A+ to F), replacing the older Satisfactory/Unsatisfactory system. Ratings are computed based on factors such as complaint patterns, transparency, advertising reliability, time in business, and responsiveness to customers.

Initially, accreditation status contributed four points toward higher ratings. After media exposés in 2010—especially allegations of businesses receiving higher grades immediately after paying fees—Connecticut’s Attorney General condemned the system as misleading. BBB removed accreditation from the points system and pledged reforms.

Criticism

Criticism peaked following a 2010 *ABC News* *20/20* investigation revealing that fabricated companies—including one named “Hamas”—received high ratings shortly after paying membership fees, suggesting pay-for-play dynamics.

In 2013, BBB’s largest affiliate—the Southland chapter—was expelled by its national council for failing to meet accreditation, reporting, and complaint-handling standards. Critics assert the BBB lacks objective oversight, given its board composition and financial ties to accredited companies.

Additional complaints highlight the BBB’s inability to remove defamatory listings or consumer reports even after settlements are reached, as the organization cites “transparency.” Cases from reputation management professionals suggest reputational control is nearly impossible once a listing exists, even without evidence.

Integration of US and Canadian operations

On August 16, 2011, the Council of Better Business Bureaus merged its U.S. and Canadian operations into a unified North American system. That consolidation was intended to streamline cross‑border complaint management, consumer access, and business accreditation infrastructure.

BBB trademark authorization revoked from four Canadian offices

In 2012, the International Association of Better Business Bureaus stripped trademark authorization from four Canadian chapters—Hamilton, Windsor, Montreal, and St. John's—citing failure to meet operational and reporting standards. These offices either rebranded or were absorbed into regional offices. As of 2022, all Canadian regions are served via standardized local bureaus under unified governance.

See also

• Angie's List
• ConsumerAffairs
• ResellerRatings
• Sitejabber
• Trustpilot

External links

• Official website
• Give.org – BBB Wise Giving Alliance