The Truth Exposed: BBB Fraud

The Better Business Bureau (BBB) was founded in 1912 and it was a well-respected company that consumers depended on to determine companies that they should avoid or do business with. Every company wanted to become a member of the BBB to prove their worthiness and improve their success. Many older generations still depend on the BBB because they grew up with it. However, I’ve often heard younger people also suggest that their family and friends should contact the BBB to see if a business is on the up and up or to file a valid complaint with them. The younger generations typically suggest the BBB to people because they have heard about it from a family member.

HERE ARE THE FACTS.

The Better Business Bureau was ONCE an ethical company. It was founded to help consumers find the best places to do business with and to know who to avoid so they were not taken advantage of by unscrupulous companies or individuals. But just as everything in life, things change. Once the internet was invented in the mid 90’s, things changed. Once personal computers came into existence, it didn’t take long for consumer message boards, forums and complaint websites to pop up all over the internet for easy and quick access to information. These free service on the internet ruined the BBB’s entire business model rendering them useless and broke.

In order to stay in business and not file bankruptcy, the BBB desperately looked for ways to make money and stay in business. The BBB contacted the businesses with bad ratings and massive complaints and offered to erase the companies bad reports and give them a good rating IF they paid the BBB a yearly member fee and an additional $1,500 + (depending on the size of the company.) Can you imagine?! Ironic that the number one, go to company that encouraged consumers to ONLY utilize the businesses with high ratings to ensure they were safe and wouldn’t get ripped off… Now were unethically lying to consumers for a few bucks. For those of us that witnessed the downfall of ethics of the BBB, it truly felt like a violation of trust and was a major disappointment.

I discovered this happening first hand. While growing up, my parents called the BBB before they would hire anyone such as a plumber, locksmith, accountant, tax person, gardener, pool man, etc. But they’d also call the BBB before deciding where to buy a car, a new refrigerator or even to try out a new restaurant. The BBB was kind of like Yelp, except originally, literally had to call them to ask questions and then you’d hear the BBB staff flipping through books looking up what I envisioned to sometimes being hand written reviews that they would then read to the caller.

I experienced this myself when I first opened my school, Empire Academy of Makeup in 1996. I actually decided to start my academy because at the time there was a complete scam school nearby in Huntington Beach that was ripping off hundreds of aspiring artists every month! Many of them came to my business at the time which was Empire Makeup Studio and Empire Agency, begging me to teach them makeup after being ripped off and not learning a thing although they paid thousands of dollars. The school had a horrible BBB ranking score, hundreds of complaints and even had recently lost a class action lawsuit against them for fraud. This company remained in business by changing their business name every few years to escape their bad reputation. (BTW, They are actually STILL in business today.) Their bad reviews and BBB score quickly followed them each time once a formerly ripped off student would inform the BBB of their company name change. A few years, (And several name changes later) this company miraculously went from a F rating to an A+ rating once the scam school became a BBB member and new potential customers inquiring about the scam school were told they had zero complaints.

So wrong… Not just because they were my competition, but because it hurts my heart knowing that the eagerly took peoples money, sold them a dream of a career in makeup and had no intention of delivering the training necessary to do so. The people they ripped off were often psychologically devastated as well as in debt after having their career dreams crushed.

I warned my students about the BBB scam for many years and was so happy in 2010 to see that this unethical company finally got national exposure on ABC’s famous investigation TV show called 20/20. It took major companies like Disneyland and Woldgang Puck to talk to the press before the world was informed, but better late then never! As I recall, many other news stations also did reports on it after this was exposed. But people forget, or never say it in the first place, so here it is. Sadly, this investigation even uncovered more ways of scamming people. Once they realized they started making money on the bad businesses, they started claiming F ratings for ALL businesses that didn’t PAY them for a yearly membership. What they were doing actually was illegally extorting money from businesses with bad ratings until they paid them to remove the bad score.

Why am I explaining all of this? Because those of you that are serious about your business, will perhaps at some point be contacted by the BBB to “become a member” (If not already) or be told by a family or friend that you should become a member. As an educator, I desire to deliver wisdom though the truth and facts and leave it up to you to determine what is best for yourself.

BBB investigation by ABC News: Watch The Video HERE

Love & Wisdom,

Donna xoxo