Better Business Bureau Credibility – What Consumers Need to Know

No, the Better Business Bureau (BBB) is not a government agency, and it has no regulatory power whatsoever. It is a private, nonprofit organization that exists primarily to make money by selling business accreditations. Many consumers mistakenly believe the BBB is a government-backed authority, but this is false. It cannot fine businesses, shut them down, or enforce any laws.

Worse, the BBB’s credibility has been heavily discredited. A 2010 ABC News 20/20 investigation proved that companies can literally buy high ratings through paid accreditation. In one infamous case, a fake business using the name Hamas—a designated terrorist organization—was given an A- rating within hours simply by paying the accreditation fee. Meanwhile, legitimate businesses that refused to pay were often rated poorly, regardless of their actual customer service record.

The BBB also allows false or misleading complaints to remain public, damaging businesses with little recourse. Contractors have very limited options to fight back unless they pursue expensive legal action against the customer—or against someone pretending to be one. According to numerous contractors, BBB representatives have even suggested that paying for accreditation could help “resolve” or overshadow these damaging complaints.

The BBB’s priority is revenue, not consumer protection. Its sales teams work on quotas, pushing accreditations as their primary source of income. Because of this, its ratings should not be considered a trustworthy indicator of a company’s reliability. Consumers should rely instead on state licensing boards, verified Google or Yelp reviews, and direct references from past clients for an accurate picture of a contractor’s reputation.

Yes. A 2010 ABC News 20/20 investigative report exposed the Better Business Bureau (BBB) for effectively selling its coveted A+ ratings. The investigation revealed that businesses willing to pay accreditation fees were given high ratings, regardless of their actual business practices.

In one shocking instance, 20/20 reporters registered a fake business called “Hamas” (named after the terrorist organization) and received an A- rating from the BBB within hours simply by paying the fee. The same investigation found that some companies with numerous consumer complaints maintained A+ ratings solely because they were accredited, while reputable businesses that refused to pay had lower grades.

This investigation severely damaged the BBB’s credibility and reinforced public skepticism. Because of these findings, consumers are strongly advised to use other sources—such as Google, Yelp, and independent industry review platforms—before trusting BBB ratings.

Yes, most BBB complaints are public, but the Better Business Bureau has no legal authority or regulatory power to enforce any action against a business. It cannot issue fines, revoke licenses, or shut down unethical companies. Instead, it functions as a private organization that merely forwards complaints and asks businesses to respond. Whether or not the business complies is voluntary.

This lack of authority makes the BBB virtually meaningless as a consumer protection tool. The 2010 ABC News 20/20 investigation exposed that the BBB primarily exists to make money through paid accreditation, not to protect consumers. Businesses that pay annual fees often receive higher ratings—even if they have unresolved complaints or poor customer service records. Conversely, legitimate companies that refuse to pay sometimes receive lower grades.

Because the BBB cannot take any meaningful action and has been proven to sell ratings, it is not a reliable indicator of a contractor’s credibility. Consumers should instead verify licenses through state agencies, read verified online reviews, and request references directly from past clients.

No, the BBB should not be your primary source when hiring a contractor. Its credibility has been severely undermined by past investigations, including a 2010 ABC News 20/20 report that exposed how businesses could purchase high ratings through paid accreditation. Shockingly, the investigation proved that even a fake company named after the terrorist group Hamas was able to obtain an A- rating simply by paying a fee.

This pay-to-play system calls into question the accuracy of BBB ratings. Many reputable companies have been given poor grades because they refused to pay accreditation fees, while businesses with documented complaints maintained A+ ratings after paying. Because of this, relying on BBB grades may give you a distorted view of a contractor’s true reputation.

Instead of trusting the BBB, use these more reliable methods:

• Check licensing and insurance through your state or city’s official databases.

• Read verified online reviews on Google, Yelp, and Angi to see real customer experiences.

• Ask for direct references from past clients to confirm work quality and reliability.

• Request a written contract and clear payment schedule to ensure professionalism.

The BBB may still provide basic contact information or show whether a business responds to complaints, but it should be only one of many resources. For the most accurate assessment of a contractor’s reliability, cross-reference multiple sources and speak directly with past clients.

Google reviews, Yelp, and industry-specific review sites often provide more detailed and up-to-date information. Additionally, checking with the Federal Trade Commission or your state’s consumer protection office can help you avoid scams.