BBB’s Letter-Grade Ratings SystemWhat is BBB’s ratings system?
Frequently Asked Questions
The new 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 a trustworthy manner and will make a good faith effort to resolve any customer concerns. Why did BBB change its ratings system?
BBB updated its BBB Reliability Reports™ to help consumers more easily and quickly identify and compare the reliability of businesses based on BBB’s unbiased evaluation. Previously, BBB awarded businesses either a “satisfactory” or “unsatisfactory” grade that did not provide as much insight as a letter grade. What goes into a business’s letter-grade rating?
The ratings system uses a formula that takes into account 16 factors based on objective information and actual incidences of a business’s behavior that have been verified and evaluated by BBB professionals. What are the factors that go into a business’s rating?
• The type of business and its business model.
• How long the business has been operating.
• Whether the business has appropriate licensing.
• Total volume of complaints filed against the business.
• The number of unanswered complaints.
• The number of unresolved complaints.
• The number of serious complaints.
• An overall complaint analysis.
• Number of complaints with a delayed resolution.
• Government actions against the business.
• Any advertising issues found by BBB.
• The extent of background information available to BBB for evaluation.
• The extent to which BBB is able to develop a clear understanding of the business.
• Whether the business has honored any mediation/arbitration commitments.
• Whether the business has attained BBB Accredited Business status.
• Whether the business has had its BBB accreditation revoked. How is the letter grade computed?
Businesses are awarded points based on 16 factors that are weighted according to BBB’s assessment of the importance of each factor. The range in which the total number of points awarded falls corresponds to the appropriate letter grade. How are the factors weighted?
In most cases, complaint history drives a business’s letter-grade rating. Nearly 85% of the scoring is determined by consumer-reported complaints that have been verified and evaluated by BBB, including the number of complaints, the severity of complaints and how a business resolves complaints. Even if there have been no complaints to date, other factors affect a business’s rating include how long the business has been operating, government actions, advertising reviews and license issues. Do you guarantee the reliability of companies that are rated?
No. The grade represents BBB’s degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns. People should also read and consider full BBB Reliability Reports™ for more information and details. How often is a business’s rating reviewed and/or changed?
Whenever BBB receives or collects new information about a business, our professionals evaluate it and enter it in our database, which automatically updates the business’s rating. BBB reports on complaints received in the previous 36 months. How does a grade increase or decrease?
Grade changes depend on the factors involved and how the factors are weighted. Since a business’s grade is based on its actions in the marketplace, the grade can rise or fall depending on how the business performs within each of the 16 factors. What do you tell a business that wants to know how to increase its letter grade?
BBB will first want to examine the factors affecting the business’s rating. From that research, BBB can offer specific, qualified guidance on how the business can improve its BBB rating. In general, BBB recommends to any business that it consistently treat its customers in a fair and honest manner. And, if honest mistakes are made, take prompt and appropriate action to resolve issues in a timely manner. Will consumers and/or businesses be alerted if a business’s rating changes?
People will need to check BBB Reliability Reports™ for updated ratings. We are considering other notification options, but no decisions have been made at this time. Where can consumers find a business’s rating?
Individual business ratings are prominently displayed at the top of BBB Reliability Reports™. Consumers can check the reports of more than four million businesses online and free of charge at bbb.org
. What does each rating mean?
For more information on the specific factors leading to a business’s rating, consumers should read the full BBB Reliability Report™, which includes more details about the business including complaint history. What does NR mean?
Generally, BBB assigns a business an “NR” (no rating) under the following circumstances:
• Type of business is not appropriate for BBB ratings, such as psychics, astrologers, spiritualists.
• BBB doesn’t have enough information on the business and/or hasn’t had sufficient time to assess the business.
• BBB has determined the business is no longer operating. What does the factor “BBB’s experience with the industry in which the business operates” mean?
The term specifically applies to types of businesses that are generally scams or fraudulent. It can also apply to an industry that relies on a business model that, in BBB’s experience, exhibits consistent or inherent problems or trade practice concerns. What are the industries that BBB has identified as scams or fraudulent?
• Advance-fee loan brokers
: Businesses that charge advance fees for non-existent loans.
• Credit repair services
: Businesses that charge advance fees to repair or improve consumer credit history.
• Online casinos
: Virtual casinos that provide for winning and losing real money.
• Chain letters
: An "opportunity" that requires money be sent to others in the chain.
• Advance-fee job listing and advisory services
: Job listing and advisory services that charge an advance fee for referral to positions that don't exist or they are not authorized to promote.
• Foreign lotteries
: Offering cash prizes from another country that require a fee or funds transfer to claim non-existent winnings.
• Office supplies telemarketers
: Telemarketers that sell office supplies using deceptive techniques.
• Unapproved foreign online drug and prescription services
: Online pharmacies selling unapproved drugs and/or invalid prescriptions.
• Itinerant workers that solicit for paving, painting and home improvement
: Traveling workers providing poor or no service.
• Ponzi schemes
: Investment schemes relying almost entirely on contributions from future investors to pay current investors.
• Pyramid business opportunities
: "Business" opportunities that focus primarily on monetary payments and recruitment of new payees rather than sale of a product or service.
• Illegal prize promotions
: Fraudulent prize promotions.
• Reloader schemes
: Fraudulent offers to recoup money for previously scammed consumers.
• Illegal sweepstakes
: Sweepstakes that require advance payment to claim non-existent cash prize winnings.
• Work-at-home companies
: Work-at-home businesses that require initial advance fee and misrepresent earnings and/or nature of work. What are the industries that exhibit consistent or inherent problems or trade practice concerns?
• Debt-negotiation or settlement companies
: Business model that has consumers stop paying creditors for a period of time prior to negotiation with creditors.
• Government auction and job listing services
: Businesses that charge a fee for publicly available information about government auctions and jobs.
• Finder services for grants, scholarships or financial aid
: Businesses that use questionable advertising and charge a fee for lists of grant, scholarship, or financial aid resources.
• Businesses making scientifically unproven health or medical claims
: Businesses making unsubstantiated medical or health-improvement claims to sell products.
• Itinerant or bulk meat sellers
: Door-to-door and/or short-term businesses that use questionable advertising and sales practices for the sale of bulk meat.
• Advance-fee modeling agencies
: Businesses that charge consultation, adminsitration or other fees before agreeing to represent a client.
• Wealth-building or real estate-investment seminars
: Businesses promising unrealistic results for building wealth with purchase of books, DVDs or other material. How are the fraudulent or problem industries chosen?
A BBB committee determines which industries fall into categories of scams or having inherent problems. The list of industries is regularly reviewed and subject to change as determined by the committee. Will larger businesses receive lower grades because they likely will receive more complaints due to the sheer volume of business they do?
No. BBB takes into account the size of a business, such as the number of customers, when evaluating the volume of complaints. Why is length of time in operation a factor?
How long a company has been in business is one of the first things consumers consider when researching a company to hire. They want to have a degree of confidence that the business has experience and a track record, so our formula factors this key consideration in. Are BBB Accredited Businesses guaranteed a higher grade than non-accredited businesses?
No. While BBB Accredited Businesses do receive additional points, other factors contribute to a company rating and non-accredited businesses can also have favorable ratings. Why are there points for being a BBB Accredited Businesses?
Grades represent BBB’s degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns – and accreditation raises that level of confidence. To be accredited, a business has been thoroughly reviewed by BBB, meets the organization’s high standards for integrity and reliability when dealing with consumers, signs an agreement with BBB to continue to abide by these standards, and supports BBB's efforts to educate and protect the public. In addition, under this agreement, the business must work with BBB to resolve complaints in a timely manner that is equitable for the consumer. Is it fair that BBB receives money from BBB Accredited Businesses?
Like most standards-based organizations that provide accreditation, we charge a business for the time and costs associated with reviewing and monitoring their organization. As a result, we are able to provide many important and valuable services to all consumers free of charge, such as BBB Reliability Reports™. Why and how does BBB rate non-accredited businesses?
The more information we can provide the public, the better informed they are to make a good choice when hiring or doing business with a company. Therefore, when we have sufficient information to evaluate a business based on our 16 factors, we will provide a report and subsequent letter grade.Where can people find more information about BBB Ratings in general?
For more information about BBB's ratings system, visit bbb.org
. Information will be readily available, explaining BBB Ratings, through links and interactivity associated with our BBB Reliability Reports™. Consumers and businesses are always welcome to contact their BBB
with individual questions.