The Better Business Bureau just released some good news: In 2011, consumers consulted the BBB far more often than they did the year before, and they lodged fewer complaints. Surely that's a sign that consumers are learning to look before they leap with their money.
First, the stats: The BBB was consulted more than 103 million times in 2011, up 18% over 2010. That's an all-time high, by the way, over their 100-year history. Now, those are just instances of people asking the BBB for help. Complaints lodged with the BBB fell about 7%, to 927,000.
In practical terms, those numbers suggest that more Americans are being smart about their shopping, looking into businesses' reputations before engaging them.
Carrie A. Hurt, CEO of the Council of Better Business Bureaus, which oversees 116 BBBs across North America, sees that as "terrific news." She added, "When consumers come to us first for information about businesses, they are much less likely to need our dispute resolution services later."
If you're among the ranks of those not too familiar with the BBB, here's the scoop: It compiles data on more than 4 million businesses, grading them on their responsiveness to customers, their complaint histories, legal and regulatory actions taken against them, and more. You may see the BBB logo displayed by businesses that have met the BBB Code of Business Practices. (Interested in seeing what the BBB has to say about a specific business? Look up their review here.)
Companies Getting the Most Background Checks
Dig a bit deeper into the BBB's report and a picture emerges of which sorts of business are generating the most inquiries:
- Topping the list are roofers, with more than 3 million inquiries in 2011, up a whopping 39% over 2010.
- In second place are general contractors, with more than 2 million inquiries and an even huger increase, at 71%.
- The other industries in the top 10 most-checked list each generated more than a million inquiries: used-car dealers, car repair shops, plumbers, new car dealers, mortgage brokers, construction/remodeling services, heating and air conditioning, and moving companies. All sported double-digit increases in inquiries (except for moving companies, which had a modest 3% uptick).
Our Biggest Trust Issues
The BBB's results aren't terribly surprising, given many consumers' biases against some of these industries. A recent Gallup poll, for example, rated a variety of professions on their perceived honesty and ethical standards, with some interesting findings.
Third from the bottom were car salespeople, with 47% rating their honesty and ethics as "low" or "very low." Building contractors fared much better, with just 15% registering low opinions. (In last place, by the way -- and tying the record for worst rating ever on this question -- were members of Congress, with 64% of respondents having a low opinion of their honesty.)
Another explanation for why businesses in these industries got checked out so much is that they all represent major cash outlays for consumers. You probably won't do a background check on your sandwich vendor, but if you're looking to spend $20,000 on a new car, $30,000 on a new kitchen, or even just $3,000 on an interstate move, doing some research to minimize your odds of headaches or getting ripped off becomes a much more compelling idea.
The BBB also reported which industries got the most complaints. (Note that complaints filed with the BBB are investigated, with companies given a month to respond. Roughly 95% of complaints are resolved by this point. The remainder head to mediation or arbitration.)
Topping the complaint list were cell-phone companies, with 38,420 complaints, up 41% over 2010. After that, the list includes (in order of number of gripes):
- new-car dealers
- television providers (cable, CATV, and satellite)
- collection agencies
- used-car dealers
- telephone companies
- furniture retailers
- car repair shops
- online retailers
This list isn't surprising -- or damning -- Hurt explains, because these are frequently used services: "So even though the volume of complaints is high, the actual rate of complaints is relatively low. And companies in these industries also tend to resolve complaints at a higher rate, as well."
Complaints for television companies actually dropped 18% over the year, while bank complaints dropped 29% and online-retailer filings dropped 1%.
Payday loan companies led the list of industries seeing increases in complaints, with a 159% jump. Others, with increases ranging from 41% to 72%, included book publishers, cell-phone equipment/supplies, telephone companies, electronic equipment repair/service, florists, travel clubs, general retailers, insurance companies, and skin care.
Some would suggest that there are fewer complaints because our economy has been in the dumps, and in such an environment, many workers are simply happy to have a job, and therefore offer better service. But our economy has been weak for quite a while now, so that may not be the explanation. Perhaps we're just becoming smarter consumers.
Regardless, you're more likely to have a good experience dealing with a business if you check it out first, to make sure it doesn't have any red flags waving over it. The Better Business Bureau, along with other consumer advisers such as Consumer Reports, Angie's List, and others, are there to help -- check them out.