BBB changes way it grades firms

The Better Business Bureau said Monday that it is grading millions of businesses and nonprofit groups with letter grades from A+ to F, a change from the former rating system of "satisfactory" and "unsatisfactory."

The BBB also is expanding its ratings to include the 113,000 businesses and nonprofit groups based in Utah, such as Intermountain Healthcare, which received an A+, and Overstock.com, which received a C+. In addition to viewing the letter grade, people can also view complaints and reasons why an organization was given the grade at www.utah.bbb.org. The information is free.

BBB Utah President Jane Driggs said the new system is easier.

"People have never liked the 'satisfactory-unsatisfactory' ratings," Driggs said. "Businesses didn't like it that the best they could get is satisfactory. That's why we went from A+ to F. I think more people understand that, since we all had it in school."

BBB employees consider 16 factors when grading a business. Those include the severity and number of complaints, whether complaints were resolved in a timely manner, whether the organization demonstrated a good-faith effort to resolve them, whether an organization has proper licensing, government actions against businesses and any advertising issues. Some factors are weighted more than others when grading a business or nonprofit group.

"It does take into account how large a business is," Driggs said. "So obviously, a business such as IHC could have more complaints, versus a small business, which could have one complaint and get an F."

Businesses and nonprofit groups that sign up for accreditation by the BBB also tend to have a higher rating because they agree to certain actions such as resolving complaints in a timely manner, Driggs said, which will bump their grade up on the ratings.

Some businesses, however, may get dinged on ratings because they are associated with an industry that the BBB considers unfair to consumers. For instance, Check Cash Advance in Murray has no complaints from consumers, but it has a C-minus rating because of its industry: payday lending, Driggs said.

Jonathan Johnson, president of Overstock.com, said he was surprised that his company got a C+. "This last year, National Retail Federation and American Express ranked us the No. 2 customer service retail organization in the country," he said.

E-mail: lhancock@desnews.com