In an article about the D.C. Better Business Bureau in the Feb. 25 edition of The District Weekly, Ana Aldama was misidentified. She is the director of the Consumer Education and Information section of the D.C. Office of Consumer Protection.
At one time, one of the strongest weapons a consumer had against a company's bad business practices, other than a court suit, was to file a complaint with the Better Business Bureau. The bureau couldn't force a business to take positive action, but a negative file at the BBB was considered a blemish on a business' reputation and a deterrent to future customers.
But with the advent of city- and state-run consumer protection agencies in the 1960s and '70s, many consumers turned to government agencies with power to take businesses to court or to enforce local legislation governing how companies conduct business.
Now that the Reagan administration has proposed cutting back on funds for consumer protection agencies and their staffs have been reduced severely, the head of the Washington Better Business Bureau says the agency will have a greater role to play in the consumer protection field.
Bureau president Douglas W. Tindal said he expects that because of the local impact of budget cuts, his agency will receive even more than the 100,000 calls received last year. He said the bureau plans to install a computer system to help handle the anticipated increase in calls more efficiently.
Ana Aldama, head of the city's Office of Consumer Protection, an agency that mediates disputes between consumers and businesses and take cases to court, said that budget reductions have cut her staff in half.
"We're really at bare bones," said Aldama. "We had about 18 CETA [Comprehensive Employment and Training Act] people working for us and they all left. We're working with interns and volunteers because we don't have money to hire."
While the city's consumer agency has funding problems, the privately funded bureau has not been cut back. Currently, 18 part-time and 12 full-time staff members maintain the bureau's operations. In addition to handling complaints--which the public is most familiar with, according to Tindal--the BBB handles consumer inquiries, reviews advertisements, randomly shops at area stores to check for accurate pricing, arbitrates disputes between customers and businesses and distributes information on charitable organizations. Still, its role is largely advisory, without legal enforcement power to mediate disputes.
Washington's Better Business Bureau, established in 1920, has about 3,200 member businesses, including most of the area's large department stores, thrift institutions, public utilities and media organizations. Most of the members, however, are small businesses. Member businesses pay yearly dues based on number of employes--ranging from $115 to about $8,000--and that money is used to operate the bureau.
The bureau is governed by a board of 50 directors, some of whom are top executives of local department stores, public utilities, banks and media organizations. Others are selected from smaller member businesses. The board, which doesn't get involved in casework, according to Tindal, sets policy for the bureau and concerns itself with financial matters.
The BBB is autonomous, Tindal said, and does not endorse any business, including its own members. "We very jealously guard our name," he said. "We don't allow our members to use us as a reference or put us in their advertising and you don't see the Better Business Bureau name on the side of trucks."
"Probably the greatest perception the public has is the BBB is a complaint bureau," Tindal said. "What's not as well known is that for every customer complaint we handle, we're handling probably 10 times as many inquiries."
Of the complaints the BBB receives, said Tindal, the mail-order industry claims the greatest number and has for at least the past 10 years. Right behind mail orders, in number of complaints against businesses, are franchise auto dealers, auto repair shops (except transmissions), magazines, other automobile businesses (used cars, transmission repair), home remodeling contractors, dry cleaning and laundry companies, department stores, home furnishings and clothing specialty stores.
Complaints aside, Tindal said, inquiries--calls from consumers who want to know about a business' reputation--are the bureau's "club" to keep businesses in line, so to speak.
"If you [a business] don't take care of your complaints, that's exactly what we're going to tell your prospective customer," Tindal said. "We might say--depending upon the gravity of a [particular business'] file--this company does not meet the Better Business Bureau's standards of business performance, specifically because they don't answer their complaints, or they fail to address the cause of complaints, or whatever the situation may be.
"Now, if you heard that," Tindal added, "I don't think you'd be inclined to do business with" that company.
Evidently, the threat of a bad reputation is enough to get many businesses to cooperate. The BBB manages to close between 70-75 percent of its cases each year, according to Tindal. Closing a case, the BBB president says, means resolving a complaint to the complainant's satisfaction.
"Most companies are honest," Tindal said, "despite what you sometimes read. They want to make a living. They want to take care of their customers and most of them do.
"Then there are a few that are going to say, 'The hell with it,' and won't answer anything. They are just out-and-out charlatans," he said. "If we get complaints that indicate that customers are being cheated by a business doing something unlawful, we don't process complaints against them or write letters. We turn that over to the appropriate government agency."
The D.C. Office of Consumer Protection is the only agency that approaches the BBB in volume of cases. According to Aldama, that office receives about 3,000 complaints a year and "90 percent are resolved in one way or another.
"The difference between the two offices," Aldama explained, "is we have the law behind us. We have a mandate to exercise and administer the law. We prosecute, we can mediate, we can go all the way to the courts.
"We talk with the BBB and we exchange information. Sometimes we can't handle some things, because of limits of the law, and we refer" complainants to the BBB.
One of the BBB's more ambitious undertakings has been its arbitration program. The program has been in place for the past eight years, but it has been accorded greater emphasis since corporate giant General Motors agreed in 1980--and most of its local dealers concurred--to allow the BBB to arbitrate in cases of customer disputes with GM. The program has since been expanded to include Volkswagen of America.
"The arbitration is binding and it has held up in court," Tindal says. "We have never had a party, in the eight years we have operated the program , that has not followed through with the arbitrator's decision.
"I would hope to see more industry programs like GM's, perhaps in other industries like the moving and storage industry, which has its problems, and the airlines," Tindal says. "I think it is one of the most important new programs that has come across the bureau in years."
"I think Better Business Bureaus will be more aggressive in promoting arbitration," says Bob Hughes, an attorney with the Federal Trade Commission's Office of Federal, State and Consumer Relations.
"They've been conscious of the need to be effective and do things on their own without sitting, waiting for the phone to ring," Hughes said. The BBB "is very efficient in acting as a dispute resolution mechanism."