Company sues over Better Business Bureau rating, cites bias

By Steve Green

Monday, May 10, 2010 | 8:53 a.m.

A company unhappy with its Better Business Bureau rating is suing the BBB of Southern Nevada, charging BBB ratings are easily manipulated and are biased in favor of companies paying BBB accreditation fees.

Incorp Services Inc. of Henderson filed suit in federal court in Las Vegas last week against the Better Business Bureau of Southern Nevada and its director, Sylvia Campbell.

Incorp says it's the largest Nevada-based registered agent service with more than 75,000 active clients around the world and "enjoys a sterling reputation in the registered agent industry for the quality of its services and its responsiveness to customer concerns." Such registered agents typically provide incorporation services and handle other paperwork provided by the state.

"Defendants advertise themselves as an unbiased public-interest organization, designed to provide customers with honest and accurate information about businesses," the lawsuit charges. "Defendants' advertisements are false, as their ratings of businesses are intentionally biased and inconsistent, and in particular, heavily favor businesses that have chosen to pay money to and participate in the defendants' accreditation program."

Incorp complained that as a result of its decision not pay BBB accreditation fees, the BBB has assigned it an inconsistent rating that often appears as an "F" on the BBB website.

"Defendants have systematically disregarded Incorp's attempts to understand the complaints that have been filed against Incorp with defendants, to respond to consumer complaints, to communicate with defendants and to repair Incorp's rating published by the defendants," the lawsuit charges.

The BBB website on Monday showed Incorp has a "C+" rating, and says the BBB has processed 26 complaints against the company in the past 36 months. Of those, 14 were resolved and 12 were closed after the BBB determined Incorp made good faith offers and efforts to resolve the complaints.

Incorp charged in the suit that its rating has vacillated on a daily basis from "F" to "C" to "No Rating" without explanation and that the BBB system can easily be manipulated by a third party in a matter of seconds.

By making minor alterations to the BBB website address, "third parties can create a web page, under defendants' domain name, that reflects any grade they want for any business listed in the BBBOnLine system," the suit charges.

Unscrupulous third parties can then spread false domain names throughout the Internet, "creating the impression to millions of Internet users that defendants have assigned Incorp (or another business) a different letter grade than it has actually assigned," the suit charges.

Incorp accuses the BBB of false advertising and business disparagement and seeks damages for these claims as well as "oppression, fraud and malice."

Campbell declined comment on the suit except to say that companies paying for BBB accreditation do not receive preferential treatment in their ratings.

"We do have a lot of companies that are not members that have good ratings," she said.