Caution on the Flawed BBB Rating System of Debt Settlement Programs

Read More About Debt Consolidation

Debt Settlement is a superior bankruptcy alternative. It has successfully helped millions of Americans to avoid bankruptcy. The well-known debt elimination procedure is recognized by major creditors, collection agencies, and even J. Thomas Rosch, Commissioner of the Federal Trade Commission (FTC). Rosch views it as a viable and needed service for consumers. However, because of an unfair rating system, the Better Business Bureau is not creating positive public awareness on debt settlement organizations, or their vital debt free solution.

According to the Better Business Bureau, its rating system 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 filled with BBB. The organization's ratings are determined by a proprietary formula, representing the Better Business Bureau's opinion on seventeen different elements. Each element is assigned a score per each category. The following BBB chart shows the maximum number of points that are awarded or deducted for each element:

Element Range of points that can be awarded or deducted (maximum to minimum)
1. Type of Business 0 to -41
2. Time in Business 8 to -10
3. Competency Licensing 0 to -41
4. Complaint Volume 20 to 2
5. Unanswered Complaints 20 to -21
6. Unresolved Complaints 10 to 1
7. Serious Complaints 15 to 0
8. Complaint Analysis 8 to -12
9. Complaint Resolution Delayed 0 to -5
10. Failure to Address Complaint Pattern 0 to -5
11. Government Action 0 to -30
12. Advertising Review 0 to -41
13. Background Information 5 to 0
14. Clear understanding of business 0 to -5
15. Mediation/arbitration 0 to -41
16. Accredited Business status 4 to 0
17. Revocation 0 to -10
Maximum Available Points 90

Each score above represents a percentage of the highest element score attainable. The chart below shows the final rating grade that the Better Business Bureau gives a company based on the percentage of the perfect score:

PERCENTAGE FROM PERCENTAGE TO RATING SYSTEM GRADE
97.00 100.00 A+
94.00 96.99 A
90.00 93.99 A-
87.00 89.99 B+
84.00 86.99 B
80.00 83.99 B-
77.00 79.99 C+
74.00 76.99 C
70.00 73.99 C-
67.00 69.99 D+
64.00 66.99 D
60.00 63.99 D-
0.00 59.99 F

The Rating System Grade above is based on a percentage of the perfect score of 90 points from a rating of to with pluses and minuses. A+ is the highest grade possible, and is the lowest grade.

Example:

a) A score of 90 out of 90 points = 100% = rating
b) A score of 60 out of 90 points = 66.66% = rating

When debt settlement companies are rated, under the Type of Business (TOB) element (see 1st chart above), they're automatically downgraded to a Category 2 because the BBB believes “the inherent nature of the products/services offered by businesses in these TOBs, the businesses are likely to generate trade practice concerns and/or a high level of customer dissatisfaction. Because this bias causes a maximum 41 point deduction, any debt settlement company can receive a grade of or despite D having a positive customer complaint history, resolution of complaints, or business practices. To corroborate this fact, based on our online research of our BBB Business Reliability Report on February 2, 2010 (http://www.bbb.org/san-diego/business-reviews/credit-debt-consolidation-services/debt-free-league-in-san-diego-ca-171991042/), our rating was an F. Ironically, our Customer Complaint History had the following caption:

BBB has processed no customer complaints on this company in its three year reporting period.

But how could the Better Business Bureau give an F rating to a company that has never received one single customer complaint? This would make sense for a company that's operating illegally, or is ripping off customers. But in this instance, the negative rating was given to the pioneer of the National Debt Relief Stimulus Plan, a company that takes great pride in having a legal, professional, and ethical debt settlement program that has a consistent track record maintaining a high level of trust and reliability within our customer base.

FACT: Debt Free League has always gone the extra mile to mitigate customer complaints in adhering to the highest quality customer service standards. Also, to ensure the highest level of customer satisfaction, we give all of our customers the following benefits:

The lowest debt negotiation fees in the industry
30-day 100% Money-back Guarantee
Client Reenrollment Credit

Many companies in the debt settlement industry have been criticized for charging customers exorbitant fees. But the fees that Debt Free League customers pay are one third less than the industry's average. While no government bailout program exists for small business owners, we also aid people, who are self-employed in getting effective business debt reduction. We also surpass the typical 3-day rescission period of most competitors with a cancellation policy that allows our new clients to cancel within 30-DAYS of enrollment and get back 100% of their deposit. And, we're also the only debt settlement program that allows customers that have an ongoing financial hardship, to cancel and reenroll, and be eligible to receive a credit of up to 100% of the fees they previously paid. Based on this pro-customer approach, it's understandable why Debt Free League has received ZERO customer complaints in a three year reporting period with the BBB. But, the ambiguity of this positive news and our F rating nevertheless casts public doubt on our ability to provide a quality service.

Because the Better Business Bureau has an unfavorable view on the debt settlement industry, its unfair rating system brands most debt settlement companies with an F. The highest category that a debt settlement company can receive is a C. Researching online, you'll only find a handful with this rating. And their ratings were grandfathered prior to the enactment of the present rating system. Creating even more ambiguity, you'll also find many companies from other industries have an or B rating, although they have a history of customer complaints that's much worse than the history of companies that have, a D or F rating.
Based on the above findings, a Business Reliability Report may not be the best guide to help you to identify a reputable debt settlement program. This is saddening news since people trust the judgment and opinions of the Better Business Bureau and amidst an economy riddled with high unemployment and record personal and business bankruptcy filings, many people can benefit from this effective bankruptcy alternative. But, a BBB Business Reliability Report may not help them to distinguish between a good debt settlement company like Debt Free League that consistently maintains high industry standards, full disclosure, and fair business practices, and a bad debt settlement company.

In fairness, the Better Business Bureau also adds the following caption o all of their Business Reliability Reports:

The rating is not a guarantee of a business reliability or performance, and readers should consider a business rating in addition to all other available information about the business. Thus, when weighing the value of a Business Reliability Report, what really matters is if the company has a bad history of customer complaints and/or unresolved complaints.

One of the Better Business Bureau's arguments for the overall negative ratings on the debt settlement industry is their view that the bad business model results in creditors not getting paid as agreed to by the consumer and educates consumers not to pay their debts.However, no ethical debt settlement company advocates or advices customers to not pay their debts. The reality is that people who join a debt settlement program were stricken by a financial hardship that caused them to lose a great deal of household income. And as a result, they were unable to keep up with their financial obligations.

Even the Office of the Comptroller of the Currency (OCC) confirms that financial circumstances justify for a consumer not to not pay as agreed. In fact, the Federal Reserve agency issued a directive to creditors to stop unreasonable policies that have made it nearly impossible for consumers to get out of debt. Naming a few of these financial enslavement schemes, because of a credit card agreement universal default clause, without good cause or warning, credit card companies can abruptly increase your interest rates. To profit more, they can shorten the grace period on your billing statements, increasing the odds for you to pay late fees and over-the-limit fees. Fees alone make up one third of the billions in credit card industry profits! And for decades, credit card companies applied only 90% of your minimum payment to lowering your interest rate, while only 10% lowered your debt's principal balance. So, you can see how easy it is for people with financial hardships to default on their minimum payment obligations.

However, thanks to the support of our professional debt settlement program, many of our financially-challenged customers have been able to avoid bankruptcy, pay their creditors, and get out of debt. Without our assistance, they could have stayed behind on their bills and encountered debt collector lawsuits and judgments. The unnerving stress of the creditor harassment could also have forced many of them to seek bankruptcy protection and in turn, creditors would not get paid. But, based on their financial predicaments, and their resourcefulness to avoid bankruptcy, we helped them set up a plan to conveniently pay off their unsecured debts at a reduced amount and based on the affordability of their handicapped budgets.

In closing, to find a legitimate, proficient debt settlement program, relying solely on a BBB Business Reliability Report could be a huge mistake. Today, what really matters is doing extensive research, most of which can be readily accomplished online. Remember, bad news travels ten times faster than good news. Thus, doing a Google search can help you to easily dig up a lot of dirt on a bad company.

A lot of the online community also researches Blogs and sites like Ripoffreport.com and Netcheck.com to view a company's history of complaints and get a good sense of their reputation. Finally, to measure a debt settlement company's performance history, you should verify that they have extensive debt negotiation experience. So, ask to see a current debt settlement letter on the different creditor accounts, or collection accounts that you're considering to enroll in their debt settlement program. Experience and results is ultimately what counts. And when in doubt, there's nothing better than getting a referral from a satisfied customer.

Article Source: http://depositarticles.com/

www.debtfreeleague.com/debt_settlement_company_articles.html

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Debt Consolidation Articles Via RSS!

Additional Articles From - Home | Finance | Debt Consolidation

Our other websites
All about SEO
Beauty Tips Forum

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
Link Us
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Sitemap

New Stuff
About Us
Developer
Good shopping portal
Link to Us
Contact Us
Privacy Policy
Terms of Service