Better Business Bureau Changes Ratings Methodology, Benefiting Debt Collectors

The Council of Better Business Bureaus has confirmed to ACA International that it has adopted and implemented a revision to its ratings methodology regarding the definition of "customer." This change, while not specific to the debt collection industry, will have a positive impact on the ratings of ACA members who are also members of their local Better Business Bureau.

One of the measures the BBB uses to rate companies is the number of complaints versus the size of a business. In the past, this was based on the number of customers the business serves—not on the number of consumers contacted. For debt collection agencies, ratings were skewed due to this definition of "customer."

Under the BBB’s new definition of "consumer," debt collection agency size will now be based on the number of customers served and the number of consumers it contacts each year.

The following language is a direct citation from BBB communication with ACA:

"Customers" are those persons/entities that fall into one or more of the following categories:

• Consumers who purchased a product or service from the business; or

• Consumers who entered into a contractual relationship with the business; or

• Consumers who directly received services from the business, or were contacted by the business with a demand for payment of money owed, ONLY IF the BBB generally accepts complaints from those consumers against this type of business.

Note: The above definition is intended to include debtors who are contacted by a collection agency if the BBB generally accepts complaints from debtors against collection agencies.

BBB has formally announced the policy change to each of its local presidents but the change cannot be automatically implemented. This new rating methodology will only go into effect when an ACA member contacts their local BBB to update their company profile. Contact your local BBB and update your profile to ensure your company size is based on the number of customers you serve and the number of consumers you contact each year.