What the BBB Complaint Reports Didnt Say

By Store Brown

(EDITOR'S NOTE: The following was originally written as a letter to the editor in response to an article in DM News. Additional Editor's Notes have been added to the story to confirm certain allegations.)

I'm surprised at DM News. Your July 16 article, "Five Firms Pull Most Mail Order Complaints," played right into the Better Business Bureau* hot little hands.

The article simply parroted the BBB* latest report, which as usual was filled with iljiiliUilii gross inaccuracies and false innuendoes designed to tarnish the image of direct marketing in the public eye. Someday an enterprising reponer will seriously investigate that smug, self-righteous organization—and expose the self-serving (and anti-direct marketing) conclusions with which it fills the pages of its supposedly "objective" reports.

Am I attacking the BBB? You bet And it* about time somebody did, because the reports it issues on the direct marketing industry are often stupid and unfair, not to mention malicious.

But wait Before launching this attack on the BBB, I must tell you up front that mine is one of the "five firms" (the five "bad apples") mentioned in your article. So I am not impartial.

In fact, several years ago I sued the BBB for deliberately false and malicious attacks on my company—and won. The BBB was forced to agree to print a retraction and also pay me 51,000 compensation, the check for which was framed and placed on my office wall

(EDITOR'S NOTE: Brown's companies won a libel action against the Better Business Bureau of Eastern Pennsylvanm in 1982. As reported in our May 15, 1982 issue, the BBB retracted allegations of false advertising by Abemathy & Closther Ltd.,

H.M. Fisk and North American Minerals Ltd., that it had published in its Report to Members in 1980.)

This humiliation evidently irritated the BBB, which since that time has never missed an opportunity to attack my company in print (along with the rest of the direct marketing industry), attempting to win by deceit what it could not achieve in court.

This BBB report featured in your article is a perfect example, and I will now illustrate how it deliberately attempts to mislead by omission, innuendo and plain inaccuracy.

1. The BBB* report is based on the (supposedly huge) volume of direct-mail-generated complaints it received for the last six months of 1989. But it deliberately omits to mention the total volume of transactions involved For example, my company, Direct Marketing Enterprises, bandies more than 20-million transactions annually. When evaluating a direct marketing firm of that size (one of the largest in the country, accounting for almost 4 percent of all bulk mail moved in the United States) to focus on just the raw number of complaints alone is extremely deceptive, and designed (intentionally, in my opinion) to mislead the very public the BBB purports to serve.

But of course the BBB knows that. They aren't dummies. They know that consumers should be concerned not just about how many complaints are lodged against a particular company, but how many per thousand transactions. Otherwise the consumer has no way to gauge the probability of his transaction resulting in a complaint Unfortunately, the BBB officials refuse to put such important comparative information in their reports.

This is not surprising, since a good part of BBB funding has historically come from retail stores. And these stores have no interest in painting a fair and honest portrait of their most dangerous competitors—the large mail order firms (like my own) that annually take hundreds of millions of dollars in business away from them.

Does my company generate a lot of complaints or not? Here's the answer, along with the information the BBB "forgot" to include in its report.

According to the BBB. the five "bad apple" firms it criticizes "drew some 55 percent of the more than 11.000 complaints received by the BBB for the last six months of 1989."

That* a total of 6.050 complaints. How many belong to my company? The BBB doesnt indicate. But what the heck—why quibble? Lett pretend all the complaints belong to me. Now take the more than 10-million transactions my company completed in the same six-month period and divide that figure into the number of complaints. Are you ready? Our "bad apple" complaint ratio turns out to be a shamefully outrageous 0.000605—or just over six one-hundredths of 1 percent!

That's not an indictment, it* a compliment. And a miracle—at least to anyone who knows anything about the mail order business. So why didn't it come out that way in the BBB report? Why indeed. Let* look a bit further

Z Your artide quotes the BBB as saying;

"Our records indicate the firm's failure to: eliminate the cause of complaints, deliver promised products as represented and substantiate advertising claims."

Strong words, but false ones. Nah. that's

A DME miUing piece too poetic. What I mean is. it* a damn lie. Does that mean the BBB told an actual lie? Of course no«. The BBB would never lie in public—not literally. For example, look at the BBB* weasel-wording of "Our records indicate..."

Sure, go argue with them about their own records. But other agencies have records too. And they indicate just the opposite. For example, as one of America* largest mail order companies, we are always a candidate for routine investigation by federal, state and local officials and consumer organizations all around the country. We handle countless inquiries from the public as well as the government—and we come up clean.

And that doesnt mean "they cant pin anything on us," or "we're getting away with something."

The Federal Trade Commission regularly examines our operation for compliance with mail order regulations. We cant avoid it—we gladly open our records to them—and they are quite satisfied with our handling of consumer inquiries and complaints. (In fact, the FTC told our attorneys, in February of this year, that we were setting new and higher standards for our segment of the industry.)

The New York state attorney general also watches us carefully, and in his action against us (more about that later) conceded that for the most part our products are worth the consumer* dollar. The U.S. Postal Service also looks over our shoulder (why not. we make them work hard) and they apparently have no problem with us either

So what the heck is the BBB talking about? To find out. let* look at the rest of their "objective" description of my company.

However, before we do. this seems like a good place to bring up another bit of "strategic omission" regularly practiced by the BBB—especially when alerting the public to the many "perils" of shopping by maiL (As opposed. I imagine, to the delights of shopping at the retail stores that fund the BBB and support its public utterances.) I refer to the fact that the BBB never mentions the kind of mail order complaints it is talking about

Perusing the BBB* many inflammatory reports on mail order complaints, the average reader might suspect sinister doings in the mail order business. And indeed the BBB encourages this attitude. But in fact the reason for most mail order complaints (including those received by my company) is not deceptive advertising or taking the money and running, but simple nondelivery.

Nondelivery...but isn't that sinister? It would be, if it were deliberate. But we all know (from the regular reports printed in DM New) that the USPS has serious nondelivery problems. In fact, some published studies indicate it fails to deliver as much as

18 percent of the bulk mail entrusted to it That there are so few complaints indicates that most companies do an incredible job of handling such problems before they ever get to the BBB, the USPS or the attorney general.

And speaking of the attorney general—that brings me to my next example of BBB reporting chicanery.

3. As I mentioned above, my company handles more than 20- million transactions a year And since we are not perfect, some of these transactions will undoubtedly be mishandled—by us. But by far the overwhelming majority of complaints will be the result of nondelivery due to postal failure. And when we hear from customers who have failed to receive their merchandise, we handle those complaints immediately. Gladly. After all. who wants an unhappy customer? So we reship at our own cost, and eat the loss in both postage and merchandise.

Unfortunately, however, we dont hear from everyone who has a nondelivery problem. That* because, ifourmailtothemcan get lost, their mail (o us can get lost too. And does. Then look what happens.

Let* say, hypothetically. that out of our 20-million annual transactions. 10 percent experience a nondelivery problem due to postal failure. So these two-million customers (deservedly annoyed) sit down and complain to us. But we can only satisfy 1,980,000 of them. Why? Because 2 percent (minimum!) of these two-million complaint letters never reach us due to postal failure. So now we have 20.000 customers who have graduated from being merely annoyed to being hopping mad. And what do they do? They complain to the USPS, the attorney general or the BBB.

That wouldn't be so bad if those agencies told us who these customers were, so we could answer them. But they dont Instead they "create a file." That means they let those complaints sit around, piling up, so that "we can build a case against those guys." Which eventually they do, and we get a phone call a letter or in some instances a lawsuit from the Consumer Affairs division or the attorney general* office.

Now you have to understand this:

For most consumer affairs departments or attorney general offices, overworked and understaffed as they are, five complaint letters ("ALL ABOUT THE SAME COMPANY FOR CHRIS-SAKES!") are a lot. And 10 or 20 (gulp) are a flood. So imagine how they feel when we drop 100-million pieces for one of our products and they get ("HOLY %#&") not

10 or 20 but over 100 complaints about the same company! It's like Pearl Harbor. And for months, maybe even a year or more, there's nothing but yelling and threats and the courthouse.

Then finally, a long time later, we iron it out. We show them our records, walk them through our company—even let them roam barefoot through our precious data banks. As a result, we succeed in convincing them, proving to them, that it wasni our fault And that we'll gladly fix it, satisfy every name on their list. Which we would have done in the first place, if they had only listened instead of threatening. I mean, the complaints represent our own customers, right? We paid a fortune to find them in the first place, so why on earth would we want them to be mad at us and not buy from us anymore?

Now pay attention to this (scandalously) intriguing fact

Strre Brown

Of all the complaints about our company (including those in the latest BBB report), an overwhelming majority (between 73 percent and 77 percent) had already been fuliy resolved by us, on our own, before we even knew that the BBB or any government agency had ever received those complaints. We know this for a fact. And I am sure the BBB knows it too—because we regularly prove it to the attorney general and the FTC in the form of company-certified and fully documented reports delivered right to their door every six to eight weeks for verification. (And they are verified against the agencies' own records.)

No other company in our industry goes to these lengths to prevent and eliminate customer complaints. That* why the FTC told our company it is "setting new and higher standards" for our entire segment of the industry. So how can the BBB (with a straight face) report on our "failure to: eliminate the cause of complaints-"?

What is going on here? What has happened to fairness and accuracy in reporting when a self-serving, self-appointed "guardian of the public" can concoct a report full of inaccuracies, innuendoes and falsehoods—yet receive uncritical acceptance and mass publicity from thousands of newspapers and hundreds of TV stations all over the country?

How can the media allow the BBB to regularly publicize alarmist reports about sinister mail order companies and huge floods of unresolved complaints when it knows that fully 75 percent of those complaints have already been resolved, beforehand, by the companies themselves? And in the case of my own company, the remaining 25 percent (up to % percent) are responded to within 48 HOURS of our receiving notification from the forwarding agency.

Why, then, is the BBB always bad-mouthing the direct marketing industry? Obviously, in my opinion, because the retail stores and associations that help fund and direct the BBB are frightened out of their minds by the rapid growth of direct marketing sales at the expense of retail sales. And I dont blame them for being scared. But I do blame the BBB for attempting to allay that fear by unjustly defaming the reputation of the mail order industry—and my company with it

And getting back to my company: Where does that leave the New York state attorney general^ suit against it—which, the BBB ominously hints, "is still pending in State Supreme Court"? Frankly, I doni know, because the suit is "still pending."

But the real question—the one the BBB left out—is what the suit is about. The fact of the matter is that the suit was brought after the New York attorney general received what he thought was an incredible number of complaints against us: exactly 726 complaints, in 18 months, from all over America.

I'll bet he thought we were the Jack the Ripper of mail order companies!

But then we got a chance to present the facts, after which, I think, we no longer seemed quite so dangerous or sinister. Especially after we explained that those

726 complaints represented over 30-million transactions handled during that 18- month period. Which meant our complaint rate was actually only 0.0000242—or 24 one-thousandths of 1 percent

So does the attorney general love us now? Nope. Because my company still feels like a bug up his—I mean a burr under his saddle.

You see, even though we dickrt do anything wrong, his office simply couldnl handle that many complaints—we were busting his budget So he was still mad at us, even though the nondeliveries weren't our fault and even though we had procedures in place to handle and satisfy every single nondelivery complaint we received.

So his suit sits there, "pending." Eventually it will probably be settled, and the attorney general will extract a "fee" to cover the stated cost of investigating us (which we will not, as a practical matter; be in a position to contest, because as he will point out to us, even if we go to court and win, the cost of legal fees will be far greater than the cost of settling; and be will be right).

Yeah, but is the case settled yet? Not yet When will it be? Who knows? Meanwhile, by referring to this suit in its report, without disclosing its nature, the BBB insinuates by sly half-truths and selective omission that we are in some way "bad apples." The only bad apple is a private organization that pretends to work in the public interest when in reality it has an agenda that conflicts with the public interest

{EDITOR'S NOTE: Sources in the New York attorney general's office confirmed that its case against the firm, filed in 1987, is pending, that no rulings have been issued against the firm by the court and that negotiations have been under way toward a settlement.)

The very fact that the attorney general^ suit is still "pending," without any injunctive or other relief having been granted by the court, indicates how ill-founded it was. (But hey, the AG certainly did get a lot of publicity in the press and on TV when he announced it And did you notice, sitting right next to him, posing for the TV cameras and prompting the press, was a representative of the BBB?)

As a matter of fact, didnt you print an editorial ("Direct Marketer of the Year," Aug. 1,1988) exposing the apparent insincerity of the attorney general* position in this very case? Sure you did. (Your reporter should have read it)

Yet the BBB tries to con your readers into believing, by quoting the horrendous claims of the original suit, that it is something more than a combination of misunderstanding plus the chance of free publicity for the attorney general—ever the astute politician.

(This is getting tiresome, so I'll finish quick.)

4. At the end of your article, the BBB tells your readers that in 1987 "the New York City Department of Consumer Affairs and Direct Marketing Enterprises entered into an Assurance of Discontinuance concerning the firm's advertising practices [and] our file shows that this company has an unsatisfactory record with the bureau."

Sounds real bad. right? Well, here's what the BBB left out.

The issue related only to a single advertisement for a single product sold by my company—a fishing-tackle set. It concerned only (pay careful attention now) the size of the typeface that appeared beside the photograph of the product, which read in its entirety: "Tackle box not included, see bonus offer." They asked us to set it a point larger, we said OK. End of story.

However, the BBB, as reported in your article, made it appear as if the matter involved not just one minor adjustment to a single advertisement but an attack on the entire advertising practice of my firm. But that's the way the BBB operates.

I certainly hope that in covering future reports emanating from the BBB, DM News will see itself not as a public-relations department for the Better Business Bureau but as an important voice for the direct marketing industry.

I recognize and applaud your willingness to keep an objective eye on the industry and to level criticism where it is warranted. But DM News' unquestioning acceptance of the standard BBB "line" is particularly surprising given your level of experience and sophistication in the field.

You know that I make a practice of specifically not writing about our industry, and have turned down numerous requests for articles. But I make an exception in this case because the BBB* assault on the industry (and on my company) is so outrageously unfair.

Anyway, rest easy. I wont Threaten to Cancel My Subscription if you dont print this letter (that would be cutting off my nose to spite my face). But you can be sure I'll think of something equally frightening—like maybe putting your name on my company's mailing list! ■

Sieve Brown is president of Direct Marketing Enterprises Ltd (DME), Westbury, NY.

Was this article helpful?

0 0