BBB Advises Businesses of Wide Variety of Consumer Arbitration Methods

August 03, 2009

BBB Urges Business to Consider “Consumer Friendly” Dispute Resolution Options

ARLINGTON, VA – July 28, 2009 - Better Business Bureau (BBB) is advising businesses today that there are many methods of providing arbitration services that can help consumers resolve disputes while allowing businesses to foster relationships with their customers. Recent criticisms of arbitration stem from a high profile complaint by the Minnesota Attorney General against National Arbitration Forum. 

“It’s important to remember that there is nothing wrong or unfair about impartially-administered arbitration as one important way to help resolve consumer disputes,” said Steven Cole, CEO of the Council of Better Business Bureaus. “Businesses have a number of options available to them that will make it much more likely that a consumer will use this fair, inexpensive, speedy and user-friendly forum to settle a simple buyer/seller dispute, rather than going to court.”

BBB has a lot of experience here, said Cole. “Over the past 25 years,” he noted, “the BBB system has resolved more than two million disputes through its BBB AUTO LINE Program; more than 300,000 of those were the result of decisions by BBB volunteer arbitrators, whose decisions were not binding on the consumers unless they accepted them. Regional BBB offices have handled many thousands of additional disputes involving various industries through mediation and arbitration in that same time period. Finally, BBBs assist nearly one million consumers every year who need basic complaint assistance resolving disputes with businesses. None of these techniques force consumers in advance of a dispute to use arbitration that will bind them to the outcome.”

BBB’s make available to businesses and consumers a number of techniques that provide fair arbitration forums that give consumers choices – thereby increasing trust between business and customer. These include:

• Agreements to arbitrate after a dispute arises. This allows consumers to consider their options knowing the nature of the grievance, evaluate the risks and benefits of arbitration versus other remedies like court, and to consult with friends, family and legal or other advisors. BBB experience is that consumers very often ask for BBB arbitration after the dispute arises for the simple reason that court actions are intimidating to many, expensive and delay relief.

• Conditionally binding (“first resort”) arbitration. Using this method — the method used in BBB AUTOLINE, the nation’s largest warranty dispute settlement program, and used by most of the auto industry to resolve warranty performance disputes — consumers may be required under their warranty to try arbitration before filing a court action. The result of the arbitration does not bind them or the business unless the consumer voluntarily accepts the decision. In BBB experience, this has been an attractive procedure for both consumers and businesses because it reduces the number of expensive court cases, yet at the same time affords consumers the opportunity to get relief where warranted and to get a realistic assessment of their position, all the while leaving the option to go to court open to them.

The 2008 BBB/Gallup Trust in Business Index found that consumers’ trust in businesses had fallen in 13 of 15 industries measured, and that nearly half (47 percent) of those surveyed said they had only “some, very little or no trust at all” in companies they do business with in everyday life. When compared to the 2007 Index, banks and financial institutions saw a 30 percent increase in respondents saying they had “very little trust” or “no trust” in the industry. 

“Given the steep drop in consumers’ trust in business the past few years, we are strongly urging businesses – from the largest corporations to the smallest sole proprietor – to consider more customer-friendly dispute resolution options in their continuing efforts to provide customer satisfaction and build consumer trust, " Cole noted. 

“Our experience is that when fully-informed consumers are offered these 'customer friendly' options, they use them, they don’t usually go to court, and they are likely to recommend this form of dispute resolution to family and friends.”

About BBB Arbitration
A BBB Dispute Resolution Fact Sheet is available online.  To set up an interview with a BBB spokesperson or subject matter expert, please contact Alison Southwick at 703-247-9376 or email.

About BBB

BBB, the leader in advancing marketplace trust, is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than four million local and national businesses and charities. Please visit for more information about BBB.