Better Business Bureau (BBB)

Historical Background

Consumer activism is not a new phenomenon. Its roots can be traced back to early political economists such as John Stuart Mill and Adam Smith, who recognized that consumption was linked with politics and social organization. The modern consumer movement in the United States dates to the 1930s, to the period between the World Wars, when consumers lobbied for a more equitable tax system, price control, social security, and more stable labor-management systems. Writers such as Kathleen Donohue point to the establishment of the Consumers Advisory Board of the National Recovery Administration and the Office of the Consumers Counsel General within the Agricultural Adjustment Administration during the presidency of Franklin D. Roosevelt as a mobilization [Page 166]and institutionalization of a wave of citizen consumers. It is within this overall consumer context that the BBB is situated.

From the inception of the BBB, its major concern has been the issue of business ethics. One area of concern was that of advertising, which until 1880 was completely unrestrained. Some advertisers were making unbelievable claims, and the first acknowledgment of the overinflated claims made by advertisers first appeared in the Farm Journal in October 1880. The publishers of the Farm Journal declared that they would make every effort to ensure that advertisements that appeared in its pages were signed by trustworthy persons and went further by stating that they would make good on any losses suffered by a consumer as a result of a published advertisement. At the turn of the 20th century, the infant advertising industry established its own self-regulating organization known as “Vigilance Committees,” which was devoted full-time to eliminating abuses and creating advertising codes and standards. Within a year, vigilance committees were established in Boston, Milwaukee, Atlanta, Des Moines, Seattle, and Denver. The Advertising Club Volunteers operated the vigilance committees, examining newspaper ads and contacting those suspected of making false claims and attempting by moral persuasion to appeal for voluntary ethical business practices. The publication of information called the attention of the public to those companies that were not willing to voluntarily reform their advertising. Within a few years, consumer complaints included demanding refunds and repairs or replacement of products or services. Eventually, the work expanded to consider the ethical issues involved in consumer complaints. If companies failed to resolve complaints, public reports were issued, resulting in an increased awareness among the public of the unethical activities of businesses. With the increased public awareness of the vigilance committees, it was inevitable that a consumer would inquire about the reliability of a company with whom the consumer was considering a business relationship. Thus the Reliability Reporting service of the BBB was initiated.

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