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A Price for Better Business?


When the Southland Better Business Bureau started its fee-for-service system in October 1994, the staff was skeptical. "Traditionally we have never charged for information and we were afraid people wouldn't accept it," said Kathy Almanzar, a staff consultant. "Instead, they're getting better service--we've doubled the number of complaints we can handle."

The Southland bureau is one of a handful around the country testing a controversial plan that breaks with tradition. After more than 80 years of dispensing free information to consumers, the 137 bureaus are voting on a resolution that would allow them to charge a small fee for "value-added information" when consumers request business reports or complaint resolutions.

The purpose is to increase revenues and improve service for the nonprofit system, which receives more than 10 million calls each year. The plan has been sharply debated in the BBB world. Opponents fear that the break with a tradition of free information, which has made the bureau a household word, would discourage people from calling, particularly low-income consumers who most need the service. Proponents emphasize that the added fees are nominal and apply only to a broader range of service, leaving the basic free service still available, mostly for information by mail.

"When you talk to people in the bureau system who haven't tried it, they are dead set against it," Almanzar said. The Southland BBB, the nation's largest, serves Los Angeles, Orange, Riverside and San Bernardino counties. "I was doubtful at first, but I think now we are able to give better service." The Southland group offers callers the choice of filing a complaint by mail for no charge (the old way) or paying a fee (95 cents a minute on a 900 number or a flat $2.75 if charged to a credit card) to reach a bureau operator immediately.

"The service we've added is that you pay a fee to talk to a human being so that you don't have to write to us," said Bill Mitchell, president of the Southland BBB, which has a staff of about 80. "At least 80% of the people--given the choice--will opt to pay the fee for immediate service. Our complaint volume has doubled from about 20,000 a year to almost 45,000."

Personal interviews are a speedier way to process complaints, he said, because staff members don't have to wade through a written complaint: "People will write a book." Consumers requesting a reliability report about a company can get a report, as always, for no charge, he said. "Or you can choose to pay and get a report with more in-depth details."

His office issued 475,000 reports last year. The data base offers a record of how companies deal with their customers, how many customer complaints they've received and how reliable they are likely to be.

The added income has gone into a voice mail system and other technology, Mitchell said. If the new plan passes, each bureau can decide whether to implement it. The New York bureau opened the door to change in 1991 when the caller volume overloaded the system with busy signals. The vote deadline is July 15. If the resolution fails, the pilot programs must be discontinued by year's end.

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