How to Find Out if a Business is Reputable

by Gail Sessoms - Updated September 26, 2017
Check the reputation of a business by confirming compliance with laws.

Consumers lose millions of dollars annually to unscrupulous businesses, according to the Better Business Bureau, or BBB. The BBB recommends that consumers avoid becoming a victim of unfair and illegal business practices by getting all agreements in writing, carefully reading contracts before signing and avoiding too-good-to-be-true scams. Consumers can weed out risky businesses by checking first with organizations that maintain records on consumer complaints against businesses and compliance with laws, regulations and industry standards.

Conduct a free check of the business’ records with your local Better Business Bureau, or BBB. Nationally, the BBB maintains records on nearly 400,000 member businesses and also keeps records and business reviews, including complaints, on about 5 million businesses in North America. The national BBB website provides an online process for checking on a business.

Check with your state attorney general’s office for complaints or legal actions against the business. State attorneys general are the consumer protection arm of state government. Attorneys general offices investigate consumer complaints and enforce laws governing certain business practices.

Confirm that the business has all licensing required by local government, such as licensing and inspections. For instance, states require licensing and inspections for child care centers. California’s Contractor’s State License Board provides an online service for consumers to check a home improvement contractor’s license and complaints before hiring.

Verify with the appropriate organizations the status of accreditations and certifications. A carpet cleaning business might advertise its certification by the Institute of Inspection, Cleaning and Restoration Certification, which certifies that the business has insurance and the owner has completed education and testing, and maintains the certifying organization’s standards for business and ethics.

Verify the business’ insurance coverage, including appropriate bonds. A reputable business protects you and your property against financial loss resulting from its services.

Read customer or client reviews about the business. Services such as Angie’s List, which provides online business reviews, publish customer reviews on business and services in more than 500 categories. Similar services operate locally in cities and communities.

Tips

  • Contact the Internet Crime Complaint Center, or IC3, to file a complaint about online scams, such as phishing emails or deceptive information on a website. IC3 is a program of the FBI in partnership with other federal agencies. Learn about the Federal Trade Commissions Cooling-Off Rule, which allows you three days to cancel a purchase of $25 or more made in a place other than the seller’s place of business.

About the Author

Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.

Photo Credits

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