Does Trump University's BBB rating count for anything?
Republican presidential candidate Donald Trump would like everyone to know that his Trump University earned an A from the Better Business Bureau. Meanwhile, his rival Marco Rubio wants everyone to know that Trump U. really earned a D- from the ratings organization.
Not surprisingly, these conflicting views of the same business have sparked debate and questions about the quality of Trump University, which the real estate mogul has lauded as having a 98 percent satisfaction rate with students. Yet there's another question that may stump both fans and critics of Trump alike: What does a BBB rating mean, and does it actually matter given the rise of consumer ratings sites such as Yelp and social media?
The century-old Better Business Bureau is often thought of as a byword for quality, providing consumers with guidance about whether enterprises are trustworthy or if they should be avoided. In recent years, however, the BBB has come under increasing scrutiny about its policies and whether its grading system accurately reflects a business' quality.
Take Starbucks (SBUX), for instance. The coffee chain gets dinged for the price of its lattes, but it's not known for duplicitous or underhanded behavior. Last year, it earned a 74 rating in the American Customer Satisfaction Index, slightly lower than some other speciality food stores but higher than McDonald's (MCD) 67 rating.
It's a different story when one looks at the BBB's rating of Starbucks: D-. The reason for the low grade is Starbucks' "failure to respond to 5 complaint(s) filed against business" and "13 complaint(s) filed against business that were not resolved," according to the bureau. By comparison, McDonald' receives an A+ rating from the BBB.
Starbucks didn't immediately return a request for comment.
While no business is perfect, it may be hard to put much faith in Starbucks' BBB rating, given that it's based on just a handful of complaints for a chain with more than 23,000 stores and millions of customer visits each day.
Another popular company with a poor rating from the BBB is Uber, which receives an F. Many big companies receive no rating at all, such as PayPal and eBay (EBAY).
On the other hand, there are cases where businesses with serious problems have received top grades from the BBB. CNN Money found last year that more than 100 businesses with "A" ratings were dogged by issues such as government lawsuits and allegations of fraud. In 2013, the BBB's largest chapter was ousted from the organization after it was accused of demanding that businesses pay membership fees to secure good ratings.
The bottom line: The BBB rating for Trump University -- whether it's an A or D -- may not tell consumers much of anything about the business. A better gauge of the educational program may be the three lawsuits filed against the company, with more than 150 former students alleging they were defrauded.
One former Trump University worker said she heard representatives telling poor would-be students, "It's ok; just max out your credit card." CBS News reports, citing court documents. A former student, who signed up for a $35,000 package, said he was told, "They said to call the credit card companies and make a request and try not to take no as an answer."
As for Trump, he has defended the university, saying on Face The Nation that, while he "could have settled" the lawsuits, he prefers not to. On a promotional video, he claimed to handpick all the instructors, but in depositions he has admitted that he "didn't pick the speakers."
Some, he said, "slipped through the cracks."