BBB surprises Johnson Health with ‘F’ rating; SNEWS questions broader BBB inconsistencies

A surprise “F” rating by the Better Business Bureau for fitness supplier Johnson Health is only the tip of the iceberg for both fitness and outdoor companies. SNEWS peeks behind the BBB curtain and finds broader inconsistencies. Do you know your rating?
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A press release, news headlines and rampant industry gossip whacked fitness manufacturer Johnson Health Tech broadside after the state’s Better Business Bureau issued a press release announcing the Wisconsin-based manufacturer had an “F” rating due to “a growing trend of complaints” -- without first alerting it to the pending release or seeking comment.

However, the issue is less about JHT’s rancor-raising rating, but rather it is about how that surprise rating brings home to the fitness and outdoor industries the inconsistencies and questions that have plagued the BBB in recent years.

In JHT’s case, the rating was changed to a C- three business days after the BBB issued the PR -- apparently, the same day the company had an intense phone call with Wisconsin BBB representatives -- but not before the regional Wisconsin paper ran a headline, customers’ queries flooded into JHT’s headquarters, and SNEWS® was forwarded the link by competitors.

According to the BBB’s March 17 release titled, “Complaint trend exposes Wisconsin exercise equipment distributor”: “In the past 36 months, the BBB has processed 43 complaints against Johnson Health Tech/Horizon Fitness, with 12 of those occurring since January 1, 2010. These complaints range from faulty advertising and customer service to delivery and product issues.” (Note: On the Wisconsin state’s Better Business Bureau’s website, 42 complaints are cited.)

“We are outraged by the actions of the Better Business Bureau, as should all businesses in our industry and others,” Chris Clawson, JHT CEO, told SNEWS. “It is inconceivable how an organization with ‘Better Business’ in its name can act so irresponsibly.”

Better Business Bureau ratings and business

It seems this is not the first incident of a company being blind-sided by the Better Business Bureau, whose motto is “Start With Trust.” An ongoing special investigation on the web that was launched in March 2009 has been revealing what it calls a pattern of inconsistencies, aggressive BBB sales tactics and lack of oversight that SNEWS has also discovered. Click here to access the BBB Roundup investigation

SNEWS took a quick look at the ratings and complaint numbers of a few other major fitness equipment manufacturers and outdoor companies for perspective and found a widely disparate range that continues to draw into question the BBB operation. The standard reporting period is the previous 36 months. As of March 24, 2010:

>> Icon Health & Fitness was shown to have 472 complaints and had a rating of C-

>> Nautilus had 131 complaints and a rating of C.

>> Precor had four complaints and an A rating.

>> Star Trac had two complaints and an A- rating.

>> Life Fitness had 10 complaints, but pulled an F rating.

“I’m flabbergasted at the F rating on 10 complaints,” said Brent Hutton, Life Fitness vice president of the consumer group, who first heard about the F when he was called by SNEWS. “Nobody has sent us one complaint. How can you address this if you don’t receive them?

“It’s inconsistency across the board, it seems,” Hutton added. “We’re not going to take this lightly.”

>> Thule had five complaints and an F rating.

>> Yakima Products had four complaints -- just one fewer -- and a rating of B+.

>> Marmot Mountain had two complaints and a B- rating.

>> ExOfficio, sister company to Marmot, also had two complaints, but gets an A.

>> The North Face has 21 complaints but garners an A+ -- and it is the only company on our list of both fitness and outdoor companies that is a “BBB accredited business.”

Until nearly three years ago, a company was called a BBB member. Now, “members” are called an “accredited business,” which means they have applied for membership and make “a commitment to make a good faith effort to resolve any consumer complaints,” per the BBB. BBB accredited businesses must also pay a fee “for accreditation review/monitoring and for support of BBB services to the public.”

“We received the two complaint letters from the BBB, which caught us a bit by surprise as they were the first we’d ever received, and then we did get a sales pitch to become a member that came very shortly after the letters,” Mark Martin, president of Marmot Mountain, told SNEWS, adding that the company declined to become a member.

The Better Business Bureau is not a government agency but is a non-profit network of regional and state agencies, all of which operate independently as members of the national Council of Better Business Bureaus. The mission of both the council and the individual agencies, as stated on the website, is a dedication “to fostering honest and responsive relationships between businesses and consumers, instilling consumer confidence and contributing to a trustworthy marketplace for all.”

There is no set method for calculating ratings. Per the BBB website, “ratings are determined by a proprietary formula that represents BBB’s opinion as to (1) the importance of each category, and (2) the appropriate score given to the business for each category. BBB assigns grades from A to F with pluses and minuses. A+ is the highest grade and F is the lowest. The grade represents BBB’s degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns filed with BBB.”

Click here to check out a company. (Tip: Do not check the box to limit the search to “accredited businesses,” and only input the state.)

Johnson’s surprise

In Johnson’s case, the company received a call from a reporter at the regional Wisconsin State Journal newspaper on March 17 seeking comment about the F rating discussed in the press release the newspaper had received that day. Shocked, Johnson representatives scrambled out a response but had not seen the release.

“We were dumbfounded why this came to be,” Johnson spokeswoman Patty Parrot said.

Susan Bach, director of communications for the Wisconsin BBB, told SNEWS, “On Feb. 19, 2010, we sent them a letter via certified mail asking them to address a pattern of recent complaints. Prior to that, in January, March and May of 2009, we sent them requests for basic background information about their company via regular mail. And, on February 19, 2010, we sent them an additional request for basic information. That request was either email or regular mail.”

On March 18 -- the same day the story ran -- Johnson also sent a response to the paper’s editor that said, in part, in its defense:

“In January 2010, the Better Business Bureau received 11 complaints about our company. During that month, Johnson Health Tech NA received a total of 42,825 calls to our service department. (These calls range from basic questions about product to routine service call requests.) Our response time to these calls was within 30 hours on average. The 11 complaints we received in January were responded to in less than 24 hours time.

“The Better Business Bureau also reports that they received 44 complaints in the last 36 months. Johnson Health Tech received 783,359 calls during that time period. The 44 complaints average out to 0.0056% of our total call volume over the 36-month period.”

On March 22, several representatives from JHT had a telephone conference call with the BBB representatives who allegedly said the press release and the F rating was based on JHT not returning a company profile form. BBB told JHT it had sent the form three times. JHT said it had not received a form and acknowledged it was likely put on an incorrect desk and then misfiled, since it was considered “routine.”

“They issued a slanderous press release, full of misinformation, without a call or an email to our organization to follow-up on what we viewed as a routine communication,” Clawson said.

“When asked to defend their course of action, the BBB could not substantiate the claims made against our company. Rather, they simply indicated they were justified because we did not fill out the business profile sheet, which asks for such relevant information as company name, address and principles.

“This,” he added, “should be alarming to us all.”

Bach replied, “The Wisconsin BBB will send out consumer alerts or press releases periodically when we feel it’s necessary. The circumstances that prompted the release regarding Johnson Health Tech were not that it had an F rating. Rather, it was that the company had a pattern of complaints that concerned us, an increase in complaints in a short amount of time, had some unanswered complaints, and was unresponsive to us when we contacted it regarding our concerns.”

The “form”

According to Parrot, however, every time the company asked for additional detail and background, the BBB pointed to the lack of the form. The form, called a “Standard Business Questionnaire,” asks for basic company contact information, plus information about business type, product type, business size, annual revenues and numbers of customers. Apparently, since the BBB did not know how large JHT was, according to Johnson representatives, it assumed the complaints were affecting a large number of its customers, thus the F rating.

Soon after the March 22 call, the BBB website was modified since the rating on JHT’s page had morphed into a C- and the write-up included this statement: “On March 22, 2010, the company informed the BBB that complaints on file with the BBB are a small percentage of their customer base, and are resolved in a timely manner with the customer once brought to their attention.”

According to Bach of the BBB, “The Wisconsin BBB is still waiting for the company to return a completed ‘Standard Business Questionnaire’ that provides basic background information to the BBB regarding the company’s size and structure, among other things.”

Clawson noted that the BBB rating had been suddenly elevated, but “to date, we have not yet completed the profile sheet.” Bach acknowledged the JHT rating was upgraded because the company had “responded to previously unanswered complaints.”

In cases of low ratings, it seems the lack of this company profile information may have an influence. On the Life Fitness page, this statement appears: “BBB does not have sufficient background information on this business.” On the JHT page, a similar disclaimer appears about not having accurate information about the company.

“Since some of our rating elements are affected by size of company, length of time in business, etc., it’s very important that the company provide basic background information,” Bach said. “Once we have received this (company profile) information, the company’s rating could change significantly.” She added they would consider sending out another press release if there is a change.

Johnson representatives told SNEWS the company will file an official complaint with the BBB’s governing body and will consider other actions.

“And,” Parrot said, “we’ll be filling out the form.”

--Therese Iknoian with Michael Hodgson

SNEWS® View: We at SNEWS highly recommend that every single company and retailer and any other business check out its ratings immediately. You can’t know what surprises await, and it’s better to find out yourself than have it unknowingly affect your business. Take a look also at the BBB Roundup investigation we cited in the story since it lays out many of the inconsistencies and questions in detail that SNEWS discovered in its short investigation. Please let us know what you find out, if your own look provides surprises, if you decide to take any actions, or if you write any letters by emailing us at snewsbox@snewsnet.com.

--SNEWS® Editors

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