Complaints, losses spur BBB shakeup

September 14, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

The Better Business Bureau of Greater Maryland Inc. -- the nonprofit association that encourages local businesses to behave ethically -- is being reorganized to address declining membership and allegations that its salesmen used improper pitches to persuade local businesses to become dues-paying members.

Malcolm C. Taylor, a Towson-based accountant and chairman of the BBB's governing board, said yesterday that longtime BBB President Philip Kershner had resigned effective tomorrow. Other personnel changes will follow, Mr. Taylor said.

Mr. Kershner did not return messages asking for comment. Contacted through a co-worker, he referred calls to Mr. Taylor.

Mr. Taylor said the board had been considering a reorganization for more than a year because of a recession-induced drop in membership from a peak of more than 4,000 in the 1980s to about 3,000 today.

The board members also were "very concerned" about complaints they received from local businesses that BBB salespeople were using too hard a sell to win new dues-paying members, Mr. Taylor said.

Lucy Weisz, deputy chief of the Consumer Protection Division of the Maryland attorney general's office, said yesterday that her office had received complaints in the last several years that the BBB used improper sales tactics in recruiting new business members. She said she couldn't comment on investigations, but noted that her office never filed formal charges about the complaints.

The September issue of Income Opportunities, a New York-based business magazine, reported that salespeople at the Baltimore BBB office followed high-pressure -- and sometimes inaccurate -- scripts when calling new membership prospects.

The article said BBB sales scripts had telemarketers tell prospects that the bureau had received many calls asking about their businesses, even though the BBB often hadn't received any calls.

Mr. Taylor said that if a company that was a member of the BBB was proven to have used such tactics, it would likely be kicked out of the organization. But, he said, much of the article was inaccurate and that no one has proved that the Baltimore office used unethical tactics.

He added, however, "I cannot say conclusively [the BBB] did not" use improper sales pitches.

And, Mr. Taylor conceded, "Of course, I see an irony here."

In response to the concerns, the board, made up of local businesspeople, decided to reorganize the 23-person bureau and revamp the association's sales effort, he said.

"We're going to get professionals," he said. "And our sales effort is going to be less telemarketing and more [face-to-face] calls.

"We are making sure it doesn't happen in the future."

The reorganization comes as the BBB faces financial difficulties caused mostly by the decline in the number of dues-paying members. To raise additional cash, the BBB last year started charging callers for information about local businesses.

The BBB is operating in the black so far this year, Mr. Taylor said, but it lost money last year and in several of the past 10 years.

According to the BBB's 1994 tax return, provided to The Sun by the Center for Investigative Journalism, the BBB took in $959,249 last year but spent $1,005,049, running a deficit of $45,800.

Mr. Taylor insisted that the personnel changes had nothing to do with discrimination and sexual harassment charges made in a lawsuit filed against the BBB and Mr. Kershner by a file clerk, Joann Bryant.

In her lawsuit filed in Baltimore's U.S. District Court, Ms. Bryant -- who is deaf -- said Mr. Kershner and other employees made fun of her disability. In addition, she said Mr. Kershner kissed and fondled her several times despite her protestations.

Robert C. Morgan, attorney for the BBB and Mr. Kershner in the case, said that his clients deny all of Ms. Bryant's allegations, and that Mr. Kershner's departure has nothing to do with the lawsuit.

The board is searching for a new executive to lead and reform the BBB, Mr. Taylor said.

"I think the bureau needs to do a better job communicating to its members the benefits of membership, which are numerous," he said. "We provide seminars, networking opportunities and arbitration for resolving consumer disputes.

"When a consumer calls with an inquiry, we will identify them as a member. Our plaque demonstrates to the public when they walk into a member store that you are a business that has high ethical business standards."

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