ERA Considers Adopting BBB Dispute Resolution

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MIAMI BEACH, FL -- Electronic Retailing Association members were advised of the benefits of dispute resolution last week at the ERA's Mid-Winter Conference & Trade Expo.

Rodney L. Davis of the Council of Better Business Bureaus and ERA director of government affairs Bill McClellan took questions at a surprisingly sparsely attended session about how marketers can avoid problems with the Federal Trade Commission by working with the Better Business Bureau.

The ERA implemented a self-regulation program in partnership with the National Advertising Review Council 18 months ago to improve industry business practices and increase consumer confidence while giving direct response professionals a forum to review claims independently of federal regulation.

The program seems to have satisfied the FTC about practices on the front end of the direct response industry, but the ERA is investigating using the Council of Better Business Bureaus' dispute-resolution program to improve things on the back end.

The dispute-resolution service aims to determine what is causing the disconnect between a consumer and a business, Davis said. It provides a way to handle both legitimate complaints and those consumers "who never go away." Dispute resolution benefits marketers by letting them pass persistent complainers onto a third party.

However, ERA members had concerns about the program. Many members thought there wasn't enough transparency in how the council rates a company, and they wanted assurance that standard criteria exist. Davis said companies are rated by four major components:

· Is the complaint volume reasonable for the industry and level of sales?

· Is there a specific business practice causing a pattern of complaints not being addressed?

· What action does the company take, if any, when complaints are brought to it by the Better Business Bureau?

· Has any legal or regulatory action been taken against the business?

· Another issue raised by members was a lack of consistent standards among bureaus on a local level. It frustrates a national marketer when a dispute solution is acceptable to one bureau but not to another in a different region.

· Davis suggested ways to avoid problems with regulators:

· Make it easy for consumers to complain by providing contact information, because otherwise they'll go to the BBB, the state attorney general's office or the FTC.

· Know your local contact at the BBB and ensure it has the correct contact information for your firm.

· If there are complaints that you can't resolve, use dispute resolution. Don't make the customer sue you.

Edward F. Glynn Jr., a partner in the law firm Venables, Washington, DC, added this tip: ensure that the companies delivering on the back end refer all complaints immediately. Problems often arise from a lack of information flow between the front and back end of the sales process.

Sarah Littman is an editorial page columnist for the Greenwich Time and author of "Confessions of a Closet Catholic" (Dutton Children's Books 2005), coming out in paperback in May, and winner of the 2006 Sydney Taylor Book Award.

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