CEO of Los Angeles BBB resigns over controversy

The head of the Los Angeles Better Business Bureau resigned following a news report that alleged the chapter would award paying BBB members better ratings than other companies.

William Mitchell, the CEO who introduced a controversial letter grade system for L.A. businesses, has been accused of only giving A+ ratings to companies that pay BBB membership, according to a report from ABC News. Many business owners believed there was something amiss about the ratings system and set out to prove the BBB was acting improperly.

Several business owners opened a number of memberships for phony businesses, all listing Mitchell as their president and bogus addresses, and some were awarded grades as high as A and A-, the report said. Another investigation caught BBB telemarketers saying a business' C grade could be boosted to an A+ if they purchased a membership.

The national BBB head office is now conducting an investigation into the charges, which may be what prompted Mitchell to quit, the report said.

Mitchell, a former board member of SpringBoard Credit Counseling, had long been a vocal opponent of legitimate debt settlement services, saying they were only designed to rip off consumers.