10 Companies with Terrible Reputations

Companies can be researched in two sets. One is public research about consumer satisfaction, customer care, pricing of products and services, and brand impressions. Another factors includes profit forecasts, present earnings, product development, brand valuation etc. 24/7 Wall St. has reviewed a long list of companies to choose the 10 companies with worst reputation. Have a look……

Facebook

Today Facebook has more than 800 million users. Any company of this size is certain to have some critics. In contrast to other top social media sites, Facebook is said to have the lowest customer satisfaction score from the American Customer Satisfaction Index. The site has constantly annoyed users by ignoring personal privacy. Prominent actions include the introduction of facial recognition software, which encouraged an investigation by the European Union, and the Facebook timeline. Facebook received huge negative press for compelling the users with new settings that changeds how their personal information is shared with others. Mark Zuckerberg, CEO, made a statement saying that the company will no longer do this. 25.9 percent of Facebook users described the company’s customer service as “poor” — the lowest rating, according to the MSN Money-IBOPE Zogby International customer service survey for 2011.

 

 

Nokia

The shareholders of Nokia were punished as its percentage of the smartphone market has dropped quarter after quarter and last the stocks went down 50 percent. Nokia is expected to lose its lead as the top handset company in the world to Samsung in a short time this year. According to JD Power’s 2011 Wireless Traditional Mobile Phone Satisfaction Study, Nokia was tied for lowest overall satisfaction. It also has got the lowest ACSI score for wireless telephones. Nokia’s brand value has dropped by 15 percent from last year, according to Interbrand. Nokia has tried to recover its chances through an agreement with Microsoft whose Windows OS will be used in Nokia smartphones. in spite of rage reviews for the new Windows Mobile, a partnership with the feeble mobile OS maker only makes Nokia’s fortunes worse.

Johnson & Johnson

Johnson & Johnson has gone through a series of product recalls and problems that began with Motrin and Tylenol for children. These recalls were amid “more than two dozen that J&J has issued since September 2009, for products ranging from adult and children’s nonprescription Tylenol, Motrin, Benadryl and other medicines to prescription drugs for HIV and seizures, defective hip implants that caused severe pain and contact lenses that irritated the eyes,” according to Associate Press. The parents of a two-year-old who was treated with one of the tainted batches of Children’s Tylenol lately sued the company for the unjust death of their child. In March 2011, the FDA took over three Tylenol plants owned by Johnson & Johnson. The recalls have started to harm the company. Third-quarter 2011 sales of over-the-counter drugs fell 24 percent from the previous year. The company executives certified the major loss of market share to quality issues that kept products off shelves, according to Bloomberg. The long series of problems has ruined what was once a sterling reputation. Since the disclosures mounted two years ago, Johnson & Johnson shares are flat while the DJIA is up 17 percent, over the past year.

 

Goldman Sachs

The pitiable reputation for Goldman Sachs was cemented when it was sued by the government for fraud in 2010. The firm made a settlement with the government for $550 million, but this was sighted as little more than a slap on the wrist because of the bank’s huge wealth. And the fraud allegation has not come to an end; they have in fact picked up the pace. Goldman faced a set of suits over mortgage instruments it sold worth a total of $15.8 billion. Goldman was accused the Federal Housing Finance Agency in September for misrepresenting the quality of $11.1 billion worth of residential mortgage-backed securities. In the cases in which Goldman has settled claims, the press has not always been positive. Goldman agreed to forgive 25 percent of principal balances on 143 mortgage loans to borrowers in New York, or $13 million of a total principal balance of $52 million according to a Wall Street Journal report.

 

 

 

Netflix

Netflix had one of the utmost customer satisfaction ratings of any big consumer-facing company a year ago. Its stock deals at an all-time high of $305 and has dropped to $90 in less than six months. One of the primary causes was the raising of customer rates by 60 percent last August. According to the company’s third-quarter earnings report, the move reasoned the loss of 810,000 subscribers and set off a firestorm of customer complaints. CEO Reed Hastings said at the time that the cancellations would persist until “the price effect washes through.” The final damage done to the company is inestimable. It had ranked number two on the list of ForeSee’s online retail quality list a year ago, just behind Amazon. It knocked down to 18th place in this year’s survey. Netflix shares were among the greatest losers on Nasdaq last year. The stock shed 62 percent of its value, almost all in the final four months of the year.

 

 

 

AT&T

JD Power has given the lowest score to AT&T for wireless customer care performance. It was also ranked low by ACSI for customer service. AT&T has been persistent with problems in its 3G network, which are now largely behind it. The company faced an attack by the press and the government when they saw the company making an attempt to set up a monopoly through its buyout of T-Mobile. Consumers had apprehension that the combined company would have unexpected powers to set prices. According to Consumer Reports, the wireless carrier also established the lowest satisfaction rating for cell-phone standard service providers. The MSN Money-IBOPE Zogby International customer service survey reports that 26 percent of customers rate service as “poor.”

 

 

 

Best Buy

The electronics retailer shattered the key rule of customer relations as it failed to keep a promise to its customers and told them when it was too late. Best Buy ran out of some particular items that people had ordered for Christmas, but did not inform the customers until two days before the holiday. An article in a Forbes argued that Best Buy will slowly go out of business, and the author pointed out that the retailer’s explanation made it appear that some force from outside the company resulted the problem but this was not the case. According to the press release, “Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders.” It is still a  question to be answered that did Best Buy encounter the problem, or did the problem encounter Best Buy? In a recent Retail Satisfaction list for the holidays by ForeSee research,  Best Buy rival Amazon.com was at the top and  Best Buy was not even in the top 20.

 

 

 

Bank of America

Bank of America made an announcement in September that it was laying off 30,000 people and its share value has dropped 55 percent in one year. The bank continues to deal with legal actions from the federal government, several states and some of its shareholders. In early September the FHFA officially announced its lawsuit against 17 banks, including Bank of America, JPMorgan Chase, Citigroup , and Goldman Sachs, with reference to $196 billion in mortgage securities. Bank of America has even been charged with keeping one of its major legal threats a top secret from shareholders. Top Bank of America lawyers knew as early as January that American International Group was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed, according to Reuters. Retail customers have shown their contempt for Bank of America’s customer service. Not only is it near the bottom of many customer satisfaction surveys, 41.5 percent of respondents in the MSN Money-IBOPE Zogby International customer service survey rated its service as “poor.” That is the maximum percentage of respondents giving a “poor” rating to any company.

 

 

American Airlines

Of late American Airlines has been picked as the worst airline for customer service by the annual Middle Seat scorecard, published in the Wall Street Journal. The survey’s authors said, “For the past five years, American has been among the worst three airlines at on-time performance, a key measure of an airline’s operation since it impacts mishandled bags, bumped passengers and even canceled flights and customer complaints.” The report mentions that the airline was the most awful among major carriers last year for baggage handling and canceled flights, canceling 70 percent more flights than United and Delta. With a score of 63 in the American Customer Satisfaction Index section on airlines, American fits somewhere in the the bottom, below leader Southwest which has a score of 81.

 

 

 

Sears

Sears has done a pathetic job with customers in the past year, and the parent company has done badly for Wall St. since Sears merged with bankrupt Kmart in 2005. The management of both brands has been so terrible that shares in Sears Holdings have dropped 60 percent in the past year. Sears has been the major problem. In December, S&P sited Sears Holdings’ credit rating on review for a probable downgrade. The ratings agency said “We believe that one of the primary issues is that the company has underinvested in its stores base, especially when compared with its peers.” Sears.com did on the whole badly in the recent ForeSee holiday online shopping customer satisfaction survey. It ranked sixth from the bottom out of the 40 companies on the list. The American Customer Satisfaction Index for Department and Discount Stores also graded Sears near the bottom of the list, along with Kmart.