When applied as a test of a person’s behavior or actions, the word “legal” is straightforward. A statute is enacted that can be enforced, leading to possible jail time or penalties. And it goes on one’s record.

Now, what comes to mind when you think of the word “ethical”? It’s an entirely different ballgame because ethical is open to interpretation – in the eye of the beholder.

Many businesses join trade associations and earn special certifications based on their adherence to standards or codes of conduct. But despite these best efforts to set the bar high, unethical behavior in the marketplace still goes undetected, overlooked or ignored.

Just because an act is legal doesn’t make it right, especially when it comes to business practices. There’s a huge gray area, as evidenced by these examples that tend to proliferate in Los Angeles:

• An apartment owner takes a cut for directing jobs to a towing company that preys on vehicle owners who have the least chance of successfully fighting inflated charges.
• A furniture store makes more money selling worthless warranties than selling sofas and end tables.
• A hair salon raises its prices just before holidays or special events – often for obscure, marginally effective products. The owner boldly says the more something costs, the more customers crave it.

These examples from Better Business Bureau complaint files might meet the test for legality, but most of us would agree they’re unethical. Yet business owners will rationalize borderline or downright unethical conduct, blaming it on the cost of doing business, competition or excessive regulation. In the end, coloring outside the lines to pull in more revenue with little or no concern for the customer can hurt a business as much as illegal activity, resulting in lost revenue and a tarnished reputation.

At the BBB, we’ve seen it happen in some fairly egregious ways. Given that there are more than a million businesses in Los Angeles County, it’s no stretch to say that each day hundreds of consumers fall victim to scams and dishonest dealings, such as:

• Loan companies that collect upfront fees then disappear.
• Locksmiths, carpet cleaners and movers who advertise misleading prices then upcharge at the time service is rendered.
• Businesses that bury basic contract terms in the fine print and fail to verbally explain them, such as automatic lease or membership renewals and no-refund policies.

There is a massive amount of gray area because determining what’s ethical falls to individuals and institutions rather than to law enforcement and the judicial system. That’s why the BBB has played a critical role for more than a century in fostering ethics and trust in the marketplace. The BBB believes it’s possible – in fact, imperative – to serve the best interests of both businesses and consumers. The two don’t have to be mutually exclusive.

We put applicants through a rigorous certification process before they can become a BBB Accredited Business. We offer free advice to business owners. We listen to customers when they have a problem and do our best to resolve complaints. We even serve as a mechanism for mediation when parties can’t come to terms. All for free.

At the BBB, we say, “Start with trust.” Everything you read about a business on our website, BBB.org, is verified. We give every business the opportunity to respond to every complaint filed, so you get an objective view of how that business conducts itself. Our customer reviews are also verified by the business, eliminating the ambiguity created when an angry consumer makes an unfounded claim or tries to launch a smear campaign – something that’s allowed on other sites.

The BBB is not for profit, so objectivity is at the core of what we do. After all, if we’re fighting for fairness, it has to start at home. Like a local painting contractor said to us, “If it’s unethical, don’t proceed.”

Laws might change over time but integrity is constant. The more I talk to consumers and businesses, the more I believe ethical standards transcend time, place and legal statutes. In short, the sustainability of a business can be measured by its adherence to sound ethical principles.

Steve McFarland is chief executive of the Better Business Bureau serving Los Angeles.