Debt Consolidation Depot
Debt Consolidation & Financial Information Resource Center
April 15, 2004
Choosing a Credit Counseling Agency: what questions to ask and how to check that a credit counseling agency is legitimate.
Marmora, NJ (PRWEB) -- The credit counseling industry has recently been
in the spotlight: some major players have been accused of misleading
clients. Other agencies have been accused of masquerading as nonprofits
while funneling huge fees to for-profit affiliates and their investors. Many
states have begun litigation, Congress is holding hearings and
investigations, and the IRS and FTC are scrutinizing the industry.
So where does an individual or family in financial distress turn?
Are there any agencies that will treat these individuals and families with
dignity, privacy and fairness?
“Yes”, says Russell Graves, Executive Director of Consumer Credit and Budget
Counseling, “There are agencies out there that will provide you with the
help you need and treat you fairly at the same time. In fact, most agencies
fall into this bracket, but do not have the advertising budget of the few
large players that are giving the industry a black eye.”
He suggests that anyone considering working with a credit counseling agency
thoroughly check out the agency and its practices and become an informed
consumer:
-Ask if the agency is licensed in your state. More than 20 states now
require licensing or some type of registration, (in fact, it is illegal to
do debt counseling in 2 states).
-Check the Better Business Bureau for consumer complaints. You can check out
an agency’s Better Business Bureau record at the bureau’s website:
www.bbb.org.
-Call your state’s consumer protection agency. In Florida for instance,
complaints about credit counseling are now the third-largest category of
consumer grievances.
-Ask if the agency is accredited by COA or has an ISO certification. These
are national and international accreditation and certifications; they verify
best practices and ensure that proper procedures are followed. (A word of
caution: Do not rely on a trade association affiliation; trade groups are
notoriously lax in enforcement of so called “standards”. The agency that was
recently closed in Utah for mismanaging customer’s funds was a member of the
oldest trade group just weeks before the state seized its assets.)
-Ask about the agencies fees (ALL the fees). Find out how much the program
is going to cost you: Does the first payment go to the creditors or is it
retained as a deposit or fee? Are there any enrollment fees, or fees for a
required educational program? How much is the monthly fee? Are there any
other fees charged, including electronic payment fees? Are there any other
required “donations”?
-Ask what the affect a credit counseling program will have on a client’s
credit. Do not believe any agencies that promise that your credit will not
be affected. A credit counseling program is a hardship program and its
existence is typically noted on a credit report. While enrollment in a
program does not directly affect a credit score, it will limit the
availability to new credit including the purchase of a car or a home.
Consumer Credit and Budget Counseling is an accredited, non-profit,
multi-state licensed consumer education and financial counseling agency that
serves individuals and families in financial distress. CC&BC provides free
budget and credit education and if appropriate, assists clients by
structuring consumer debts, primarily credit cards, into a single affordable
monthly payment scheduled over a term of 3-5 years. For more information
please visit www.cc-bc.com.
© 2004 DebtConslidationDepot.com