Credit Counseling Industry - Who Should You Trust?
The ads sure sound good Companies that will reduce your creditor payments and get your interest cut, too. But debtor beware for, as the old saying goes, if something sounds too good to be true, it probably is.
While the credit counseling industry is not new, there are an abundance of newcomers to the profession - some good, some not so good. For consumers who choose the wrong company, the results can be devastating. Kim Womack, Community Relations director for Consumer Credit Counseling Service of South Texas, has heard many horror stories from people who have been affected by unscrupulous credit counseling agencies. "You name it, it's happened. Everything from putting people on plans who don't need it whose credit is now damaged, to being mislead, lied to, and flat ripped off," said Womack. CCCS is a member agency of the National Foundation for Credit Counseling (NFCC), the country's largest and longest serving nonprofit national credit counseling network.
SEEK HELPFUL CREDIT COUNSELING
From financial education to debt management, NFCC member agencies have trained and certified credit counselors who offer financial planning and debt reduction services that are free or low-cost. But NFCC suggests consumers ask these questions before entrusting any organization with their financial future.
Quality Assurance/Credibility
- Are they nonprofit? How are they funded?
- Is the agency accredited by a reputable third-party organization? Are they affiliated with a national organization like NFCC to help assure they maintain quality standards and good customer service?
- Are their counselors certified or trained in basic money management services?
- How long has the company been in business? What's their record of client success?
- Have complaints been filed with the Better Business Bureau or State Attorney General?
Fund Management and Safety
- How are client funds collected and dispersed to creditors?
- What policies are in place to assure protection of client funds?
- Do they retain any client payments for their company?
- Are clients fully credited for all and full payments to creditors?
Service Delivery
- What fees does the agency charge? Do they fully disclose their fees up-front?
- Will they work with all my creditors, regardless of whether they are financially supporting the organization?
- Is counseling offered in person or by telephone? Does the consumer have a choice?
- Does the agency provide financial management or budget counseling in addition to debt management services? Does the consumer have a choice of service?
For more information on NFCC or CCCS of South Texas, call 800-333-4357 or visit www.nfcc.org.
About the National Foundation for Credit Counseling
Founded in 1951, the National Foundation for Credit Counseling (NFCC)TM, Inc., through its Member agencies, sets the national standard for quality credit counseling, debt reduction services and education for financial wellness. NFCC is the nation's largest and longest serving national nonprofit credit counseling network. With more than 1,300 community-based agency offices across the country, NFCC Members help over 1.5 million households annually. NFCC Members, often known as Consumer Credit Counseling Service (CCCS) or other names, can be identified by the NFCC Member seal. This seal signifies high standards for agency accreditation, counselor certification and policies that ensure free or low-cost confidential services. NFCC Member offices can be reached in communities nation-wide, toll-free at 1-800-388-2227, or on-line at: www.nfcc.org. NFCC is located in Silver Spring, Maryland.
