CREDIT COUNSELING AGENCIES-CAVEAT EMPTOR
All credit counseling agencies are not alike and the
consumer needs to beware.
Consumer complaints about the credit counseling
industry have risen sharply according to the Better
Business Bureau, which reported receiving 1,480 such
complaints in 2002. According to a study released this
year by the National Consumer Law Center and the
Consumer Federation of America, there has been an
increase in abusive practices and outright scams. Who
are the agencies causing such an uproar?
The debt management industry has changed.
Unscrupulous predatory credit counseling agencies
have emerged in recent years. Most of these agencies
are not members of a trade association that sets
quality and ethical standards, are not third party
accredited, nor are their counselors certified. They do
not disclose fees and abuse consumers and creditors
alike by picking and choosing creditors to be included in
a plan.
Most states have laws in place that are designed to
protect consumers from excessive fees and deceptive
practices. Fee disclosure to the consumer prior to any
plan being established is generally required by these
laws. Only non-profit agencies are normally permitted
to provide debt management services. Those agencies
exceeding maximum fee amounts, or operate for-profit,
or are not licensed to do business in states where
licensing is required, should be reported to the
enforcement body of that state, normally the Attorney
General's Office or the Department of Banking and
Finance. The agency need not be domiciled in the
consumer's home state for these laws to be applicable!
Many of these agencies are Internet and
telephone "counseling services" located in other states,
but they are subject to the laws of the state in which
the consumer resides if they solicit or actively pursue
consumers in that state. The Illinois Attorney General's
Office filed suit earlier this year against one such
agency.
Consumer Credit Counseling Service (CCCS), is one of
the most familiar agencies nationwide, as well as being
the oldest and one of the most respected. All CCCS's,
as well as some other agencies with differing names,
are members of the National Foundation for Credit
Counseling (NFCC). The NFCC is a trade organization
which sets industry standards and requires third party
accreditation. The Council on Accreditation (COA)
provides NFCC agencies with their accreditation. COA
accredits such non-profit organizations as Catholic
Charities USA, Lutheran Services in America, the
National Council for Adoption, the Alliance for Children
and Families, and others. The NFCC requires
certification by its member agencies' counselors, and
provides the information and access for such
certification. Most agencies were organized and
founded in the 1960's and '70's by the credit-granting
community to address rising bankruptcies and the lack
of community credit education programs. Agencies
provide confidential individual counseling in person, by
phone or through the Internet, as well as debt
management and education programs. Many offices
also offer pre-purchase housing counseling, individually
and in groups, and comprehensive housing counseling
programs.
Many agencies advertising in the media deliberately use
names similar to Consumer Credit Counseling Service
(CCCS), causing confusion for the unwary consumer.
Beware of debt counseling imposters who use slick TV
and radio ads to attract consumers. Many have no
trade association affiliation and are not accredited.
Accreditation is an additional assurance that you are
doing business with an agency that observes the
highest national standards and delivers the best quality
service to the community it serves. If you would not
send your child to an unaccredited school, or get
treated at an unaccredited medical facility, then
beware of unaccredited counseling agencies. An
estimated 9 million Americans have some contact with
an agency each year. Shop carefully and know with
whom you are doing business. It's always wise to check
your local Better Business Bureau. It's your money! Be
knowledgeable about who is handling it!
To obtain quality counseling, a local NFCC-affiliated
agency can be contacted by calling (800) 388-2227,
the NFCC national referral line.
Find out more....
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Dear Danny,
Blinding Debt may seem an odd topic for a newsletter
devoted to human resource management and workforce
readiness issues, but as you read through this month's
offerings, it will become quite apparent why this topic
was chosen.
We begin with an article contributed by Julie McAdory,
the State Education Director for Consumer Credit
Counseling Service, New Orleans. Many employers
have staff or associates that are heavily encumbered
by personal debt. This national tragedy has become
quite a gold-mine for unscrupulous marketeers.
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| The Scope of America's Debt Problem | | |  BANKRUPTCY FACT:
Based on figures from the Federal Reserve, the typical
family filing for bankruptcy in 1997 owed more than one
and a half times its annual income in short-term, high
interest debt. A FAMILY EARNING $24,000 HAD AN
AVERAGE OF $36,000 IN CREDIT CARD AND SIMILAR
DEBT.An affiliate of CapitalOne reports the following: One
indicator of debt in the U.S. is the number of personal
bankruptcies declared each year. While many more
bankruptcies are declared than need to be, statistics
show how many people feel their debt burden is more
than they can handle: Personal bankruptcies are at an
all time high! In 1997 there were more than 1.3 million
declared. That figure is up 63% from just 10 years ago.
National consumer debt
In many ways, America is a nation weighed down by its
citizens' (and government's) debt. National consumer
debt reflects many different factors, so we'll
concentrate on consumer credit debt, which accounts
for 40% of the national figure.
National consumer debt has reached an all-time high of
over 1 trillion dollars. Credit card debt accounts for
approximately 400 billion dollars of that figure. Nitty Gritty Stats... | | |
| How Debt Affects Workers | | |  "In a survey of more than 300 human resource
directors, a Chicago based employment consultant firm
found that 32 percent of the managers consider
personal financial problems the most pressing
overlooked workplace issue. Some companies try to
help with programs and seminars on money
management, budgeting, debt management, and
retirement planning"
- St. Petersburg TimesApparently, this problem is Global in nature. A column
on "Debt, Stress and the Workplace" published in a
British Health and Safety publication starts out with the
following. "Every day we are bombarded with
enticements to borrow more money. The postman
delivers unsolicited mail from an endless stream of
credit card companies, high street stores promise
instant credit deals and adverts offer seemingly endless
loans." Full Story | | |
| How Debt Affects Families | | |  While Human Resource Managers often track
absenteeism and see that someone is having an above
average number of absences for "family problems," the
true reason may be excessive debt that places stress
on the family. Having an available Employee Assistance
Program (EAP) with competent counselors may often
lead to correct diagnosis and steps to a cure.For many families, one of the biggest sources of
disagreement and aggravation is the subject of family
finances. For many of us, the money coming in never
seems to match the money going out. Then of course,
there always follows the stress of what to spend the
money on, and when, and how much, and where, and
on and on.
Getting control of your finances means a lot more than
just getting control of your money. It means getting a
handle on your habits--both thinking and spending--as
well as your short term and long term goals. Not only
can getting control decrease much of your stress
(making for a more satisfying family life) it can also help
you efficiently prepare for the future (making for a
more leisurely life as the family matures). Although
many families make use of a financial advisor, a large
degree of your financial control can be handled on your
own. More on budgeting... | | |
| Training Solutions | | |  "An empowered organization is one in which individuals
have the knowledge, skill, desire and opportunity to
personally succeed in a way that leads to collective
organizational success."
-Stephen Covey -----
It has long been an irony: most employers
understand that training is vitally important for their
employees. A well trained workforce is more
productive, better motivated and inherently more
loyal. And above that, morale is normally high in such a
group. Training accomplished more than the
immediately observable increase in skill. It invests into
the individual's self efficacy at the same time. Yet,
when "times are tough," training is often the first line
item to be axed from the budget.Even though providing training in non-job-related skills,
such as personal money management, may not seem to
be a worthwhile investment, it could be one of the best
types of training, especially for a predominately blue-
collar workforce (although many professionals aren't
good at personal finances, either). The CCCS (see
feature article) can often provide such seminars upon
request, and at a relatively inexpensive cost. One Idea (Not an endorsement!)... | | |
| The CPI Group Expands | | |  Hot on the heels of the announcemen that The CPI
Group was recognized with their SECOND "Small
Business of the Year" award, Mark Smith announced
the opening of the firm's third office. The company's
president and CEO revealed that the company's newest
office, in Hattiesburg, MS, will have its Grand Opening
on September 29th.According to the group's web site, the strategy for
opening in South Mississippi is clear. This will allow it
better access to areas in the Gulf Coast region of the
Southeast as well as New Orleans, Louisiana, Mobile,
Alabama and Jackson, Mississippi. Location and
contact information follows:
The CPI Group - Hattiesburg
6504 Highway 98 West,
PO Box 15803
Hattiesburg, MS 39404-5803
601/271.8811
fax: 601/271.8877
cell: 601/466.5404
Market Manager: Truman Abbe
email: tabbe@cpi-group.com Contact us today! | | |
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