Guest Commentary: Asheville Citizen-Times

For Release on November 11, 2003

For more information contact:

Celeste Collins, Executive Director,

Consumer Credit Counseling Service of Western NC

828.255.5166 or celestec@debtstress.org 

Credit Counseling:  Know the Difference

Donât Trust Your Credit to Just Anyone

Asheville ö Youâve seen the headlines: National debt counseling agencies investigated for misuse of non-profit status, questionable fees, irresponsible customer service, deceptive advertising, credit counseling malpractice·

At Consumer Credit Counseling Service of WNC (CCCS of WNC) we applaud these recent actions and believe it will help purge the industry of unscrupulous agencies and challenge other agencies to adopt stronger consumer protections and improve their counseling services.

However, with these issues making the news and the recent Federal Trade Commission and Internal Revenue Service alert cautioning consumers about some credit counseling services, consumers may be more confused than ever about whom to turn to for quality financial management advice and debt relief.  

Being under financial stress makes people vulnerable.  We continue to see western North Carolina citizens who have been enticed by slick TV ads or telemarketing calls offering deals on unsecured debt payment plans.  These deals promise unbelievable reductions in interest rates and payments on unsecured debts, if you just call the toll-free number and begin paying your debt through the agency being promoted. 

After signing up with these companies and discovering that the ãdealsä are too good to be true, unsuspecting consumers become dissatisfied or suffer further damage to their credit. Often concerned friends or family members refer these people to us to try to straighten out the problem. Sometime the damage to the credit is irreversible. Sometimes, because of new federal laws regulation or internal policies, creditors are not able to transfer the debt management program to a new agency. This leaves the consumer the choice of continuing with the unsatisfactory debt counseling company or forfeiting interest rate or payment concessions and resuming direct payments to their creditors. A credit counseling decision made in haste, without sufficient investigation can have long-term repercussions!

CCCS of WNC, is a United Way member agency which has been serving western NC 28 years, and as legitimate nonprofit, we donât have the multi-million dollar advertising budgets of some of the mega-agencies. We count on satisfied clients, employers, other nonprofits, and people within western NC to help direct people to our agency.  We are here to provide confidential, free budgeting and money management consultations, financial education, and debt relief. The assessments we prepare for consumers are thorough reviews of debts and living expenses so that the solutions we propose are realistic and comprehensive. And while we request voluntary contributions from our debt management clients, they truly are ãvoluntary.ä Our proven track record of client success and quality services represents the best practices of the credit counseling industry. 

As a step in ensuring quality service, in 1996 CCCS of WNC underwent a rigorous accreditation process by the Council on Accreditation for Services for Families and Children; we were reaccredited in 2002. Also, CCCS of WNC is a member of the National Foundation for Credit Counseling, Inc., ¨ (NFCC) the nationâs original nonprofit credit counseling organization which provides certification for counseling staff and resources to enhance our educational offerings.  For more information call 255.5166 or 1.800.737.5485 or visit www.debtstress.org.

If you are seeking credit counseling services, the following tips should help you avoid some common mistakes:

á       Consider a local, community-based, nonprofit agency, such as CCCS of WNC, with a history of good customer service. Check the yellow page ad or website for a local address. Contact the Better Business Bureau to find out if there have been consumer complaints about the agencyâs services.

á       Realize that in North Carolina charging a mandatory fee for debt management programs is prohibited. Agencies may ask for a reasonable voluntary contribution for account set-up and/or monthly maintain/handling, but this must be clearly disclosed in advance of services. (Be wary of out-of-state companies with high set-up or monthly fees and ãfee depositsä which allow the agency to keep a clientâs first monthly deposit as a fee.)

á       Review agency disclosures to see how and with what frequency your funds will be collected and disbursed to creditors. Make sure that 100% of your payments to each creditor will be applied to your accounts.

á       Look for comprehensive budget counseling and financial management education, not just a payment quote for debt management services.  You want an agency that provides long-term solutions and support for resolving your financial issues.

á       Ask about the agencyâs counselors training and certification in basic money management services. (Be wary of telemarketers who are focused on enrolling consumers in debt management plans.)

á       Find out the hours and options for customer service. Some agencies offer phone or on-line account verification/inquiries. Verify that security measures are in place if you opt for these services.

á       Look for an agency that has been reviewed and accredited by a reputable third-party organization to confirm that the agency is operating in the best interest of its customers.

á         Also agency affiliation with a national organization, such as the NFCC, helps assure the agency maintains quality standards and good customer service.

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