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Beware of phony credit counseling companies - April 10, 2003
Clark gets so many calls from listeners who are facing huge levels of debt. So, it’s no surprise that the number of families seeking credit counseling help each year is outrageous. The crummy thing is that there are a number of crooks in the business that pretend to want to help you. They say that if creditor are hounding you, they have people standing by to negotiate with your creditors and to get you out of debt. They claim to be non-profit services, so people buy in. But as the Consumer Federation of America found out, these outfits are not interested in anything but your money. They sign you up for Debt Management Plans or DMPs, which allow them to take hundreds to thousands of dollars from you and never help you resolve your credit problems. They make their money by taking a cut from what you pay the credit card companies. And, on top of that, they charge you to do it. Many customers end up in the hands of a collector as a result. A real credit counseling agency will do no negotiating with creditors because they are simply there to help you budget. Legitimate agencies also won’t charge you money up front. Or, if they do, it’s no more than $20 or $30. And remember that it’s very easy for anyone to file as a non-profit with the IRS. It’s traditionally been done on an honor system. But the IRS is now looking into this system and has revoked the non-profit status of many of these companies. The Better Business Bureau gets tons of complaints against these companies. So, if you want to find a legit branch, go to the National Federation of Credit Counseling or the NFCC. The Web site is nfcc.org. They will get you in a plan of action to help you change how you to spend and save your money. And they won’t ask for anything in return.
Beware of phony credit counseling companies - April 10, 2003
Clark gets so many calls from listeners who are facing huge levels of debt. So, it’s no surprise that the number of families seeking credit counseling help each year is outrageous. The crummy thing is that there are a number of crooks in the business that pretend to want to help you. They say that if creditor are hounding you, they have people standing by to negotiate with your creditors and to get you out of debt. They claim to be non-profit services, so people buy in. But as the Consumer Federation of America found out, these outfits are not interested in anything but your money. They sign you up for Debt Management Plans or DMPs, which allow them to take hundreds to thousands of dollars from you and never help you resolve your credit problems. They make their money by taking a cut from what you pay the credit card companies. And, on top of that, they charge you to do it. Many customers end up in the hands of a collector as a result. A real credit counseling agency will do no negotiating with creditors because they are simply there to help you budget. Legitimate agencies also won’t charge you money up front. Or, if they do, it’s no more than $20 or $30. And remember that it’s very easy for anyone to file as a non-profit with the IRS. It’s traditionally been done on an honor system. But the IRS is now looking into this system and has revoked the non-profit status of many of these companies. The Better Business Bureau gets tons of complaints against these companies. So, if you want to find a legit branch, go to the National Federation of Credit Counseling or the NFCC. The Web site is nfcc.org. They will get you in a plan of action to help you change how you to spend and save your money. And they won’t ask for anything in return.
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