Credit counseling agency draws the line with predators

By the time someone calls or goes online to seek financial counseling, their back is most likely already against the wall. Lurking on the other end, too often, are companies more likely to take advantage of the situation than assist in making it better.

Sometimes, the names of those companies are so similar to legitimate ones, it’s hard to distinguish at first blush. That is a primary reason one of the area’s mainstays, Consumer Credit Counseling Service of Greater Atlanta, changed its name this week after 46 years to CredAbility.

“There are names that are confusingly similar,” said Bill Cloud of the Georgia Office of Consumer Affairs. And not all of those are putting consumers’ needs first.

Since the start of the recession in 2007, the Better Business Bureau has received more than 3,500 complaints about debt settlement companies. Attorneys General from 10 states, not including Georgia, have taken action against numerous companies in the last 36 months.

“Our complaints have to do with over-promising, overcharging and taking advantage of people in bad situations,” Cloud said. “Whenever we run across somebody [who has been in that situation], we try to get them in the right place.”

CredAbility president Suzanne Boas said the nonprofit agency that gets 17,000 referrals a month has an “opportunity and responsibility” to protect the brand by aggressively separating itself from unscrupulous players in the counseling arena. They have more leverage to do that now than they did under the CCCS brand. CredAbility, which aims to grow its national influence, remains one of the three largest members of the National Foundation for Credit Counseling.

“You can’t imagine in what distress they are when they call us,” Boas said. “They are not in a position to research and vet. They are so desperate. The [confusion] has been a problem for us and really a problem for consumers. The predatory services out there have mushroomed; making promises they can’t carry through on.”

Other branches of CCCS have changed names with similar goals, such as CCCS of Houston to Money Management International and CCCS of Michigan to Greenpath Debt Solutions.

Fred Elsberry of the BBB said consumers should be aware of red flags, like high upfront fees. “If you think about it, if you can afford to pay that upfront fee, you could probably make a dent in your debt. Beware of claims that it is a fast, easy, painless process.”

Question: Have you ever been a victim of a scam? Have you sought credit counseling? Did it help?

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7 comments Add your comment

Trizzle

May 27th, 2010
9:04 am

It’s a shame how people will take advantage of those that are already in a bad situation. How do they sleep?

PaulieOldSchool

May 27th, 2010
10:12 am

I have been a client of Consumer Credit Counseling Service of Atlanta, soon to be CredAbility, for approximately 4 years. I got there because of huge medical bills, left over from cancer treatment. While time to time an individual counselor has done something to upset me, overall the experience has been great. I have been steadily paying down my bills and now the end is in sight. This isn’t an endorsement of one particular agency, rather just witnessing to how credit counselors can do so much to give you a sense of worth and take the harpies off your back. The biggest step is the first one, and no one can take it but you.

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Matt Hearn

May 27th, 2010
12:07 pm

People are so eager to believe everything they hear. Where exactly are those statistics regarding Debt Settlement Complaints within the BBB? According to the US BBB’s 2008 statistics by industry, the following facts are presented:

Collection Agencies: 862,128 complaints – 199,011 unsettled
Credit Counseling: 1,599 complaints – 203 unsettled
Debt Negotiation: 353 complaints – 30 unsettled

Total Inquiries: Debt Negotiation: 153,000 – Credit Counseling: 570,972

The real problem is that the consumers need options. I don’t want to spend my whole day explaining each industry and laying waste to the lies being perpetrated all over the internet by “followers of media falsities”, so I will leave it at that. Think for yourselves people, or be good sheep and follow the herd.

Thomas Wayne

May 27th, 2010
6:33 pm

Always good to check a biz with the BBB – There are some truly honest agencies out there and they’re listed with the BBB on bbb.org. I found Freedom Debt Management in Boca Raton – a small nonprofit that has an A+. They did my budget for me and reviewed my credit report to consolidate the debts they could show benefit on. Im very happy with my choice but I wud have been screwed if I didnt check with the Better Business Bureau.

FinancialDoctor

May 30th, 2010
8:41 am

If your debts are too back then file chpt 13 or 7 and get it over with. CCCS can help but the agreement can be severed if you miss a payment. If its really bad your credit is shot anyway and you will have the legal bias to deal with creditors. Don’t go to a debt settlement company; you can negotiate that mess yourself. Get it in writing the settlement; don’t let them have access to your account or if you do only keep the min payment in that bank account. Have the bank account at a bank that is not your primary financial institution also.

Matt Hearn

May 31st, 2010
3:11 pm

The bottom line for consumers: Eliminate all debts outside of necessity debts and learn to live within your means. The credit card companies have made it too easy for the consumers to get in over their heads. If these companies were truly concerned about liquidity, they would offer relief to the consumers by lowering the interest rates and facilitating reasonable payoff to continue servicing card holders. Instead they fleece the American population, steer the media, and ensure that the avaerage consumer is trapped in a never ending repayment plan. The bottom line of economics is that the consumers need to consume in their local economies. If they cannot, the local businesses lose revenues, put more people out of work resulting in even less being spent in that economy, resulting in even more layoffs and downsizing, resulting in….Get the picture? The truth is, the credit card companies haven’t done near enough to correct the problem and in fact make it worse. I believe that the American consumer should have as many options as possible for getting back on track financially. Debt settlement is one of those options that emerged to fill a vital debt relief gap. Watch the following PBS Frontline Special: http://www.pbs.org/wgbh/pages/frontline/shows/credit/