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?