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Consumer Groups Blasts Credit Counseling Agencies for Illegal Mishaps, Conflicts of Interest, in Report

WASHINGTON - Consumers for Responsible Credit is warning consumers that they some credit counseling agencies should be subject to more scrutiny. In an 80-page report released on July 13, CRC, a national advocacy group, said those seeking help from a National Foundation of Credit Counseling affiliate such as Consumer Credit...

By Staff Writer | Updated on July 20, 2004

WASHINGTON – Consumers for Responsible Credit is warning consumers that they some credit counseling agencies should be subject to more scrutiny. In an 80-page report released on July 13, CRC, a national advocacy group, said those seeking help from a National Foundation of Credit Counseling affiliate such as Consumer Credit Counseling Service agencies (CCCS) may be “relying on the reputation of an organization whose leadership and affiliates have been associated with some recent, troubling financial scandals.” The report is titled “Nonprofits In Service to One of America’s Most Profitable Industries: A Report On How Creditor Control of the Credit Counseling Industry Hurts Consumers and The Need For Fundamental Reform.” Among other things, it also makes recommendations for “reducing creditor control of the industry.” “The best way to make the credit counseling industry more favorable to consumers is to reduce the direct influence and control of creditors,” including a ban of creditor management and funding of agencies to simply limiting or even disclosing the creditors’ influence. The report also includes recommendations to the industry for improvement of customer service such as the establishing of national standards and opening the industry to professional financial services businesses that already serve consumers and are already subject to regulatory scrutiny. More details on the report can be found at www.responsiblecredit.com.

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