10 Questions About Credit Counseling Agencies
Thousands of companies have sprung up over the last few years offering CCCS look-alike services. Complaints against these companies have grown proportionately as desperate families find themselves stripped of their few remaining dollars by unscrupulous operators. Before you trust your finances to any company, we recommend you get answers to these questions:
Quality Assurance and Credibility
- Is the company nonprofit, and how are they funded?
About CCCS: We are a community organization recognized by both federal and state governments as a non-profit agency established to help people avoid bankruptcy. Because creditors have an interest in collecting outstanding accounts, they have agreed to give special consideration to CCCS clients who enroll in the Debt Management Plan. In many cases, interest rates, late fees and over-limit charges are lowered or suspended. The creditor allows this because we individually manage each account. Therefore, while thousands of clients make just one monthly payment to CCCS, we in turn, combine all those payments into one lump sum for the creditor, saving them time and money. A small portion of that lump sum stays with us to cover the cost of paperwork and overhead. - Is the agency accredited by a reputable third-party organization and affiliated
with a national organization like the National Foundation for Credit Counseling (NFCC),
which helps assure they maintain quality standards and good customer service?
About CCCS: We are a member of the National Foundation for Credit Counseling (NFCC) which guarantees agency accreditation, counselor certification, financial integrity, and other core policies that ensure quality service to all our clients. We are also accredited by the Council on Accreditation of Services for Families and Children (COA), and the Department of Housing and Urban Development (HUD) as an approved housing counseling agency. - Are their counselors certified or trained in basic money management services?
About CCCS: Our counselors are fully trained in all facets of money management, and are certified by the National Foundation for Credit Counseling (NFCC) after a rigorous 12-month program. Certain counselors also receive special training, such as our Credit Report Review counselors, who are certified by the Association of Credit Bureaus.
Fund Management and Safety
- How are client funds collected and disbursed to creditors?
About CCCS: Debt Management Plan participants make monthly payments to CCCS. These funds are deposited in a trust account and disbursed weekly to creditors, both electronically and with paper checks, depending upon the creditors' preference. - What policies are in place to assure protection of client funds?
About CCCS: The trust account that holds and transfers client funds is audited annually by a certified public accounting firm. Clients are sent monthly statements showing funds deposited into the trust account as well as amounts disbursed to creditors. These statements can be compared to statements received directly from the creditor. - Do they retain any client payments for their company?
About CCCS: All client payments are disbursed directly to creditors. CCCS may receive funds from some creditors, but those amounts are never deducted from client payments. - Are clients fully credited for all payments to creditors?
About CCCS: Clients are fully credited for all payments made to creditors.
Service Delivery
- What fees does the agency charge and are their fees disclosed up front?
About CCCS: CCCS' credit counseling is free. If you decide to participate in our Debt Management Plan (DMP), there is a one-time $50 Debt Management/Education Fee. DMP clients pay 8% of the amount of their payment--not to exceed $35 as a monthly fee--regardless of the number of creditors handled.
- Will they work with all your creditors, regardless of whether they are financially
supporting the organization?
About CCCS: CCCS works with all creditors regardless of whether they pay fees to CCCS or offer reduced interest. - Is counseling offered in person as well as on the phone or over the Internet, and
are you offered a choice?
About CCCS: We offer appointments in person, over the phone, or through the Internet. Clients may choose the time and form of communication.
