Credit counseling agencies provide valuable suggestions, financial education, and assistance to individuals who are facing problems in paying off their debts. However, FTC and BBB have received several complaints in the recent years against a lot of fraudulent agencies that are engaging in questionable activities and are ripping off consumers. Therefore, consumers considering using the services of counseling organizations must be cautious and careful. Given below are several key things to watch out for:
Ask the following questions to the counselor regarding their services and fees:
What services do you offer?
What are the fees for the program? Do I have to pay anything as advance? Are there monthly fees? What are the basis for the fees?
Will I have a formal written contract or agreement with you? Will an oral agreement do?
Who oversees, regulates and licenses your agency? Is your agency audited?
What is the source of your funding?
Will I be working with one counselor or several?
Are the counselors accredited or certified? If not, how are they trained?
Apart from helping me solve my immediate financial problems, will you help me in developing a plan for avoiding money problems in the future?
Can you provide me some kind of financial educational materials? If so, will you send them to me? Do you charge extra for this?
How soon can you take my case?
Can you give me detailed information about your agency?
What assurance do I have that information about me (including my name, residential address and phone number) will be kept confidential?
Are you a non-profit credit counseling agency? If yes, then is there any certificate which proves your non-profit status?
How will I get the credit counseling service?
Do you offer any legal assistance?
Is your agency affiliated to NFCC or COA?
Do you pay commission to others who refer clients to you?
Are you licensed in my state?
Will you handle my collection calls?
How long will the credit counseling session take place?
What are the benefits of credit counseling?
Is this agency new? Has it been in the industry for several years?
Can I access my account online?
Will you help me if I still have problems with my creditor?
Before you zero in on any agency, get all the details about the repayment plan:
How do you evaluate the amount that for the repayment? What happens if this is more than I can afford?
What is the process for the debt repayment?
How will I know whether my creditors have received their payments on time or not?
What happens if I can't afford to make the payments on time?
How often will I get status reports on my accounts? Is there a possibility to get access to my accounts online or by phone?
Can you negotiate with my creditors to reduce or eliminate interest and finance charges or waive late fees? If yes, then what percentage will be reduced?
What debts will be excluded from the debt repayment plan?
Will you help me plan for payment of these debts?
Who will help me if I have problems with my accounts or creditors?
How secure is the information I provide to you?
What information do you report to credit bureaus?
Is a debt repayment plan my only option?
What types of debts can be included in credit counseling program?
What types of debts can't be included in this program?
Can I use my existing credit cards?
How will credit counseling affect my credit score?
How long will it appear on my credit report?
Will my employer know that I have enrolled into the program?
Will there be any written agreement?
How can I include an account in the program?