CCCS - Interesting article on ConsumerXChange

Posted by BeenThereStillDoingThat (24.187.170.238) on July 04, 2004 at 15:43:24:

Found this online. Might be good reading for newbies. Cant vouch for all the info but alot seems pretty accurate. I hope it formats, but if not go to the site itself.

http://www.cx.org/dropdowns/seller/CCCS.htm

Consumer Credit Counseling Services

CCCS- They look like they're on your side, but....
Bad Advice For anyone with overwhelming debts, the first thing to consider is: Can I benefit from the protections in federal law ?

These include stopping bill collection activities and allowing you to reduce or eliminate your payments. You may not want to use these wage-earner or bankruptcy choices, but you need to consider them because they could help you greatly.

CCCS probably won't tell you about these advantages.

The risk is that you'll pay CCCS money for years, then discover that you could have reduced or eliminated your payments by using the federal laws.

You should talk to a lawyer familiar with those laws. If you need a credit counselor, find one who can tell you what you need to know.
Kickbacks CCCS gets most of its money by keeping a percentage of the money it collects from people who owe money. Just like a collection agency.

You may be asked to pay a small fee, but that doesn't mean that CCCS works for you. It works for the companies who are trying to get you to pay them money. The more you pay, the more CCCS keeps.

Their financial incentive is to get you to pay your creditors (and CCCS) as much as possible, which is probably not in your best interest..
Secrets It's unlikely that CCCS will clearly and effectively tell you all this. (CCCS uses "Disclosure Statements," which you should have your lawyer explain to you.)
Deception It feels nice to have someone sympathize about your troubles, and your CCCS counselor may truly want to help. But the counselor wants much more to get you to contribute to the income of CCCS, even if you have better alternatives. What may sound like supportive consumer advice is likely to be manipulative debt collection. It's unfair for CCCS to disguise itself as a consumer organization.
Bias Because CCCS is on the side of your creditors, you may encounter a broad range of conduct that is not in your interest, such as taking advantage of your inevitably fragile emotional state, forcing you to pay all your creditors equally when that would make your life more difficult....
Suggestions Be very careful to avoid the predatory credit counselors and debt consolidators who, hard to believe, could be even worse than CCCS.

Big companies criticized for excessive fees include AmeriDebt, Cambridge Credit Counseling and Consolidated Credit Counseling.

Your community may have a quality program of advice about debts. (Call your Legal Services program.)

If not, you need to talk directly to your own lawyer.
Federal Mixed-messages The Federal Trade Commission, I.R.S. and some state regulators together warned consumers to be wary about the costs of tax-exempt credit counseling organizations.

"Consumers need to know not to read too much into not-for-profit status -- that's no guarantee that someone is legit," said an FTC official.

But, at the same time, Congress is changing the bankruptcy law to require people to use these credit counseling companies before they can get bankruptcy protection.
Details "Consumer Credit Counseling Services; the Need for Reform and Some Proposals for Change," Stephen Gardner, Advancing the Consumer Interest (Fall 2001).

[The CCCS network (The National Foundation for Credit Counseling, with 150 member agencies with 1,300 offices) did not respond to CX's invitation to comment on that article.]

"Not-for-Profit Credit Counselors Are Targets of...Inquiry." NY Times, 10/14/03.

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