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Beware of Money-Hungry
Credit Counselors
Watch out for firms running new credit counseling commercials
on TV stations nationwide. The majority of the new firms
advertising on TV charge fees and get bonuses from credit card
issuers for every name they sign up, according to the South
Florida Sun-Sentinel, Fort Lauderdale, Fla.
Some are legally structured as nonprofits but funnel large
amounts of money to their own executives in the form of pay,
bonuses, and real-estate deals.
A good credit-counseling service will be partially supported
by grants and charitable donations, and not depend on debtor’s
fees for any more than 60% to 80% of its income. It will cap
fees to a debtor at $25 a month or less. It also will offer
free counseling and may have as many as 50% of its clients in
counseling alone--not enrolled in a debt repayment plan.
The Consumer Credit Counseling Service (CCCS) is a
nonprofit agency supported by community organizations and
overseen by local volunteer directors. It’s funded through
customer fees, charitable donations, and grants, but mostly
through creditor contributions. Most consumers who call a CCCS
office don’t pay any fees.
To find the nearest CCCS office, call 800-388-2227 or visit
www.nfcc.org.
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Copyright 2002 Credit Union National
Association Inc. Information subject to change without notice.
All other rights reserved. |
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