What Consumers Should Know Before Choosing a Credit Counseling Agency
The National Foundation for Credit Counseling (NFCC) advises consumers to exercise caution when seeking debt relief. To that end, NFCC has prepared the following list of questions that consumers should ask credit counseling or debt management organizations before entrusting them with their financial future.
Quality Assurance/Credibility
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Are they nonprofit? Are they consumer-focused or are they driven by their financial bottom line at the expense of consumers?
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How are they funded?
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Is the agency accredited by a reputable third-party organization? Does the organization certify the agencies' services are quality and in the consumers' best interest?
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Are their counselors certified or trained in basic money management services? Or are they telemarketers who's goal is to sign consumers up for a debt payment plan?
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Are they affiliated with a national organization like NFCC to help assure they maintain quality standards and good customer service?
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How long has the company been in business? What's their track-record of client success?
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Have complaints been filed about the agency with the Better Business Bureau or State Attorney General's office.
Fund Management and Safety
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How are client funds collected and dispersed to creditors?
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What policies are in place to assure protection of client funds?
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Do they retain any client payments for their company?
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Are clients fully credited for all and full payments to creditors?
Service Delivery
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What fees does the agency charge?
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Do they fully disclose their fees and services up-front?
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Will they work with all my creditors, regardless of whether they are financially supporting the organization?
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Is counseling offered in person or by telephone? Does the consumer have a choice?
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Does the agency provide financial management or budget counseling in addition to debt management services? Does the consumer have a choice of service?
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If Debt Management Plans (DMP) are offered, how long will it take to pay off the plan?
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After enrolling in a DMP, are customer service representatives available to help clients?
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How will working with the organization impact customers' credit?
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