Is your credit counselor legitimate?

by Katy Sheehan on July 28, 2009

in In The News, Resources

There are a lot of scams out there for people looking to try to find help with consolidating debt, avoiding foreclosure and/or bankruptcy, etc. And that is why it is very important to check all the information related to the companies and institutions where you want to apply. If you are interested in learning about the whole system, buy term papers online where you can read analysis and examples. When a close friend of mine started looking for a debt consolidation program I got nervous and called a financial adviser friend, Washington’s Secretary of State, and the Washington Dept. of Licensing, because like most people these days I am wary of trusting anyone. Here is what I discovered:

The National Foundation for Credit Counseling is a non-profit organization that directs people to credit counseling organizations which certify that they are licensed to do business in States that require such a license.  (That is a confusing sentence from their website.  What I found out was that Washington does not have a licensing requirement for consumer credit counselors).  Still, the NFCC is a good place to find a legitimate counselor in your area.

The U.S. Department of Justice also has a program called the U.S. Trustee Program which provides Credit Counseling and Debtor Education Information.  They have a list of approved counselors by state as well as other very useful information.

There is also the Federal Trade Commission’s “money matters” site which I did not find particularly useful but the home site has good information in general about scams and what consumer rights are at the federal level.

Finally, the Attorney General of Washington has information about consumer credit counseling in Washington and scams.  You can call them at 1-800-551-4636.

Just to give readers an idea of how sneaky scammers are (not that you need much convincing since one name says it all: Madoff) I went to a Foreclosure class a couple weeks ago and learned a great deal about current scams.  When I approached the speaker to ask if I could post his information on this blog he hesitated looking uncomfortable.  I immediately picked up on it and told him it was not a big deal, I just thought it was really useful information that should be shared with as many people as possible.  He agreed but hesitated because of an experience where his information was used for the wrong reasons.

Evidently, a person who was running a foreclosure scam had come to this foreclosure class himself.  Afterward he used the materials from the class on his own blog to legitimize his own program.  In other words, he told people to watch out for scammers relying on people’s assumption that no scammer would describe his own program on his own site.  (Eventually, I did get permission to post his information which I will hopefully share as soon as possible).

If you are asking yourself why I am a legitimate source of information about consumer credit counseling then you are asking a great question!  I am not a consumer credit expert by any means, just a paranoid friend trying to make sure my loved ones don’t get shafted. So, don’t take my word for it, look it up!

You can and should protect yourself.  Before signing up with a program check with the agencies or organizations listed above to make sure that you are using a legitimate credit counselor.

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