SENATE REPORT FINDS ABUSES IN CREDIT COUNSELING INDUSTRY
March 28, 2004
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Credit counseling agencies are coming under increased scrutiny for fraud and abuse of consumers, according to a report by the Senate Governmental Affairs Committee.
Consumer complaints against such agencies are on the rise. Investigators found a pattern among such entities, including high-pressure sales tactics, demands for money up front, failure to make payments to creditors, and no budget education or actual counseling being performed.
Credit counselors historically have been financed by banks that issue credit cards, but these contributions are declining, forcing agencies to charge fees.
“Clearly, something is wrong with the credit counseling industry,” said Sen. Norm Coleman, R-Minn.
SOURCE: AP
