Consumers who are in a financial bind may end up turning to a credit counselor for guidance. This can be an effective way to help beleaguered Americans get their finances in order, perhaps avoiding bankruptcy in the process.
Credit Counselor Guidelines
The Federal Trade Commission (FTC) in cooperation with the Department of Justice’s U.S. Trustee Program has issued guidelines to help people find a credit counselor. Those guidelines include asking professionals certain questions in advance of retaining their services including the following (with my tips included after each question):
What services do you offer? A credit counselor may be able to guide you, but you to need to ask if they provide all of the services you want. If not, you may need the help of a second professional – that gets expensive!
Will you help me develop a plan for avoiding problems in the future? Overcoming a current problem is important, but you need to know what steps you can take now to keep yourself from repeating the problem.
What are your fees? Will you be charged per hour, per visit or will one set fee be assessed?
What if I can’t afford to pay your fees? Find out if you can be charged on a sliding scale, based according to your ability to pay.
What qualifications do your counselors have? Are they accredited or certified by an outside organization? What training do they receive? These questions are important – you need to learn if your state certifies people who set up shop as credit counselors. Learn what their background is; you may not be able to get references, but you should be able to uncover their reputation.
What do you do to keep information about me (including my address, phone number, and financial information) confidential and secure? No information about yourself should be shared with third parties without your permission. Your credit counselor may contact your creditors on your behalf (with your knowledge), but they shouldn’t be sharing information about you without your authorization.
How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization? Some credit counselors work for non-profit organizations while others work for for profit enterprises. Learn if there are some sort of incentives in place for counselors to steer you to other products.
Full Disclosure: A Must!
Credit counselors help thousands of Americans every week get back on financial track. Only use counselors whose track records are proven and who offer full disclosure on their services.
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