“A new report issued by CRCS carries strong warnings for consumers seeking credit counseling services”
CRCS
July 12, 2004

When consumers with serious debt problems seek out advice on who to turn to for help, the media, government agencies and policymakers frequently steer them to Consumer Credit Counseling Services (CCCS) or other agencies that are members of the National Foundation for Credit Counseling (NFCC). In doing so, they tell consumers that the decades-old NFCC and its CCCS affiliates are neutral, reputable, “nonprofit” charities that serve consumer’s interests.

But according to the report, consumers seeking help from an NFCC affiliate may be handing their financial futures over to the very creditors who buried them in debt in the first place—and profit handsomely from collecting on those debts. They are also relying on the reputation of an organization whose leadership and affiliates have been associated with some recent, troubling financial scandals.

The NFCC is an Agent of the Nation’s Biggest Creditors. Creditors created the NFCC and many of its affiliates. NFCC members receive two-thirds of their funding from creditors. The NFCC and many of its affiliates are lead by former creditor executives.

The NFCC’s “Nonprofit” work secures billions of dollars in profits for creditors and corporate level compensation for NFCC executives. Creditors profit tremendously from the debt collection activities of the NFCC, which through its nonprofit network of more than 1,300 locations collects close to $5 billion in at-risk debts for creditors every year. For their work on behalf of creditors, the NFCC’s “nonprofit” executives have received compensation packages approaching $400,000 per year. At on NFCC affiliate, the top four officers received compensation totaling about $1 million for their “charitable” work of collecting debts from consumers and turning them over to creditors.

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