|
Massachusetts study shows fraud
among
credit counseling firms
More than 75
percent of the credit counseling services
operating in Massachusetts are doing so illegally, according to a report
from a Senate committee scheduled to be released today.
Credit
counseling agencies in the
state are supposed to be nonprofit organizations, but more than 75 percent
operate for profit, according to a statement from the office of Sen.
Cheryl Jacques (D-Needham), chairwoman of the Senate Post Audit Committee.
Jacques is
expected to call on the Legislature today to update the laws governing the
credit counseling industry in the state.
"Current
regulations are inadequate to control a more aggressive generation of
(credit counseling) agencies," the statement said.
Jacques'
staff would not release a copy of the report yesterday, and would not
provide further details on the findings.
The report
comes at the end of a six-month study of the industry, which works with
people to turn around bad credit histories.
"Credit
counseling agencies should be regulated," said Mel Stiller, executive
director of Consumer Credit Counseling Service of Southern New England.
The nonprofit group works with people with poor credit in
Massachusetts, Rhode Island and Connecticut.
Stiller said
he would like to see the state require credit counseling services to be
licensed to do business here.
Consumer
advocates said the people seeking credit counseling are often vulnerable
and need all the protection the law can provide.
"Given
the economic downturn, more consumers will be in need of counseling,"
said Deirdre Cummings, consumer advocate at the Massachusetts Public
Interest Research Group. "These are the people who are trying to do
the right thing and straighten out their credit."
Cummings had
not seen the report, but said she "could only guess this is an
industry ripe for abuse."
Many people
are attracted to credit counselors by the abundance of advertisements,
many of which promise consumers both a turnaround in credit problems and
extra cash on hand, Cummings said.
"Yet
they are probably getting deeper into debt because the
product they are buying is not adequate," she said.
|
Now,
keep up to date with daily feeds of newly posted stories about America's
Seniors...click on the box to the left