When you need help with credit card debt, its vital to select the right credit counsellor. Sadly, some organizations who call themselves “non-profit credit counselling agencies,” may be more focused on growing their own bottom line than helping their clients. Not-for-Profit Credit/Charitable Credit Counselling is a much better choice for trusted advice, and not to be confused with the growing list of organisations masking themselves as Not-for-Profits in counterfeit.
Accredited counsellors can champion your financial goals.
How to Find a Trustworthy Credit Counselling Agency
The last thing you need when struggling financially is to fall victim to an unscrupulous credit counselling agency. If you’re considering using a credit counsellor, shop around, and ask each agency the following questions. More importantly, make sure you are comfortable with their answers before you book that first appointment! A legitimate agency is always more interested in your bottom line than theirs. What are the warning signs that a credit counselling agency might not have your best interests in mind? Follow these guidelines to help you make the right choice.
Ask These Important Questions:
Is the agency affiliated with a national standards association such as Credit Counselling Canada (CCC) that requires compliance with quality, financial, and ethical standards for membership? CCC requires annual audits by an independent CPA. It also conducts annual agency reviews to ensure members remain in compliance.
Is the agency accredited by an independent party? Self-accreditation is not the answer you want to hear. The agency should be accredited by a reputable third-party accrediting organisation. Independent accreditation ensures that appropriate checks and balances are in place.
Is the counsellor working with you certified? You want the person assisting you with your credit finances to be qualified. Counselling staff with CCC member agencies must achieve an Accredited Financial Counsellor Canada® designation. They must also comply with our code of Ethics and Standards of Practice established and monitored by our accreditation process to protect you, the consumer.
What is the structure of their Board of Directors? A volunteer board should be in in place. The board should not include friends or family members, but comprise a broad cross-section of the community and industry experts.
What are the fees associated with the services provided? The agency should provide full disclosure about fees. No fee should be charged prior to the service being provided. Be leery if the agency says their fees are voluntary. Any set-up fee or monthly fee should be reasonable, usually defined as $100 or less, with monthly fees no more than 10% of the amount disbursed up to a maximum of $150. The agency should ensure fees are based on affordability and be willing to waive all fees in cases of hardship.
What services does the agency offer? A wide-range of services is a good sign. This could include: financial literacy and budget coaching for those who are not in debt; debt counselling for those who need professional help digging their way out; along with providing a thorough review of ALL debt alleviation options available.
What debt relief options are offered? Each consumer’s situation is different, and agencies should present options that fit your specific needs. A one-size-fits-all approach signals that you should continue searching.
Even More Questions:
Does the agency provide educational classes or workshops? Are any of these tools offered online? Is there a fee to attend? The absence of education resources for the public should ring alarm bells.
Does counselling require a minimum amount of debt? Reputable counselling agencies will work with you regardless of how large or how small your debt may be.
How long will your financial review session last? There is no such thing as a “quick fix.” A good counsellor will spend time doing a proper intake by reviewing your income, expenses, and debts. You can expect the initial session to be at least one-hour in length.
Does the agency take a holistic approach? Some agencies only work with creditors who agree to make payments to them. A legitimate agency will take a holistic approach to helping you solve your financial difficulties.
As a final step, check with the Canadian Better Business Bureau to see if there are complaints about the providers you’ve shortlisted and how the complaints were handled.
True not-for-profit/charitable credit counselling agencies counsel and educate hundreds of thousands of consumers every year, transforming peoples lives. It all starts with selecting the right agency. Asking the right questions and receiving the right answers can ensure that your credit counselling experience is a good one.
If you need help with debt management, budgeting or general financial education, we can help you pick a credit counsellor. Click here to find a credit counsellor near you.