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False Perceptions of Credit Counseling Keep Consumers from Seeking Assistance

By Gail Cunningham

The July poll hosted on the NFCC website revealed that consumers have false perceptions about credit counseling which keep them from obtaining the help they need.

The majority of more than 2,000 poll respondents, 47 percent, indicated they are not reaching out for assistance with their financial concerns due to confusion regarding where to find substantive help.  Another 24 percent do not think they can afford the assistance offered by a credit counseling agency.

The poll numbers are disturbing on many levels. Many well-meaning consumers have been duped by unscrupulous businesses which charged them high fees, yet delivered little if any real help.  Unfortunately, these types of activities not only tar the sector, but prevent consumers from seeking the help they need.

The reality is that services provided by NFCC Member Agencies offer a stark contrast to the misconceptions reflected by the poll.  Consider the following best practices which apply to all NFCC Member Agencies:

  • Every member agency must obtain and maintain accreditation by the Council on Accreditation (COA).  COA is an independent third-party not-for-profit accrediting organization that has reviewed more than 1,500 social service programs to ensure compliance with rigorous best-practice standards.  After the initial accreditation, NFCC Member Agencies must be re-accredited every four years.
  • Counselors must understand the theories, principles, issues, counseling techniques, and forms that are applicable to credit and financial counseling, and prove that knowledge through testing on six modules related to personal finance.  Upon passing the tests, the counselor is awarded the designation of Certified Credit Counselor.  At this point, the counselor is eligible to obtain an additional certification, Certified Housing Counselor.  Professional Development Units must be earned every two years to maintain the certifications.
  • Comprehensive one-on-one money management counseling is provided with each client.  Following the counseling session every client receives a written assessment and action plan applicable to the service provided.  The action plan outlines the client’s individual situation and offers appropriate solutions, referrals and prioritized action steps.
  • Counseling services are offered free or at low cost.  Further, an NFCC Member Quality Standard to which members must comply specifies that services cannot be denied based on a person’s inability to pay.  Therefore, cost should not be a barrier to seeking assistance.
  • Financial education programs are provided on basic topics such as money management, budgeting and the responsible use of credit, as well as everyday financial life skills such as vacation planning and first-time homebuying.  Workshops and seminars are taught by qualified instructors and are designed to meet the current needs of those desiring to improve their financial knowledge.  Programs are free of charge and open to the public.

The survey also reflected despair in some of the answers.  Taken together, 19 percent of respondents either felt their situation was beyond help (13 percent), or were tired of trying to resolve their financial concern (six percent).  Only ten percent felt they could handle their situation on their own.

The NFCC wants to send a loud message to consumers who are experiencing financial distress, and that message is that legitimate help is available. People owe it to themselves and to their family to reach out to a trained and certified counselor for a review of their situation.  Delaying action only makes the problem harder to resolve.

More than three million people were assisted by an NFCC Member Agency last year.  To find a solution to your financial dilemma, reach out to the agency closest to you by dialing (800) 388-2227, or go online to www.DebtAdvice.org.  For help in Spanish, call (800) 682-9832.

The actual May poll question and responses are as follows:

Q:  I know I would benefit from credit counseling, but I’ve not reached out because

  1. I’m confused over where to find real help = 46%
  2. My problem is beyond help = 13%
  3. I can’t afford the help = 24%
  4. I think I can resolve things on my own = 10%
  5. I’m tired of trying = 6%

Note: The NFCC’s July Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from July1 – 31, 2012 and was answered by 2,274 individuals.

Gail Cunningham is Vice President of Membership & Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

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