Are you looking for government approved credit counseling? What is it anyway? How do you know if the credit counselor you choose is “approved” and safe?
It may help to know that each state has compliance requirements for licensed credit counselors in their state under the Uniformed Debt Management Services Act (UDMSA) which was passed into law in 2005. This law gives full regulatory authority to the states to enact the law for service providers doing business in their state.
Because of this law, there are variations in the specific requirements for credit counseling from state to state, but here are some general guidelines that apply to most of the states:
• Credit Counseling agencies must be licensed or registered within the state they are providing debt management services
• There are mandatory disclosures and agreements that must be provided to the consumer by the credit counseling agency
• The credit counseling agency must maintain insurance, post a bond and meet required levels of competency
• Maximum fees allowed are regulated by the state
• Consumer funds must be held in a trust account
For credit counseling agencies providing services in multiple states, they must maintain license and be fully registered in each state as well as maintaining compliance with state laws. Most national credit counseling agencies have a team of individuals on staff that monitor compliance issues and make sure that they are meeting requirements at all times.
If you deal with a licensed and registered credit counseling agency you can be sure that they have met the regulations of the state in which you reside and are working to maintain compliance so that they can continue to provide services to consumers like yourself for years to come.
It’s a good idea to understand your rights as a consumer and know the questions to ask to ensure you are dealing with a reputable agency.
Some questions to ask your credit counselor include:
1. Are you licensed and registered in my state?
2. Do you fully disclose your fee structure and provide a written estimate for any programs I might enroll in?
3. What is your BBB rating?
4. Are your counselors certified and do they receive ongoing education?
It’s a fact that there are scammers out there looking to prey on people who are trying to find a way to handle their debt. Don’t fall victim to their schemes! Make sure you educate yourself about what to look for and find a government approved credit counseling agency to talk to in your state.
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Consumer Education Services, Inc. empowers people to overcome their financial challenges and lead financially-healthy lives.
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