We answer your questions about credit counseling: Part 2

You might have decided after reading part 1 of this two-part series that you definitely need credit counseling – no ifs, ands or buts. However, now you might be wondering how reputable these services are. “Is this Advantage CCS place legit?” you might think. Or maybe you're wondering, “How can I distinguish between a reputable credit counseling agency and an office full of rip-off merchants?

Advantage CCS credit counseling is time-tested and designed with consumers' best interests in mind

Liz Pulliam Weston is a regular contributor to MSN Money. She has done extensive research on what constitutes reputable credit counseling agencies and what makes a credit counseling agency fraudulent. According to Weston, “Debt counseling has become a $7 billion industry, but not all the players are legitimate.” And that's unfortunate. The worst thing a so-called “helper” agency can do to someone who's down and out is to kick him or her harder!

The United States Federal Trade Commission (FTC) expressly states that credit counseling agencies engaging in fraud or trickery are in clear violation of the law. So before you sign up for any credit counseling services, read the following documentation on the FTC's Web site: http://www.ftc.gov/bcp/conline/pubs/credit/fiscal.shtm.

A reputable credit counseling agency is an agency that bears accreditation. Advantage CCS is a member of the National Foundation for Credit Counseling (NFCC), a non-profit that dictates the standards to which reputable credit counseling agencies must adhere. A visit to the NFCC official Web site, www.nfcc.org demonstrates that NFCC member agencies are those agencies that have been shown to engage in reputable credit counseling practices. The NFCC also sets the standards for credit counseling training. So, should you sign up for Advantage CCS credit counseling sessions, your counselor will have gone through hours of professional training so he or she can work to serve the needs of people with debt problems just like yours.

Advantage CCS is accredited by the Council on Accreditation of Services for Families and Children, Inc., or COA. COA enforces standards for credit counseling agencies, and requires that they remain transparent and accountable in all activities. Those credit counseling agencies that are accredited by COA are NFCC members.

The National Foundation for Credit Counseling has strict standards to which it holds all of its members. Member counseling agencies are forbidden from discriminating against anyone seeking counseling services. They are required to offer complete, one-on-one counseling and debt management services, and must document client progress. All counseling interactions with clients must be kept confidential, and monetary fraud or abuse -- including trading leads with debtors or charging illicit fees for counseling services -- is expressly prohibited.

Now we know what a good credit counseling agency looks like. What are some warning signs of disreputable agencies?

Disreputable agencies can look very different from the outsider's perspective, but closer examinations of how they do business will usually unmask their fraudulent ways.

First, avoid any credit counseling service that promises to make all of your financial problems go away – especially if they charge outrageous “starter” fees. The goal of a credit counseling service is NOT to make your money problems and debts disappear. Instead, you will acquire the tools you need through counseling to make changes to your financial situation yourself. The language fraudulent agencies use in their advertising is all-too telling:

“ Pay now, we'll erase your debts!”
“ Our credit counseling services eliminate your money problems!”
“ Bye-bye debt! Sign up with us, and for a fee, you can wave your debts goodbye!”

Ask how much money a credit counseling service charges for sessions. There are agencies out there that can charge you thousands of dollars for services – and that's money you'll never see again. Credit counseling services like Advantage CCS help you to pay back the money you owe in debts. Fraudulent counseling professionals take your money for themselves to enjoy.

Ask to see credentials. If a credit counseling agency is not accredited, say “No thanks.” Over the long run, you will suffer for enrolling in counseling with an unprofessional or sham agency. You might get a counselor who has no professional credentials or training – and that person is going to tell you what you want to hear, no matter how unhelpful it ultimately is from a financial discipline standpoint. If a credit counseling agency is passed over for accreditation time and time again, there are usually many strikes against it, often involving financial fraud or theft from clients.

We hope you've found the information in this two-part credit counseling series to be helpful. Feel free to sign up with Advantage CCS if you want to get the debt monkey off your back!