--Credit Card Company Practices Have Helped Create Counseling Crisis--

Washington D.C. – As more Americans seek assistance for serious debt problems, the National Consumer Law Center (NCLC) and Consumer Federation of America (CFA) today unveiled Credit Counseling in Crisis, a report detailing the severe threat to consumers from a new generation of creditcounseling agencies. The comprehensive study found that, unlike the previous generation of mostly creditorfunded counseling services, these new agencies often harm debtors with improper advice, deceptive practices, excessive fees and abuse of their non-profit status. An estimated nine million Americans have some contact with a consumer credit counseling agency each year.

The report also concluded that creditor practices and funding reductions have caused agencies to cut back on educational services and have led more consumers to drop out of counseling and declare bankruptcy. Another key finding was that poor oversight of credit counseling agencies by the Internal Revenue Service and the states has allowed unscrupulous counseling agencies to grow and prosper.