A article in the Toronto Star today looking into practices at Consolidated Credit Counseling Services of Canada Inc., one of the largest not-for-profit credit counselling agencies in Toronto and across Canada, found that their advisors providing counselling services to potential clients are not certified counsellors.
In the story, the Star found that:
- Consolidated Credit Counselling does not employ any certified credit counsellors despite being an accredited member of the Ontario Association of Credit Counselling Services (OACSS) which requires that members employ certified counsellors.
- Turnover of debt counsellors at the agency was reported to be quite high, which raises some concern about their ability to maintain continuity of service for clients seeking credit counselling.
- There may be cause for concern about clients being advised to sign up for Debt Management Plans when this may not have been their best option and clients may not have been advised of the full impact of a debt management plan to their credit rating.
- Numerous questions were raised about financial practices at the agency including excessive consulting fees, accounting and technology fees, public relations and communication costs as well as human resources expenses. This despite the fact that counsellors were not well paid and funds do not appear to have been dedicated to certification.
- Concern was also raised about the agencies practice of suggesting clients donate any surplus in their accounts at the end of their program to the agency rather than setting up an emergency fund. Something these clients could probably benefit from.
Some other items to note:
- The cost of certification is only $1000 per counsellor. As Consolidated Credit Counselling has been operating since January 2007 does it seem reasonable that they would only currently have 3 counsellors nearing completion of the program as reported in the article?
- Although an agency may call itself “not-for-profit”, this does not mean that the majority of funding received is being expended directly on client services. Non-service related expenses can quickly turn a ‘profit’ into ‘non-profit’.
Credit counselling is a viable alternative when dealing with your debts. When looking for help, it is important to find a credible debt advisor. You can do this by:
- Getting a personal referral from a friend or family member who has successfully completed a program with either a credit counsellor or bankruptcy trustee.
- Ask if both the agency AND you individual counsellor is qualified and ask what kind of certification they have completed and what their work experience is.
- Start with a trustee in bankruptcy. Why? Because a trustee in bankruptcy is qualified since they are licensed by the federal government. A trustee is obligated to explain all of your debt relief options, not just bankruptcy or a consumer proposal. If credit counselling or a debt management plan would be a better option for you, they can refer you to a qualified credit counselling agency in your area.