Hank Investigates: Credit Counseling
Beacon Hill lawmakers now confirm what our 7News exclusive investigation reported for more than 2 years. Some consumer credit counseling companies that promise to get you out of debt - are often making financial situations worse.
"Many of these newer firms have quickly developed a reputation for substandard work, questionable business practices and illegal operations."
St. Sen. Cheryl Jacques, (D) Needham
Our stories had showed victim after victim, saying unscrupulous credit counseling companies were hurting more than helping.
"What happened to your money?"
"They took it."
Some of those victims told their stories again at the State House
"I contacted Channel 7 News who contacted the company and basically got my money back."
Now, this comprehensive senate committee report confirms what our investigation first uncovered: 75 percent of companies are operating illegally. Consumers are being seriously harmed. And state laws are too antiquated to cope with the problem.
Senator Jacques says: cracking down is a top priority.
"In Massachusetts, we are committed we will raise the standards to prevent unscrupulous agencies from preying on consumers most in need of honest financial counseling."
Jacques will now spearhead new laws to revamp the way these companies operate:
- Regulation by the division of banks
- A cap on fees
- Written consent and disclosure forms
- Mandatory liability insurance or bond
Those who were harmed by these companies say itís about time.
"It really needs to change thereís nothing protecting us. Nothing whatsoever."
The Massachusetts Attorney General's Office has promised to crack down on these agencies to protect consumers until the law has changed.
For previous reports: