Share
PrintReal Deal: Credit Counseling
For people with big debts or in a credit crunch, the ads in the phone book look promising. Get out of debt they say, consolidate your bills. But our investigation found the credit counseling system is basically out of control in Massachusetts. There are no licensing, no registration, and no training requirements.
Victims like Kathy Pennelatore told us some companies had actually put them deeper in debt.
- Kathy Pennelatore
"Nobody can correct this mess, nobody."
But correcting the mess is just what State Senator Fred Berry is now trying to do.
- Fred Berry, State Senator
"I think it's outrageous."
Berry is pushing to change the rules for credit counselors. His new bill creates a strict system to regulate all such companies operating in Massachusetts.
- Hank Phillippi Ryan
"So what's your big picture goal for this bill?"
- Fred Berry
"So counselors have someone to answer to and B: so we can protect our citizens."
Berry's bill calls for:
Without changes, Berry says unscrupulous companies can continue to rip off vulnerable customers.
- Fred Berry
"To me that spells danger."
Right now Massachusetts law only requires credit counselors be an attorney or registered as a nonprofit corporation. But our investigation had also found most counseling services listed in the phone book were not properly registered with the Attorney General's office. That's illegal.
So we just checked again, and now, almost five months later, those companies are still unregistered.
The Attorney General's office admits nothing's been done, and now supports Senator Berry's bill to protect consumers.
- Hank Phillippi Ryan
"What if things don't change?"
- Fred Berry
"I think we have a lot of vulnerable people out there waiting to be taken."
Public hearings will soon be held on the proposed new rules. And if you've had problems with a credit counseling service, lawmakers will want to hear from you.
For more information on the bill or the public hearings, click here for Sen. Fred Berry's Web site: www.fredberry.com.