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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Take Charge America||Date: 7/15/2005 9:52 AM|
|Author: vkg||Number: 208348 of 311359|
Take Charge America was formerly Credit Counselors of America.
The Motley Fool was not impressed with them. http://www.fool.com/news/commentary/2003/commentary030415dy.htm
They are a for-profit credit counseling. The name change was probably to disassociate them from their past.
The following is a except from the URL listed below:
Characterizing creditor contributions as donations may be even more misleading. The reality is that creditors pay a Fair Share to these agencies because the agencies are helping creditors to collect
debts. It is also deceptive to characterize Fair Share contributions as voluntary.
The industry standard is that agencies propose the DMPs to creditors and creditors pay for them. It is a business arrangement,
not a charity. The industry disputes this interpretation. NFCC, for example, emphasizes that Fair Share is a voluntary contribution by creditors and that no contract exists between the agencies and the creditors. Although this may be technically true, the reality of the industry is that agencies expect payments from creditors for DMPs and creditors expect to pay. This is evident in the I.R.S. 990 reports of many agencies. Credit Counselors of America in its 1999 tax report, for example, describes Fair Share revenue as “…fees charged to banks, credit card companys and other creditors on payments collected
from members that are then distributed to the members' creditors.” The agency is honestly describing the way these programs generally work---the agencies propose DMPs and both the agencies and creditors expect that the creditors will return a portion of the amounts distributed to the agencies. These are “fees charged” to the creditors, not donations from the creditors.
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