Agenda

The Permanent Subcommittee on Investigations held a this hearing to address the problems facing the credit counseling industry. Once community-based and consumer-friendly, the credit counseling industry has undergone significant transformation during the past several years. New and aggressive profit-driven participants have entered the market, causing a rash of consumer complaints about high fees, misleading advertising, and poor service. The proliferation of for-profit, “back-office” servicing companies is threatening to change the industry into a debt collection mill instead of an industry whose focus should be on consumer counseling and education. The Subcommittee’s March 24th hearing reviewed the most egregious cases of misconduct among credit counseling agencies and their for-profit service providers and examine what solutions may be available to repair the industry. The Subcommittee heard from victims and ex-employees of the credit counseling industry, representatives of for-profit service providers and credit counseling associations, as well as a panel of government regulators.

In conjunction with the hearing, the Subcommittee issued a Subcommittee Staff Report entitled ‘‘Profiteering in a Non-Profit Industry: Abusive Practices in Credit Counseling."  The Report is available on p. 203 of the final Printed Hearing Record which can be accessed via the link at top left of this webpage.

Witnesses

Panel 1

• Raymond Schuck

  Victim

  Cambridge Credit Counseling, Inc.

  Lima, Ohio
• John Pohlman

  Former Employee

  Cambridge Credit Counseling Corp.

  East Granby, Connecticut
• Jolanta Troy

  Victim

  AmeriDebt, Inc.

  Carlies, Pennsylvania
• John Paul Allen

  Former Employee

  AmeriDebt, Inc.

  New Market, Maryland

Panel 2

• Chris Viale

  General Manager

  Cambridge Credit Counseling Corp.
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• Matthew Case

  Chief Executive Officer

  AmeriDebt, Inc.

  Germantown, Maryland
• Cuba Craig

  Chief Executive Officer

  American Financial Solutions

  Seattle, Washington
• James Kroening

  Director

  FamilyMeans Consumer Credit Counseling Service

  Stillwater, Minnesota

Panel 3

• John Puccio

  Chief Executive Officer

  Cambridge Credit Counseling Corp.

  Agawam, Massachusetts
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• Andris Pukke

  President

  Debtworks, Inc.

  Germantown, Maryland
• Michael Malesardi

  Chief Financial Officer

  The Ballenger Group, LLC

  Frederick, Maryland,
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• Bernaldo Dancel

  Chief Executive Officer

  Amerix Corporation

  Columbia, Maryland
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Panel 4

• The Honorable  Mark W. Everson

  Commissioner

  Internal Revenue Service

  Washington, D.C.
• The Honorable  Thomas B. Leary

  Commissioner

  Federal Trade Commission

  Washington, D.C.
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