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.