Subscribe to our mailing list

X

Cambridge Credit Counseling Calls for Better Transparency of Credit Counseling Performance

By on March 30, 2011
Cambridge Credit Counseling Calls for Better Transparency of Credit Counseling Performance

Cambridge Credit Counseling finally went public today with its public challenge to the debt relief world to be transparent about the effectiveness of the solutions it provides. I know they’ve been working on this for a while now.

This marks the very first time I can think of when a credit counseling agency has embraced disclosing it’s performance measurements. Historically credit counseling groups and even the National Foundation for Credit Counseling (NFCC) has been unwilling to provide real data regarding the effectiveness of credit counseling.

Christopher Viale, the president and CEO of Cambridge Credit Counseling said “I’ve spoken with legislators, regulators and consumer groups, and many of them are confused about the debt relief industry. They’re confused for good reason. The data substantiating customer value has been largely unavailable to help people understand what we do, why our programs are necessary, and how consumers benefit. The Transparency Project is Cambridge’s way of answering those questions.”

The performance numbers for the Cambridge Credit Counseling program are below.

  • At the conclusion of a comprehensive counseling session, Cambridge recommended a debt management plan (DMP) to 34% of consumers (23% of consumers enrolled) – 2010
  • 94.87% of all Cambridge clients who enrolled in 2010 demonstrated the suitability of the plan as determined through their budget analysis by making their first three scheduled payments. A thorough audit performed at the 4-month mark of enrollment indicates that 98% of accounts are receiving common creditor benefits to help reduce indebtedness.
  • The typical Cambridge client received an interest rate reduction from 21.62% to 7.96% – 2010
  • The average Cambridge client saved $181.86 in interest charges per month. – 2010
  • The typical Cambridge client’s monthly payment was reduced by $192.70. – 2010
  • The average monthly fee assessed to a Cambridge client was $24.99 – 2010
  • In 2010, Cambridge clients who completed their DMP had done so in an average of 41 months.
  • Cambridge’s 2010 Quality Survey indicates that overall client satisfaction was 97.9% for new clients and 96.7% for existing clients.

It has always amazed me that while credit counseling has been considered to be the “white knight” in the debt relief world they have also been extremely secretive of the actual performance of their programs. But Cambridge has not backed away from the elephant in the room.

In their first comprehensive transparency report they talk about the completion rates for DMPs. According to a study of 2005 enrollees into the debt management plan, 48.4% completed the program in full.

That could be the most amazing number ever but until other credit counseling groups start going public with their measurements, we just won’t know. I suspect that it will be at the top of the charts though.

Now that the call for transparency has been issued, credit counseling groups will need to make sure they are accurately reporting their true performance numbers. They certainly don’t want to be accused of deceptive marketing by fudging the figures.

This effort and call for transparency by Cambridge Credit Counseling will only better assist consumers and regulators to understand the true performance of the program. By requiring transparency and competing of program effectiveness the consumer will win.

Cambridge Credit Counseling is a member of the AACC.

In the spirit of openness, Cambridge invites any agency or individual who may have questions about this initiative to contact us at (888) 694-7491, or at transparency@cambridgecredit.org.


I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.

READ  We Can't Afford Our Cambridge Credit Counseling Payment. - Kara

About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

12 Comments

  1. Steve Rhode

    March 31, 2011 at 1:12 pm

    Establishing a pattern of starting to save at the same time as getting out of debt is important. Do you think we will see more agencies embracing savings programs or building them into a DMP?

  2. Cviale

    March 31, 2011 at 12:52 pm

    33 months is the average amount of months/payments. the average lenght of a plan is 53 months but the average lenght of time it takes those that complete is only 41 months. most folks that make it through transition and dont have any other major financial setbacks, after putting some money away in savings, start to pay more then the mins to finish earlier then planned.

  3. Debt Relief Advocate

    March 31, 2011 at 11:54 am

    Chris,

    Maybe I missed it, but what was your average program length per client, taking completion and fall out rates?

  4. Cviale

    March 31, 2011 at 9:37 am

    hi mike, we have an average attrition rate of just under 3% monthly.

  5. Mike Reilly

    March 31, 2011 at 7:10 am

    Is this indicating a 5% drop rate without actually saying it? For the record, I did not watch the video.

  6. Mike Reilly

    March 31, 2011 at 11:10 am

    Is this indicating a 5% drop rate without actually saying it? For the record, I did not watch the video.

    • Cviale

      March 31, 2011 at 1:37 pm

      hi mike, we have an average attrition rate of just under 3% monthly.

      • Debt Relief Advocate

        March 31, 2011 at 3:54 pm

        Chris,

        Maybe I missed it, but what was your average program length per client, taking completion and fall out rates?

        • Cviale

          March 31, 2011 at 4:52 pm

          33 months is the average amount of months/payments. the average lenght of a plan is 53 months but the average lenght of time it takes those that complete is only 41 months. most folks that make it through transition and dont have any other major financial setbacks, after putting some money away in savings, start to pay more then the mins to finish earlier then planned.

          • Steve Rhode

            March 31, 2011 at 5:12 pm

            Establishing a pattern of starting to save at the same time as getting out of debt is important. Do you think we will see more agencies embracing savings programs or building them into a DMP?

  7. Bobby Zangrilli

    March 30, 2011 at 11:42 am

    Props to Cambridge for doing this….for one, those numbers are impressive. It also takes a lot to put yourself out there like this.

  8. Bobby Zangrilli

    March 30, 2011 at 3:42 pm

    Props to Cambridge for doing this….for one, those numbers are impressive. It also takes a lot to put yourself out there like this.

Share a Comment / Leave a Reply