For far too long credit counseling groups have remained silent about how their service actually performs. Many routinely direct consumers to nonprofit credit counselors but how effective are they? The actual performance numbers have always been a closely guarded secret.
That secret has been held, not out of modesty, but out of fear that when it was reveled, fans and critics alike would be shocked.
Just today, Gerri Detweiler, has published an article which looks into this issue. Her piece Does Credit Counseling Work? Initiative Reveals Cold Hard Facts praises Cambridge Credit Counseling and challenges other groups to do the same.
But until recently, data about the success (or failure) rates of credit counseling programs has been hard to come by. When asked, counseling agencies will often point to numbers of consumers they have helped, or talk about the educational services they provide to consumers. Critics, meanwhile, counter that these programs offer far too little relief, only help a fraction of the people who are in over their heads, or even that counselors are really glorified debt collectors. – Source
Gerri reached out to the National Foundation for Credit Counseling, as I have in the past asking for performance data, and she got the same result, nada.
In Gerri’s article she asked the most important question, “Does credit counseling work?” and she came away concerned that while the performance numbers by Cambridge Credit Counseling were stellar there was a significant lack of performance transparency in the credit counseling industry in general.
Other counseling agencies should be required to reveal these kinds of numbers. If creditors are going to be required to refer consumers to these agencies under federal law, there is no reason they shouldn’t be required to make this kind of information public. While I suspect the numbers Cambridge Credit Counseling has disclosed are be similar to those of other reputable national counseling agencies, it is critical that regulators, policymakers and consumers have access to this type of data.
If you would like to read the performance results of Cambridge Credit Counseling you can do so here.
Data transparency helps both consumers and lawmakers to make informed statements and decisions about what solution is best for people in trouble.
Until we have some performance transparency people are left with a situation in which a surgeon recommends three different types of surgery for a medical problem but won’t tell them which has the highest success rate for their condition. We’d never stand for that so why do we allow NFCC to get away with not sharing their data?
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