The Credit Counseling Scam

This morning, on NPR, they interviewed the Commissioner of the Internal Revenue Service. He said one of the IRS's highest priorities is to crack down on scams by supposedly non-profit credit counseling services. He said half of them are currently under audit by the IRS.

He said a typical scam involves a counseling service simply repackaging a person's debt with a for-profit loan company that has close financial ties to the head of the "non-profit."

There used to be legitimate non-profit counselors, largely funded by the credit card industry. However, but their funding got reduced and they can't afford as much advertising as the scammers.

This issue is important because Congress is mandating use of credit counselors in the new bankruptcy bill.

Here's another recent story on the topic from NPR.

http://www.npr.org/templates/story/story.php?storyId=4582254

...in elementary school and credit cards should be issued only after students as responsible adults can pass a credit comprehension exam. Now with the bankruptcy bill there will be millions of current and future debtor slaves who will never be able to get out of debt.

In my mail box this week were over twenty credit card/mortgage unsolicited pre-approval credit offers to me personally and that goes on week after week after week.