AUSTIN, Texas, Feb. 6, 2013 /PRNewswire/ -- People who need help budgeting their money and paying their debts are likely to wind up at a consumer credit counseling agency. Aided by referrals from lenders, the nonprofit agencies see millions of people a year and help recover billions of dollars in debts.
"These agencies wear their nonprofit status like a halo, but the reality is that they are taking in large sums of money from people who are struggling financially," CreditCards.com Editor in Chief Daniel P. Ray said. "We think it is important to look at their performance and ask why fundamental information about them is kept under wraps."
In a six-part series this week, "Your Debt, Their Business," CreditCards.com takes an in-depth look at consumer credit counseling. Among the findings:
- Credit counseling is a marginally effective life preserver, failing more than half the time. Almost no counseling agencies publish information about their failure rates, making it difficult for clients to improve their chances of success.
- Agencies that do not qualify as nonprofits may nevertheless keep the designation for years during lengthy, secret appeals to the Internal Revenue Service. Two of the 10 largest agencies fought revocation of their status for more than five years, behind a shield of IRS privacy rules.
- Face-to-face counseling is being replaced by phone and Internet service as consolidation sweeps the sector. Hundreds of small counseling agencies have been absorbed in recent years, while the 10 largest agencies have grown to a combined $400 million in annual revenue.
- Median pay for top executives at the 10 largest agencies is about $353,000, putting several CEOs among the top 1 percent of U.S. incomes.
The main story in the series, "Behind the credit counseling curtain," can be found at http://www.creditcards.com/credit-card-news/business-credit_counseling-1282.php
CreditCards.com is the leading online credit card marketplace connecting consumers with multiple credit card issuers, including a majority of the 10 largest in the United States, based on credit card transaction volume. CreditCards.com, http://www.creditcards.com, enables consumers to search for, compare and apply for credit cards and offers credit card issuers an online channel to acquire qualified applicants.