Gail Vaz-Oxlade & Scott Hannah - How to Find the Best Non Profit Credit Counselling Services in Canada | Toronto Radio Show
|Gail Vaz-Oxlade helps consumers figure out who the "crappy credit counsellors" are on her radio show, The Late Shift.|
On her Toronto based radio show, The Late Shift, Gail Vaz-Oxlade, host of the popular TV shows Til Debt Do Us Part and Princess, asked Scott Hannah, President & CEO of the non profit Credit Counselling Society, how to tell the difference between top quality credit counselling services and those that aren’t.
How to Tell the Difference Between a Good and Not-So-Good Credit Counselling Company
Gail was curious, “How do I know when I pick up the telephone and call any organization that labels itself credit counselling . . . how do I distinguish between the good credit counsellors and the crappy credit counsellors?”
Scott agreed that with something as important as your money, you need to know who you’re dealing with. Here is how:
Find out if the organization is licensed in the province in which it operates.
Find out if the organization has any complaints against them.
- Check with the Better Business Bureau (BBB)
- Check with your province’s consumer protection authority
Ask if their Counsellors are certified.
- The Toronto Star recently reported that some credit counselling services have no certified Counsellors.
- If the company does have certified Counsellors, ask what the Counsellors do each year to keep their certification up to date.
Scott explained that the Credit Counselling Society requires their Counsellors to become certified through the Accredited Financial Counsellor Canada Program which is administered by the Association for Financial Counselling and Planning Education.
Ask if the organization is accredited by a recognized national non-profit association.
- Credit Counselling Canada has the highest accreditation standards in Canada.
Gail was Curious
Gail asked Scott how to tell the difference between agencies because she was concerned that “there are some credit counsellors out there who do not have the consumer’s best interest at heart.”
Speaking for many consumers, Gail stated that, “The big frustration is we can’t tell the good guys from the not so good guys. If there was some way that we could identify people like you [and your staff] who are clearly focused on the best interest of the client” that would clearly help consumers.
How Successful are Credit Counselling Services?
One of the concerns Gail asked Scott about is that some credit counselling agencies aren’t doing enough to educate consumers. Because of this, their debt repayment programs have high recidivism rates (where people have to repeat their program because they didn’t learn how to manage their debt and finances properly the first time).
In sharing Gail’s concern, Scott explained that the Credit Counselling Society has “sat down with over 200,000 consumers. We’ve help over 15,000 reorganize their debts on a repayment program. Our recidivism rate is 7. Not 7 percent. 7 people. We don’t want repeats [on our program]. We want people to learn.”
This kind of success is a far cry from what Gail said she hears about some other credit counselling organizations. Gail says, “I’ve gotten loads of letters from people who have gone through credit counselling and they have not been rehabilitated.” She said that one lady even sent her a message yesterday saying, “Five years in credit counselling. Didn’t learn a thing. Had to learn from your show.”
Scott responded by confidently stating, “that wasn’t one of our clients.” Gail admitted that it wasn’t but she still wanted to know, “As a consumer (who is) shopping (for a credit counselling service) how do I tell the good from the bad?”
Why Speak with a Top Rated Free Non Profit Credit Counselling Agency Before a Bankruptcy Trustee?
Gail asked Scott why a consumer should go to a free, non-profit credit counsellor as opposed to a bankruptcy trustee. Scott answered by sharing that his organization actually refers a lot of people to bankruptcy trustees when that appears to be the best solution for an individual’s financial situation.
However, he went on to admit, “It frustrates me that more people wouldn’t come to us at an earlier stage of difficulty when all they need is a budget tune-up, as opposed to struggling and waiting until the very end when there are no other options but bankruptcy. . . Bankruptcy deals with the symptoms of a person’s debt, not the problem.”
No One Wants to Have Debt Troubles | Get Help from a Non Profit Credit Counselling Service
Scott continued by sharing, “It’s always been my experience that 99.9% of our population wants to be responsible, wants to maintain and regain their good credit rating. Some people just need help.”
The interview ended with Scott reflecting on why top credit counselling organizations provide the best service. “We always keep our clients firmly in front of us. The moment we lose sight of why we are in operation, we are no good to that consumer anymore.”
If you would like help to get your finances back on track and help to put together a plan to get out of debt you can contact the Credit Counselling Society at 1-888-527-8999. In Toronto you can reach the Credit Counselling Society at 647-776-0485.
How to Listen to the Interview
To listen to the interview press play on the audio bar below or visit Gail's radio show page on Newstalk 1010 and go to the March 4, 2013 broadcast (skip forward to 1:05:18 for the start of the interview).
It is a misconception that a credit counselling agency is somehow a better choice than a trustee in bankruptcy for an initial consultation. A trustee can go over all of the options, including referring a debtor to a legitimate credit counselling agency, s opposed to the various ones the provincial governments are trying to outlaw and shut down.
Thanks for your comment Ira. If someone really does need to go bankrupt or if a consumer proposal is their best option, then visiting a bankruptcy trustee for an initial consultation would of course make the most sense.
However,we have found that for most people visiting a quality non-profit credit counselling agency first - like ours - is often a better first step. An organization like ours will take the time to help each person understand their financial situation by helping them first create a budget and then look at what options they have to get out of debt. Our goal is to educate people about how to manage their finances better while helping them get back on track at the same time. At the end of the day, if bankruptcy or a consumer proposal appears to be in someone's best interest, then we will always refer them to a reputable trustee in their area.
From our experience and from what our clients tell us, this approach seems to work very well for consumers, and it allows trustees to focus on helping people who need their services the most.
The calculation of recidivism (repeat clients) is a statistic that is fundamentally flawed. It is unlikely that a consumer helped by one credit counseling organization would go to the same credit counseling organization a second time. That credit counseling does not keep a public record of clients only supports the position that it is impossible to validate this number.
More importantly the interview fails to mention the percentage of programs that fail (where the consumer does not complete the program). That number is substantially high.
It is also important for consumers to confirm that each person in the credit counseling organization is "certified". In most instances the organization only has a handful of certified counselors.