Question 1: Ben, you've been
warning consumers about the abuse of the term "non-profit" for over
a decade, haven't you? Were you surprised by this announcement?
Answer 1: I was surprised
that they've finally awakened a sleeping giant--or two of them I should say.
It's about time.
Question 2: So what's at the
center of this joint investigation by the IRS and FTC?
Answer 2: First let me
clarify that the I.R.S. is declining to identify specific agencies it's
investigating. All they've said is that they're auditing "a significant
number" of credit counselors and is conducting a more rigorous review of
new ones that apply for tax exemption. The agency's examining fees charged to
consumers, as well as the salaries paid to officers of these
"non-profits" and even more importantly, a slew of transactions
these "non-profits" are suspected on engaging in with
closely-affiliate "for-profit" companies.
Question 3: So what are they
doing to potentially violate their "non-profit" status?
Answer 3: It's
alleged that there could be some less-than-arm's-length transactions between
the "non-profit" companies that are promoting themselves as a
non-profit resource but then they engage is a level of self-dealing with
affiliated companies that are clearly for profit companies.
And frankly this whole idea of non-profit has been so abused over the last
decade and is so misunderstood that the no-brainer, cure-all solution touted
by this nation's media of "seek the assistance of a non-profit credit
counseling agency" is about to be reassessed, thank God. What most people
don't realize is that to qualify as a non-profit credit counseling agency and
to be exempt from taxes, a credit counseling agency must limit its services to
poor customers or must primarily provide education and counseling to the
public. Simply enrolling people in payment plans isn't enough.
Answer 4: Because of two
things. #1 is the fact that I
don't they've ever done a very good and consistent job of making consumers
understand how they're actually paid. The "non-profit" line has
consistently confused debtors for years-confused them into thinking that it's
some sort of charity-and they're clearly anything but this. Consumers need to
realize that these credit counseling agencies are being paid by the creditors
they're collecting for. That's right: While CCCS and others like them talk
about the creditors paying their "fair share," one fact is
painfully simple: Whether you call it a fair share or a commission, it makes
the credit counselor, non-profit or otherwise, a debt collector in my book.
And therein lies the biggest conflict of all.
And the #2 reason is closely
related to my #1 sticking point and here's an example I know everyone can
grasp:
If you and your spouse were going through an acrimonious divorce, would you
both agree to be represented by the same attorney in order to save money? I
doubt it...and an attorney agreed to be put into a position like this, he (or
she) would be guilty of conflict of interest.
So why would consumers be willing to spill their guts about their deepest,
darkest financial secrets to a non-profit credit counselor if that credit
counselor is clearly being compensated by the creditors to whom they owe
money? I suspect they wouldn't if they knew up front how these non-profit
angels were being paid and by whom!
Question 5: You've gone on
record about these facts many time over the years and in fact, have a chapter
in your new book that's dedicated to the very subject...
Question 6: Okay Ben, so what
should consumers in financial trouble do?
Answer 7: We've already
accomplished a lot of what I've been advocating forever right here this
morning. The biggest part of the education process is simply
understanding how the credit counselor is making their living. I don't
begrudge anyone making a profit-I'm not doing what I do for my health and I'm
not seeking sainthood, either. It's okay for a credit counseling company to
make a profit, just don't play games and hide behind the
"non-profit" shield. If the IRS has their way, the term non-profit
is about to be cleaned up-and it's about time.
Close: If you'd like to learn
more about non-profit credit counseling or debt re-negotiation services, or
read the entire chapter Ben devoted to this industry in his latest book
Back
Off!, be sure to check out his
award-winning
website at
www.benjamindover.com and
you can always link to all of Ben's information through
www.kvue.com.
Struggling with your monthly house payment? You
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Okay, so you're about to move; it's time to go down your "things to
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Put in your change of address on your mail? [Check!!]
Have all of your belongings held hostage by some rogue movers? [Check...not!!!]
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Time to get off your butt and start making travel
plans for the Thanksgiving holiday weekend! (You're on the clock and it's now
45 days away):
Stretch your travel budget and get your
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Still looking for a cool birthday (or other special occasion) gift that'll
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If you (or someone you know) is even remotely thinking about joining some
non-profit credit counseling service, hiring a debt re-negotiation company or
filing for bankruptcy, you might wanna read this first:
Trust
me, you'll be more informed and a lot more grateful 10-minutes (or less) from
now.....
It's probably time you got that unfinished business with your pals at the
IRS handled for (hopefully) good:
Tie down
those tax-related loose-ends on your terms and get a deal worked out before
it's too late. Non-filers...innocent spouses...941 (payroll taxes) for the
entrepreneurs amongst us: Know
all your options and learn why hiring an Enrolled Agent probably makes the
most sense.
It's time to level the playing
field with the long-awaited new edition of Back
Off! The Definitive Guide To Stopping Collection Agency Harassment:
Read
sample chapters from the new book!
Get the inside scoop on
those "non-profit" credit counseling agencies.
Read all about the
biggest thugs operating under the noses of authorities, rogue collection
agencies that terrorize unwitting consumers.
Got credit problems? (Know someone who does?) Wanna know more about the
inner-workings of that black hole known as the credit reporting bureau?
You can get a digital copy of Ben's 1993 (#5) bestseller Life
After Debt on-line, right now. Read
how right here.....
Wanna buy your first home...or a bigger
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Speaking of Thanksgiving...wanna be a
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Still
looking for a cool birthday (or other special occasion) gift that'll keep on
giving, all year
long? Then give 'em a subscription
to the Dose
of Dover...the
most reliable source of insight and no s*** ideas
available on the planet. (You can
afford it...it's free!)
Time to share the wealth! Sign-up
for a subscription to the weekly Dose of Dover Newsletter right
here!
Is the bottom about to finally fall
out of the credit counseling industry? I hope so...and it's
about damned time. Let the great shake-out begin: As the
IRS and FTC investigations of the industry heats up, AmeriDebt finds itself in
deep doo-doo for the crap they've allegedly been pulling on unwitting/trusting
consumers buried in debt. Making you smarter than everyone else (11
years before everyone finally woke up on this one), one late payment at a
time, check
out the October 23, 2003 edition of Ask Benjamin Dover from The Dallas
Morning News right here!
