Bad Credit

Newsweek, October, 2003 by Jennifer Barrett

After several months of mounting concerns over the high fees and aggressive tactics of some nonprofit credit-counseling agencies, the Internal Revenue Service announced last week that it would take a harder look at the business practices of such firms nationwide. But consumer advocates, while applauding the move, caution that much more needs to be done.

With consumer debt at nearly $2 trillion, debt management remains one of the nation's fastest-growing--though still largely unregulated--industries. In the past half dozen years, hundreds of nonprofit groups and for-profit companies offering credit counseling, debt consolidation and low-interest loans have sprung up throughout the United States and Canada. But as the number of new agencies has increased so have the problems....