A woman’s husband had just died. She didn’t know what to do, but she knew she was in financial trouble.
She called InCharge and told her story. The credit counselor listened, offered some reassurance and set up a meeting. Then she went into the bathroom and broke down crying.
“Oh my God!” she told Margarita Larrea-Berg, “you won’t believe it.”
Larrea-Berg is in charge of training the credit counseling agency. She just happened to be there as the counselor stood in front of the mirror dabbing away tears.
“That’s the type of individual we have in the organization,” she recalled. “They have a heart for helping people.”
As important as that is, it’s sadly not enough. Nuns have hearts of gold but you might not want to turn to them for advice on lowering the interest rate on your Visa card.
It takes training, and lots of it, for credit counselors to know what to say when the phone rings and somebody says they need help handling their debts. No two calls are the same but there are some common traits.
“Sometimes it’s a devastating event, but a lot of times they don’t know why they’re in trouble,” Larrea-Berg said. “You have to pull out the information they don’t know themselves.”
If confused consumers aren’t careful, a bad credit counselor will only add to their misery. The first thing they should look for is a counseling agency that is certified by the National Foundation for Credit Counseling.
It’s the nation’s oldest and largest nonprofit financial counseling organization. Every member is accredited by the Council on Accreditation, an independent accrediting organization.
The NFCC has a trademarked Counselor Certification Program. Larrea-Berg said a candidate for a counseling job usually comes with an empathetic heart. Then the real training begins.
They learn the basics of business, like bankruptcy rules, student loan regulations, credit review procedures, debt management planning and financial education.
All that information is worthless if it’s not shared properly. Candidates don’t just ask questions and type the answers into a computer program that spits out plan. They listen to actual calls, they role-play with supervisors and learn to develop a rapport with customers.
After a couple of weeks, most candidates are ready to begin a probationary period taking calls. A supervisor monitors and critiques the interactions.
Candidates also being taking Credit Education Units, which are courses developed the NFCC. Larrea-Berg said it takes between three and six months for a candidate to gain initial certification. Maintaining that status never really ends since counselors must get re-certified every two years.
The credit counseling industry is largely self-regulated, with South Carolina and Pennsylvania the only states that require counselors to be certified. But South Carolina requires counselors pass 12 CEUs every two years and Pennsylvania requires 16 CEUs.
InCharge counselors must pass 20 CEUs, a process that takes about 1,000 hours. And the NFCC monitors the curriculum to make sure it is keeping up with financial trends.
“They come in every four years and audit all our programs,” Larrea-Berg said. “They make sure we are actually meeting the needs of the population at large.”
The stringent standards are designed to weed out counseling agencies that do not serve that purpose. Debt-settlement organizations are particularly suspect since they advise customers to stop paying their bills in hopes creditors will reduce the debt. It’s a risky strategy that destroys a client’s credit standing and there’s no guarantee creditors will play along.
“We get stories from people who’ve gone to a debt-settlement company and paid through the nose,” Larrea-Berg said.
She said be wary if a debt-reduction organization demands an up-front payment. Also watch out for organizations that are more intent on making their customers happy than making them financially solvent.
“They want to live the way the way they’ve been living, paying $240 a month for cable, $500 a month going out to dinner,” Larrea-Berg said. “A good credit counselor will look at the situation and actually tell a client what they need to hear, not just what they want to hear.”
Another warning sign is an organization that never turns down business. InCharge often puts clients in a debt management program, with better interest rates. The client makes one consolidated payment a month to InCharge, which distributes the money to creditors.
There is no charge for counseling, but customers pay a monthly fee if they enroll in a the program. Larrea-Berg said InCharge counselors do not always recommend debt consolidation. Coming up with the right strategy is based on all those certified programs.
After all the ins-and-outs are learned and the numbers are crunched, however, a good counselor must have one trait that is can’t be officially certified.
Larrea-Berg saw it in the bathroom one day.
“You think about the clients and what they are going through,” she said, “and you want to do everything in your power to help that person.”