A New Approach to Tackling Debt is Needed

 At Consumer Credit Counseling Service of Buffalo (CCCS), we are encouraged to see recent media attention highlighting the dubious and predatory practices of local debt collection companies. The New York State Attorney General herself visited Western New York last month to call for increased regulation of the debt collection industry. It is extremely heartening to see how she is standing up for New York residents who are often victimized (sometimes repeatedly) by dodgy businesses with underhanded motives.

CCCS has sought reform for many years — and heard hundreds of tragic horror stories — yet as critical as it is, we have been unable to attract the proper attention or receive the necessary support for this issue until now.

Debt collection companies are commonly problematic — in certain need of increased control — but the issue is much larger than just that. The average person has little understanding of the world of debt, credit and credit repair. It is no wonder that an entire world of debt consolidation and debt settlement has emerged to “help” consumers manage their debt. 

If you are having problems with credit and debt, it is usually a tumultuous time in your life. You may be backed into a corner — desperate — and not sure what to do. If you google “How can I get out of credit card debt in Buffalo?” you will find nearly 30 for profit companies willing to help you “settle your debt.”

It is time for a new approach.

Debt has long been a huge problem for Americans. Currently 35% of Americans carry credit card debt from month to month with $15,561 as the average credit card debt per household. Debt is not simply a financial problem; it impacts emotional health and regularly leads to frustration, depression, embarrassment and the pervasive feeling of being completely overwhelmed. 

At the same time, lack of credit similarly causes stress for countless individuals. 47% of Americans presently have low or no credit meaning they are locked out of access to safe credit, driving them into the hands of an alternate economy filled with usurious payday lenders. Without good credit, consumers pay higher interest rates on everything from credit cards to car loans to mortgages. Credit scores also play a leading role in setting home and auto insurance premiums.

In Western New York, approximately 40% of residents have either low credit or no credit. Having no credit can be as bad as having poor credit, possibly even worse because there are extremely limited resources available to help individuals establish credit. The general public is poorly educated in this area. People with poor credit, no credit or debt are worried, scared…and just want the problem to go away. They easily fall prey to the seductive messaging of settlement companies with unlimited advertising budgets.

Financial experts across the world unilaterally agree that best method to systematically pay down outstanding debt is through a Debt Management Program offered by an accredited nonprofit Credit Counseling agency, like CCCS, where certified credit counselors work in cooperation with creditors. Sadly, countless people suffer because too many people are attracted to the companies that peddle illusions. Better, safer and far more helpful options like debt management programs, run by nonprofit organizations with no advertising budgets, remain under the radar. We must make the general public aware that there are options; that there is hope…all they need to do is call us at 716-712-2060. 

We truly appreciate New York State’s recent push to hold debt collection companies accountable and hope that it is just the beginning of wider efforts to help the public navigate the challenging financial world around them. CCCS is here to help all those who need us.

-Originally published in the Niagara Gazette