Yesterday I belayed my urge to spew bile in favor of a more positive posting. Not today.
With all that's gone on with Ameridebt and the NCC, thousands (perhaps over a hundred thousand!) of their clients find themselves stuck, without their credit counseling agency doing anything for them.
Naturally, other more reputable credit counselors are seeking to help all of these clients who have been left hanging; Springboard is waiving enrollment fees for former Ameridebt clients.
The problem is with some of the creditors.
By now we all know Ameridebt was taking advantage of their clients; they were charging a huge upfront fee and then providing shoddy service. In California and other states, enrollment fees are capped by law. This didn't seem to matter to Ameridebt.
My question was always "why would a creditor cooperate with them when they're so clearly evil?" The answer was, some creditors LIKED the fact that Ameridebt would charge such a high initial fee. They figured the clients who had to pay so much at the outset would be more likely to stick with their debt management plan... they'd have too much invested to quit.
Problem was, Ameridebt collected that first payment and then provided shoddy service. There was no incentive for the agency to keep the clients on the plan; they'd already made their money, and every client interaction from then on was a drain on the agency. The best case scenario for Ameridebt was a client to signed up, paid the large fee, and dropped out a month later. And they made that happen.
So anyhow, now we find those same clients adrift, hopefully hooking up with COA-accredited agencies (the kind that charge modest monthly fees for the life of the plan--so they have every incentive to keep the client successful until their debts are completely repaid). Problem is, some creditors *cough*cough*BankofOurCountry*cough*cough* are making those clients reapply as though they are signing up for a new DMP-- which is a problem, since creditors won't "re-age" more than once in a set time period (it varies from creditor to creditor). The point is, it's bad for the clients.
Other, more responsible creditors, like Citibank and MBNA, are letting those clients roll their existing plan over to a new credit counseling agency with out penalizing them for having been a victim of Ameridebt's greed. Why not Bank of TheCountryWeAllLiveIn?