Community Credit Counseling Services

ouse of Commons - Entreprises, innovation et compétences : Additional documentary proof of consumer credit advice

Tuesday's meeting spanned a number of topics, but had no opportunity to debate the financing scheme of the FSC. Therefore, this record explains how the agreement works and how it contributes to ensuring, through volunteer agreements with the creditors community, that we are able to offer free, unbiased and high value credit counselling to individuals when needed.

Over 400,000 individuals have benefited from assistance from Credit Cacs to solve their own debts over the past year. Established in 1993, an important policy of CSSF has been that funds from the retail sector should finance the charitable organization to help and assist the over-indebted. In the early years of the CCMS, much attention and care was devoted by the Chair and Fiduciaries to obtaining the assistance of creditors.

Today, practically all large financial institutions, credit cards firms and other providers of credit have agreed to accept paying an FSC in appreciation of the unparalleled services provided by CMS to the financial ailing. Disbursement is made on the basis that creditsors reimburse a proportion of the funds reimbursed to them through Debt Management Plans (DMPs). Customers receive every cent disbursed to repay their debt, while providers of credit make separate donations to ACCS.

As a result, it is possible for ECCS to offer a free and unbiased assistance program that provides help and assistance to all. Importantly, it is important to understand that our lenders' sponsorship of CRCS is built on volunteer contributions that nevertheless offer us a source of sustained income. Research shows that borrower with higher debts are more hesitant to talk to their lenders and do not want to afford help.

CCCS' objective is to provide its customers with an opportunity to pay back their debt over the course of a period of time through DMPs. For this purpose, CCCS paid 289 million pounds of customer funds to bondholders in 2010, while the charity's revenue from the FSC' amounted to 28.6 million pounds (90% of total revenues).

Technology development in the shape of our unmatched on-line consulting services debit remedy and the adoption of its rule-based approaches to our phone help lines has enabled us to quickly intensify our operations during the downturn to satisfy the 35% growth in demands for our services and do more for less.

Although only one in 10 of the services we offer is suitable for FSE, this is sufficient to make sure that CCCS can impartially assist the nine out of ten individuals who get in touch with us and do not resort to a reimbursement schedule. Nevertheless, the successful outcome of the equitable sharing agreement has led some business stakeholders to reflect on how to enhance their financing arrangements.

Payplan, a for-profit indebtedness administration institution, is financed through similar contract arrangements with lenders so that it can provide DMPs free of charge. Payplan is, however, an undertaking and must therefore take account of its outcome when determining to whom it provides services. In order to endorse its scheme, Payplan, like the other for-profits, is engaged in selectivity - the business offers borrowers who can find at least 50 pounds of available revenue in their money budget - other individuals who struggle with huge debts have to seek help elsewhere.

Conversely, we have a carbon payment system at our disposal, which we will fully introduce in 2012, to give additional respite to borrowers with a transient revenue shock added (9.1-9.2). Further extension of this kind of financing agreement therefore poses a serious risk to the benefits of fairly sharing for the broader UK consultancy needs.

While it may seem on the surface appealing to expand fairly shared financing to charge loaders, there is a real threat that this will jeopardise the full breadth of customer -needed customer credit lines. Our major exposure is that for-profit businesses would still focus advisory services on the most lucrative forms of credit (see points 7.1 and 7.2 of our template) - while charitable organisations such as those serving all borrowers, such as the Central Credit Committee (CCCS), would be at stake (7.6).

Our filing with the investigation showed that there is powerful proof that for-profit credit rating companies are trying to figure out who to help on the basis of whether customers are providing them with a source of income or not (7.3-7.4). The fact that companies are looking for profits rather than the best guidance is a major result of a recent survey of the industry conducted by the Office of Fair Trade (7.1).

The risk of opening up a level playing field for trading companies is therefore that they would encourage this conduct on an industry-wide basis, which would be all the more necessary for revenue and crucial for our competitive edge. Rather than build on what works, extending the equitable portion to for-profits would diminish the value of the solution available to customers and compromise the overall level of services we try to offer in the non-profit area.

Conversely, the role of the CFCS approaches is to devise a "fair share" policy that enhances free enterprise capacities and secures that important non-profit actors have easy acces to sustained financing from the wider business world. One example of this is our long-standing relationship with the Money Advisory Trust (National Debtline), which in 2010 raised 815,000 for free unbiased advisory services to the Trust.

Our new Citizens Advice strategy means that our offices receive some of the money CCCS gets from creditors when they direct customers to CCCS-managed DMPs (3.6-3.7). Individual indebtedness and its effects on people's life require a strategy answer, and the free market still represents the best place for economic regeneration, making CCCS the biggest and most highly regarded supplier.

As such, the free economy must be safeguarded and fostered, with partnership and a more effective mixture of supply chains to ensure that individuals receive the unbiased, neutral credit support they need.