Cambridge Credit Counseling Review

My credit counseling service named Cambridge Credit Counseling receives money directly from the credit card companies. Can they work effectively for me or are they a scam?

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Bill's Answer: Answered by Daniel Cohen

Thank you for your question about Cambridge Credit Counseling, how credit counseling programs get paid, and whether a credit counseling service works for you or for the credit card companies.

Cambridge Credit Counseling went through a rough patch a few years ago, to put it mildly. During the time that Cambridge was operated under the leadership of its former principals, the Puccio brothers, complaints were lodged by Cambridge clients, the IRS, and state authorities, too.  Be sure to also check out the consumer reviews and all of the feedback on this debt management provider here:  Cambridge Credit Counseling Reviews.

The current management appears to have taken all the proper steps in order to re-establish Cambridge Credit as good player and has worked hard to overcome the concerns that led to several lawsuits and allegations that they are a scam type of firm.  There was a monitor appointed by the Commonwealth of Massachusetts to oversee Cambridge's progress. The monitor filed a report that demonstrated the efforts Cambridge made to address and fix the problems that occurred under the former ownership. Based on this report, I think Cambridge can now be considered a company that offers a good credit counseling program, but be sure to do your own due diligence, given historical problems at Cambridge Credit Counseling.

Fair Share

Your question asked if it is true that Cambridge Credit Counseling would get paid by your credit card issuers, were you to enroll in the Cambridge program. It is true that many credit counseling programs receive compensation directly from the credit card companies - this does not make them a scam, as you reference, but it certainly is a part of their business that can create a conflict of interest and something that potential clients of any credit counseling firm that receives compensation from the credit card companies needs to be aware of. One form of compensation is called 'fair share.'  Under 'fair share', credit card companies voluntarily return to the credit counseling agency a set percentage of the funds that are disbursed to them.  This is very typical in debt management programs administered by credit counseling firms.

To some, this looks like a conflict of interest and scam. "How can a  Consumer Credit Counseling Service (CCCS ) represent my best interests, if they are being paid by both me and by the credit card companies?" That seems like a reasonable question, but it misses a key point,. The proper questions to ask are, "Can a CCCS company help me?" and "Does the fact that CCCS programs receive fair share compensation directly from creditors prevent the CCCS from working to help me?"

While there are conflicts of interest, a good credit counseling firm, and Cambridge Credit Counseling may qualify in their current form, can still provide benefit.  The money that the Consumer Credit Counseling Service receives does not influence it to act in the creditors' interests instead of yours. It is my opinion that you should focus on whether or not the benefits of a CCCS will help you resolve your problem or whether there is another option that would be more effective.

CCCS firms attempt to lower your interest rates with your creditors. You make one monthly payment to the CCCS firm. They then distribute that payment to your various creditors. If the CCCS firm can obtain interest rate concessions from your lenders or creditors, more of your monthly payment goes to your principal balance, thereby speeding up the time it takes to become debt free. The bottom line is that the interest rates the CCCS can obtain will help you or won't help you; it is entirely separate from whether or not Cambridge Credit or any other credit counseling program receives any money from the creditors.

Compare Debt Resolution Options

You stated that you wanted to evaluate and compare your debt consolidation options. I think that is a very smart choice. Make sure to look at the pros and cons of each option, so you can find the one that has the greatest chance of helping you accomplish your goals.  First decide if credit counseling is the right solution for your needs, and then evaluate the best credit counseling firm to provide those services. Whether or not you decide to work with Cambridge Credit Counseling should depend on your own homework and due diligence.

VIDEO: Credit Counseling - What is Credit Counseling?

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Comments (8)


John H.
Springfield, MA  |  October 01, 2012
I was a client from 1997 to 2002. I struggled the whole time. I had trouble making the payments, and I missed some from time to time. They never let me down and they never abandoned me. They repeatedly called creditors to convey my situation and develop workarounds. It took 5 years, but I paid off all the debts my wife and I had. Within a year, I bought my first house. Cambridge helped me turn my financial life around, so thank you Cambridge!
Bills.com
October 01, 2012
Thanks for sharing your feedback John and congrats on your successful credit counseling journey!
Bart B.
Scottsdale, AZ  |  February 18, 2011
Wasn't cambridge credit counseling involved in some big lawsuits that had them involved in some consumer frauds? If they were really found guilty, why would anyone be dumb enough to pay them for debt services?
Bills.com
February 22, 2011
Cambridge Credit Counseling was involved in some lawsuits. The IRS and other government entities took actions against Cambridge. Still, as the answer to the original question stated, Cambridge Credit Counseling has new ownership and has taken steps to address all the complaints against it. I think that it is fair-minded to judge them on how they currently behave and the positive steps they have taken to address the past misconduct.
Tom M.
Cambridge, MA  |  February 14, 2011
My Mom used Cambridge Credit Counseling a few years ago and had nothing but trouble. I am glad to hear that their feet were held to the fire and that they have cleaned up their act.
Bills.com
February 14, 2011
Here is our link to the Cambridge Credit Counseling Review page at bills.com. Please ask your Mom to comment there, if she wants to share her feelings about her experience with Cambridge Credit Counseling.
Victor P.
February 13, 2011
I read your review of Cambridge Credit Counseling and I appreciate your input and all the consumer reviews. It just makes you wonder why people prey on consumers who need real money help. I sure do hope that you are right that they are no longer a scam and that they really do try to help people in need.
Bills.com
February 13, 2011
Thank you Victor. Here is our link to the Cambridge Credit Counseling Review. Be sure to comment there if you are a customer or if you have had direct experience, and we are happy that our review was beneficial. In short, however, they do appear to have turned their ship around and we do not assert that they are a scam. First, however, decide on what financial solution is best for you and then pick the provider; whether that is a debt consolidation loan, credit counseling, or debt resolution services.
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