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The Credit Service Organizations Act regulates credit services organizations in New Hampshire. The state defines a credit services organization as “any person or entity who represents that he or she can or will sell or provide, for a fee, one or more of the following services for consumers:
- Improve a consumer's credit record, credit history or credit rating,
- Obtain an extension of credit for a consumer or
- Provide advice or assistance to a consumer related to the consumer's credit record, credit history or credit rating.”
In 1989, the Credit Service Organization Act went into effect, requiring that all debt settlement companies post a bond with New Hampshire Secretary of State before conducting business in New Hampshire. The act requires that the organizations provide detailed disclosures about their services, provide a written contract, and void any contract at the consumer’s request before the end of the fifth day after signing.
Questions You Should Ask
While there are many agencies that offer debt settlement services in New Hampshire, it is important to find the right fit for you. The NFCC recommends asking a lot of questions before signing a contract, including if the agency recommends that you stop paying your creditors, if it will be reported as “Paid by Settlement” on your credit report and what taxes on the forgiven debt you will be responsible for.
The Credit Service Organizations Act, RSA 359-D (CSO Act) regulates credit service organizations in New Hampshire. The New Hampshire Attorney General's office cautions: "If a business offers ‘counseling service’ to provide the consumer with credit (or help the consumer to obtain credit) to pay other creditors, it may be shading over into an advance fee loan offer subject to both the New Hampshire Consumer Protection Act and the federal Truth-in-Lending Act.”
Here Is How Credit Counseling Works
1. The New Hampshire Office of the Attorney General recommends residents use the Consumer Credit Counseling Service of New Hampshire and Vermont, which has offices throughout the state. All credit service organizations are required to post a bond with the New Hampshire Secretary of State.
2. Contact the organization and discuss their fee structure for credit counseling. Most agencies will work with you to establish a fee structure within your budget, and many will provide services free of charge when necessary. In New Hampshire, all credit services organizations must provide you with a written contract and written disclosures. If you sign a contract, you have until the fifth day to cancel without penalty.
3. Meet with your credit counselor and provide information about your financial situation. Your counselor may provide advice or recommend a financial management course. Another option is a Debt Management Plan. That is a formal agreement in which the agency negotiates with your lenders and pays them directly.
4. If the credit counseling agency does not follow the laws of New Hampshire or engages in unethical business practices, file a report with the New Hampshire Better Business Bureau and the New Hampshire Consumer Protection & Antitrust Bureau, which will take action against companies with multiple complaints. Be sure to include all documentation that you were provided in the complaint.
5. Follow the advice of your credit counselor and work to make lasting changes in your financial situation. Keep documentation of all credit counseling services and paperwork in case you need the information in the future.