CCCS Clients Get Windfall:
San Francisco Firm, With a Similar Name, Writes $30,000 Check
by Steven Oberbeck
The Salt Lake Tribune
January 11, 2005

A nonprofit San Francisco-based credit counseling organization has stepped forward to reimburse Utahns who lost money when the Consumer Credit Counseling Service of Utah (CCCS) failed last year.

BALANCE Financial, a subsidiary of Consumer Credit Counseling Service of San Francisco - an organization unrelated to the similarly named Utah service - has issued approximately $30,000 in checks ranging in value from $5 to $1,800 to 85 Utahns who contracted with CCCS of Utah to help them manage their finances, then saw their debts go unpaid.

In stepping forward, Balance's goal is to protect the CCCS name. The company is not acquiring any of CCCS of Utah's former accounts, although it is open to taking on new clients in Utah.

"We did see some harm to the CCCS name because of what happened in Utah," said Joanne Budde, president of Balance Financial. "We don't want consumers to think they can't trust the name Consumer Credit Counseling Service. We don't want one agency to destroy the trust we've developed, and the good reputation we've earned during the past 40 years."

Organizations that use the name "Consumer Credit Counseling Service" typically are members of the National Foundation for Credit Counseling. However, each service is independently operated and typically has no financial link with one another.

CCCS of Utah, which lost its affiliation with the National Foundation for Credit Counseling last year, was organized to help debt-strapped Utahns avoid bankruptcy by negotiating with their creditors for better repayment terms on their debts. The organization's clients sent monthly payments to the Utah organization, which put their money into a trust account before forwarding those payments to creditors.

Earlier this year, though, clients began to contact the state, alleging creditors were not receiving money they paid CCCS of Utah. In April, the state seized CCCS of Utah to investigate allegations that up to $64,000 was missing from a trust account set up to hold client money.

Although a 3rd District Court judge subsequently lifted the order that allowed the state to seize the company, CCCS of Utah closed a short time later.

Division of Consumer Protection Director Francine Giani said Budde voluntarily stepped forward offering to help.

"As far as I'm concerned, she came forward purely for altruistic reasons. She didn't want any publicity or even for us to include a pamphlet [about CCCS of San Francisco] along with the checks we were sending out," Giani said. "We had to twist her arm to get her to come to our press conference."

On Tuesday, Utah Department of Commerce Director Russell Skousen presented former CCCS of Utah client Pablo Gutierrez with a check for $1,800.

Another former CCCS client, Jim Carr, said he and his wife never expected "in our wildest dreams" to get the $538 they lost back. "It is unbelievable that they [CCCS of San Francisco] were willing to step forward like they did."

Giani estimates there still may be several hundred Utahns who are owed money as a result of CCCS of Utah's failure. They should contact the Utah Division of Consumer Protection for help in establishing their claims so they can get reimbursed.

The former president of the now-defunct CCCS of Utah, Scott McCagno, is appealing the $45,000 in fines handed down last year by the Division of Consumer Protection for his alleged mismanaging of the nonprofit debt counseling organization.

Prior to the failure of CCCS of Utah, the San Francisco organization already maintained a presence in Utah.

It provided credit counseling services to members of Mountain America and Golden West credit unions. The San Francisco organization, however, has since expanded its Utah presence and now serves the members of six additional Utah credit unions - Granite, Jordan, Cyprus, Alliance, Deseret First and Tooele Federal.

"No one has to be a credit union member to get our help," Budde said. "All anyone has to do is call us." Balance Financial's number if 800-808-4327.