CCCS Customers Repaid: Those who lost money to credit agency get checks
by Dave Anderton
Deseret Morning News
January 12, 2005

At least 85 consumers across the Intermountain West who lost money to a now-defunct consumer credit counseling agency are getting their funds back.

On Tuesday, the Utah Division of Consumer Protection announced that BALANCE Financial Fitness Program, a private company, was disbursing nearly $30,000 in refund checks to individuals who lost money to Consumer Credit Counseling Service of Utah.

BALANCE Financial, a subsidiary of Consumer Credit Counseling Service of San Francisco, said the financial mismanagement by CCCS of Utah and the subsequent media fallout hurt the consumer credit counseling industry nationwide.

"It did hit the papers nationwide," said Joanne Budde, president of BALANCE Financial. "I didn't want the name tarnished. I didn't want people to think that they couldn't turn (to us) for help in the future."

Consumer Credit Counseling Service of San Francisco is unaffiliated with CCCS of Utah, but the two organizations shared membership in the National Foundation for Credit Counseling.

Pablo Gutierez of Midvale received a check for $1,200.

"The checks have ranged anywhere from $5 to $1,800," said Russell Skousen, Gov. Jon Huntsman Jr.'s nominee for director of the Utah Department of Commerce. "Mr. Gutierez just represents one of the many Utahns that have benefited from the generosity of BALANCE."

Luke and Andrea Smith of Salt Lake City got back $538, money that CCCS of Utah was supposed to use to make their car payments.

"We got a call from the bank that had our car loan saying they hadn't received a payment for two months," Andrea Smith said. "We were so grateful that we were able to get that money back."

Jim Carr of Salt Lake City received $528.

"I never in my wildest dreams expected to see the money again," Carr said. "This is a very fortuitous opportunity to come across."

In September, the Division of Consumer Protection fined Scott McCagno, the former president of CCCS of Utah, $45,000 and ordered him to cease and desist from operating a debt management company.

That decision is being appealed by McCagno to the Utah Department of Commerce.

According to the division, McCagno knowingly or intentionally received payments from consumers to pay their debts, but "either did not make timely payments on the consumer's behalf or made the payments with checks that were dishonored due to insufficient funds."

BALANCE Financial picks up its clients on a referral basis through credit unions. BALANCE Financial had been operating with two Utah credit unions before McCagno's business was shut down. Following the state's action, BALANCE picked up six more credit unions.

Roughly $64,000 in bounced checks by CCCS of Utah was tracked by state regulators. Francine Giani, director of the division, said several hundred people were affected by the mismanagement of CCCS of Utah. Consumers who made payments via CCCS of Utah to creditors, but never received credit for the payments, will be paid before other creditors.

Budde said that should CCCS of Utah not pay off the remaining consumers still owed money, BALANCE Financial may step forward again.

"We originally offered to make whole everybody who had lost money," Budde said. "We're hoping that this is a show of good will, and we're hoping that people won't be afraid to turn (to us) for help."

Consumers who lost money to CCCS of Utah can make a claim by calling the Division of Consumer Protection at 801-530-6601.