Illinois sues Cambridge Credit Counseling
The state of Illinois is suing Cambridge Credit Counseling, both for apparent conflicts of interest and illegally high fees. Cambridge Credit Counseling is a debt management service. They assist with budgeting and discharging debt for their customers.
In the lawsuit, the Attorney General of Illinois says that Cambridge Credit Counseling has an inappropriate relationship with for-profit companies Brighton Credit and Brighton Debt. Gather.com reports: “Cambridge actually paid them to service debts instead of the for-profits paying Cambridge for directing business to them.”
The curious case of Cambridge Credit
I’m not sure why Cambridge paying the companies is somehow worse than if the Brighton companies had paid them. One can see why Brighton paying Cambridge would be a crime, but not the opposite. I am not an expert. You can look at the conflict of interest policy Cambridge Credit Counseling has on their website.
Another issue in the lawsuit is about startup fees. Illinois law prohibits companies like Cambridge Credit Counseling from charging over $ 50 in startup fees. However, Cambridge has been charging customers startup fees that are equivalent to their monthly credit card fees. Obviously, if someone is going to a credit counseling service, that is likely going to be a pretty hefty amount.
The future of Cambridge Credit Counseling
Cambridge Credit Counseling is a nationwide company, so it’s possible that more states could jump in on the lawsuit. So far, there hasn’t been word of anyone else joining in, but it probably isn’t far off.
The company has not yet made a statement about the suit. Cambridge Credit Counseling is the largest credit counselor in the nation. The lawsuit certainly won’t put the company out of business, but it could get it to change its policies, which is probably what the Illinois Attorney General is going for.
