DEAR ABBY: I read your sound advice to "Addicted to Spending," the woman who racked up thousands of dollars in credit card debt. She said she couldn't sleep at night for fear her husband would divorce her when he found out. You were right that a credit counseling agency can provide valuable assistance, but she needs to be careful which one she selects.
The Internal Revenue Service oversees many credit counseling agencies because they are tax-exempt. We have received an increasing number of complaints that some of these agencies charge high fees, offer poor repayment plans, and provide little in the way of education and counseling.
We have stepped up our audits of credit counseling agencies and, where warranted, will revoke their tax exemption.
In addition, we have issued a consumer alert with the Federal Trade Commission and state regulators, warning consumers to check carefully before signing up with a particular program. A few tips:
(1) Beware of high fees or "voluntary" contributions.
(2) Carefully read any written statements before you sign, and make sure your creditors will work with the agency you want.
(3) Watch carefully the claims made in TV ads. -- MARK W. EVERSON, COMMISSIONER OF THE INTERNAL REVENUE SERVICE
DEAR COMMISSIONER EVERSON: I know my tax dollars are being well spent when the highest collection officer in the land reaches out to help people with money troubles. Everyone has heard the phrase, "Let the buyer beware." ("Caveat emptor.") However, it is especially discouraging to think that people who are vulnerable and trying to move their lives in a positive direction would be victimized by predators.
No doubt many readers will thank you for the warning. (Readers, you can find the IRS commissioner's alert by visiting the Web site: www.irs.gov/newsroom.)