|Older Consumers Have Fewer Places to Turn to for Help|
This article appeared in the NCCC newsletter, dated January 2007.
Older consumers have been increasing their debt loads at a time of life when debt is especially burdensome and fraught with peril. While older consumers still tend to hold less credit card debt than younger consumers, the elders are catching up. Not surprisingly, elders are also filing bankruptcy in record numbers.
NCLC’s report, “The Life and Debt Cycle Part Two: Finding Help for Older Consumers with Credit Card Debt” includes original survey research on the types of programs and resources available to help older consumers with credit card debt. The reports were funded by a grant from the Retirement Research Foundation.
Part Two of the report includes a survey of state departments on Aging, Area Agencies on Aging, state AARP offices, and senior centers to evaluate the types of credit and debt-related services they offer. The report concludes that the elder assistance network does not offer much financial counseling assistance to elders beyond bill paying. Many refer elders to outside agencies. The top referral, by far, was to credit counseling agencies. This is striking given the serious problems with the credit counseling industry in recent years. It also indicates the potential for legitimate credit counseling agencies to help fill the gap in debt and credit assistance services for older consumers. The report contains recommended policy fixes to help develop comprehensive and effective programs.
“This report highlights the gaps in targeted assistance for older consumers with credit card debt” says the report’s co-author and NCLC staff attorney Deanne Loonin. “Because there is little margin for error with older populations, it is critical to help elders find effective assistance as early in the process as possible.”
The report includes an extensive survey of reputable credit counseling agencies to assess the types of services they offer and whether those services are targeted for older consumers.
The agencies in the survey reported that elders comprise a significant portion of their clients, an average of 20 percent. Eighty-seven percent of the survey respondents noted that these numbers have increased in the past five years.
The detailed policy recommendations in the report are aimed at improving the types of elder-focused services offered by the traditional elder assistance network and by credit counseling agencies. Further recommendations call on credit counseling agencies and creditors to expand the types of concessions and programs they offer to consumers in trouble, including principal reduction plans in certain circumstances. However, attempts to find out more about the programs offered directly by creditors were stymied by major creditors’ refusal to speak publicly about credit card loss mitigation policies.