Buyer Beware

Debt solution alternatives can hurt your membership.

 
 

Bills piling up? Creditors calling day and night? Considering bankruptcy?  If your members can answer “yes” to any of these questions, then they need their credit union, not the bankruptcy alternatives advertised on TV.

In a video posted on the New York Times, Peter S. Goodman reports on the downside of enlisting the “help” of debt consolidators and alternative financial solutions (click here to watch The New Poor: Unsettled Anxieties). These services make a good pitch, but do you want your members or potential members who are experiencing financial difficulty to turn to less-than-trustworthy debt settlement companies when faced with additional financial strain? Look for warning signs of a member in financial distress — overdrawn accounts, late payments, etc. — and reach out with assistance. Financial education and budgeting resources are likely a better solution for members wanting to regain control of their financial future.

Especially during the holiday season, credit unions can reinforce positive budgeting and spending habits among their membership. That might be just the right message at the right time for members in financial crisis.