Consumer Protection In The News

Consumer groups faced off with the for-profit debt-counseling industry at a hearing yesterday before House lawmakers on legislation that would allow such companies to be licensed in the state.

Maryland now allows only nonprofit firms to help consumers with deep debts to manage their finances and improve their credit. A Columbia-based company, AscendOne, which does business in 35 states, has lobbied lawmakers for two years to support its efforts to operate in Maryland. The company's business practices are being investigated by several state attorneys general, including Maryland's.

The bill's House sponsor, Del. Brian J. Feldman (D-Montgomery), said the company and other for-profit debt counselors are unnecessarily being held to a higher standard than some nonprofit firms whose licenses have been revoked by the Internal Revenue Service because they were actually operating as for-profits.

But consumer groups, including the Maryland Public Interest Research Group and the Maryland Consumer Rights Coalition, said for-profit firms have little motivation to help consumers and a large incentive to profit from their troubles.

The Senate approved the bill last week. In past years, it has stalled in the House Economic Matters Committee, which held yesterday's hearing. Chairman Dereck E. Davis (D-Prince George's) said he plans to bring it to a vote this week or next.