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CNN Live At Daybreak
IRS Investigating Not-For-Profit Agencies
Aired October 14, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little more 'Business Buzz.' Some credit counseling agencies that claim they help people get out of financial trouble are now finding themselves in some hot water.
Carrie Lee has all the details from the Nasdaq market site in New York.
What a sad story.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well this is an area that hasn't really seen much regulation, Carol, but it could now. The IRS, the federal trade regulators and state regulators are all going to announce a rare joint warning today, this according to the "New York Times," telling consumers to be aware of the costs if you look for help from nonprofit or tax exempt credit counseling services. You have seen these ads probably on television, maybe in print.
This comes as the IRS is conducting an investigation into some of these nonprofit counseling agencies. These are agencies that advise people how to manage large amounts of debt. They have been gaining popularity. In fact, nine million people sought help from these agencies last year, and consumer advocates are now saying scrutiny and regulation are long overdue.
A lot of times these counselors will claim that by combining payments into one lower payment and lowering interest rates, they can help people get out of debt. But now regulators are looking at the fees consumers are charged for these services. Also, nonprofit officer salaries and other company transactions all being closely watched now. The IRS hasn't said which companies exactly it's investigating, but it did say it was a significant number.
And, Carol, if it's discovered that any of these companies are benefiting as for-profit companies do, then they could lose their nonprofit status, so never a bad thing for consumers when regulators take a look.
COSTELLO: Certainly so. Quick a look at the futures.
LEE: Things look pretty flat right now after pretty nice gains yesterday, not bad for the Columbus Day session. The Dow, the Nasdaq ending higher by just under 1 percent. The S&P up fractionally.
Clearly a lot of people today waiting for profit reports. We'll hear from J&J this morning, Intel after the bell. Also, watch Merrill Lynch and Bank of America. The two financial names coming out with profits before the opening bell, both expecting profits and sales to gain nicely over last year. We've seen a lot of stock market activity, always good for names like this -- Carol.
COSTELLO: Certainly. Thank you. Carrie Lee reporting live from the Nasdaq market site.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired October 14, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little more 'Business Buzz.' Some credit counseling agencies that claim they help people get out of financial trouble are now finding themselves in some hot water.
Carrie Lee has all the details from the Nasdaq market site in New York.
What a sad story.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well this is an area that hasn't really seen much regulation, Carol, but it could now. The IRS, the federal trade regulators and state regulators are all going to announce a rare joint warning today, this according to the "New York Times," telling consumers to be aware of the costs if you look for help from nonprofit or tax exempt credit counseling services. You have seen these ads probably on television, maybe in print.
This comes as the IRS is conducting an investigation into some of these nonprofit counseling agencies. These are agencies that advise people how to manage large amounts of debt. They have been gaining popularity. In fact, nine million people sought help from these agencies last year, and consumer advocates are now saying scrutiny and regulation are long overdue.
A lot of times these counselors will claim that by combining payments into one lower payment and lowering interest rates, they can help people get out of debt. But now regulators are looking at the fees consumers are charged for these services. Also, nonprofit officer salaries and other company transactions all being closely watched now. The IRS hasn't said which companies exactly it's investigating, but it did say it was a significant number.
And, Carol, if it's discovered that any of these companies are benefiting as for-profit companies do, then they could lose their nonprofit status, so never a bad thing for consumers when regulators take a look.
COSTELLO: Certainly so. Quick a look at the futures.
LEE: Things look pretty flat right now after pretty nice gains yesterday, not bad for the Columbus Day session. The Dow, the Nasdaq ending higher by just under 1 percent. The S&P up fractionally.
Clearly a lot of people today waiting for profit reports. We'll hear from J&J this morning, Intel after the bell. Also, watch Merrill Lynch and Bank of America. The two financial names coming out with profits before the opening bell, both expecting profits and sales to gain nicely over last year. We've seen a lot of stock market activity, always good for names like this -- Carol.
COSTELLO: Certainly. Thank you. Carrie Lee reporting live from the Nasdaq market site.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
