Standards for private organizations

2020 Edition

Financial Education and Counseling Services (FEC) 12: Business Ethics

The organization accurately depicts services in marketing efforts and conducts activities in an ethical manner.
2020 Edition




Clients who receive Financial Education and Counseling services learn to solve financial problems and gain personal financial management skills.
All elements or requirements outlined in the standard are evident in practice, as indicated by full implementation of the practices outlined in the Practice Standards.
Practices are basically sound but there is room for improvement, as noted in the ratings for the Practice Standards; e.g.,
  • Minor inconsistencies and not yet fully developed practices are noted; however, these do not significantly impact service quality; or
  • Procedures need strengthening; or
  • With few exceptions, procedures are understood by staff and are being used; or
  • For the most part, established timeframes are met; or
  • Proper documentation is the norm and any issues with individual staff members are being addressed through performance evaluations and training; or
  • Active client participation occurs to a considerable extent.
Practice requires significant improvement, as noted in the ratings for the Practice Standards. Service quality or program functioning may be compromised; e.g.,
  • Procedures and/or case record documentation need significant strengthening; or
  • Procedures are not well-understood or used appropriately; or
  • Timeframes are often missed; or
  • Several client records are missing important information; or
  • Client participation is inconsistent. 
Implementation of the standard is minimal or there is no evidence of implementation at all, as noted in the ratings for the Practice Standards; e.g.,
  • No written procedures, or procedures are clearly inadequate or not being used; or 
  • Documentation is routinely incomplete and/or missing.      
Self-Study EvidenceOn-Site EvidenceOn-Site Activities
  • Sample marketing materials
  • Policy for using vendors as leads
  • Policy regarding financial incentives and penalties
  • Referral policy
  • Policy regarding client loans and debt
  • Media advertisements
  • Interviews may include:
    1. Program director
    2. Relevant personnel


FEC 12.01

The organization’s marketing efforts and written information:
  1. accurately describe the range of services and options available, including bankruptcy; 
  2. provide relevant contact information, including a current address, on all printed or electronic advertisements; and
  3. explain that receipt of financial education and counseling services does not guarantee participation in debt management program services.


FEC 12.02

An organization that uses a vendor to generate consumer leads does not provide incentives for such leads.


This standard requires that the organization does not base payment to the lead vendor on the number of leads generated. Such a practice may encourage lead vendors to generate leads using statements that do not accurately reflect the organization’s services.


The use of a locator service is permissible. These services connect an individual via telephone or a website with the nearest credit counseling organization based on the location of the person. There is a small fee each time a person is connected to pay for the locator services operation. According to 501q.1.f of the Internal Revenue Service code, 501c3 organizations cannot receive any amount of money for sending or receiving referrals for debt management plans.
NA The organization does not use a vendor to generate consumer leads.


FEC 12.03

The organization prohibits:
  1. financial incentives for counselors based solely on the number of DMPs established; and
  2. financial penalties for counselors when clients assume responsibility for debt management or leave the program.
NA The organization provides Housing Counseling and Education Services only.


FEC 12.04

The organization does not make or negotiate loans on behalf of its clients or purchase client debt.