In the book Psychology, theology, and spirituality in Christian Counseling, McMinn(1996) explains that the most important therapeutic uses of the Scripture include:  a) the fact that the Scripture (such as the Bible) addresses negative feelings and emotions by offering parables and examples of what happens to people when they succumb to those emotions. Take for example the stories of greed, and lust that you read in the Bible and how people get punished or suffer as a consequence of falling into temptations. Also, the scripture supports some forms of meditation techniques such as visualization, symbolism, the use of imagery, and prayer (decrees) as a way to mitigate negative emotions and embark the patient into a better emotional place. Scripture was mainly written to fill emotional and psychological gaps that sometimes we as individuals cannot resolve. This is why scripture and counseling can actually go very well together.

The problem (your second question) can result from attaching content of the scripture to religious groups and their practices. While Scripture is in itself pure and complex, the addition of "sect preferences" may ruin its intended work. When you mix the Word with human-made groups, you may be setting counseling to a bad form since what is created by men is not the same as something that is considered universally as "sacred". Making the scripture into a game of religion versus religion will alienate the patient and will scare patients into never even reading the scripture again. That is why it is so important to keep both separated and treat them as what they are: completely separate entities.  Therefore, the counselor needs to be specific in that the use of Scripture has a natural healing property as a book of advice, meditation, self-analysis, parable-telling, and for setting up examples of what good and erroneous behavior entails. It is not intended to bring the patient into a religious group, nor to adopt a sect mentality where he feels forces to think and believe and do as others do for the sake of feeling a part of something. That would actually be the anti-effect of using Scripture.