Beware of Imitations – Debt Consolidation Companies and You

It is very common, no matter where you go, to hear commercials or radio ads talking to you about debt. With consumer debt levels as high as they are in Canada, it comes as no surprise that many Canadians are looking for a way to help ease their financial worries by getting rid of some of that debt – and debt reduction or debt companies are offering this help. Unfortunately this umbrella term encompasses both those companies who genuinely want to assist you in getting your debt under control and those with less than virtuous objectives.  

Firstly, what is a debt consolidation company (or rather, the right kind of debt consolidation company)? A reputable company can help you get rid of your debt in a way that not only protects you, but helps you regain control of your debt. The possible solutions may include consolidating your debt, mortgage refinancing, bankruptcy or a consumer proposal – but whatever the solution, it should be based on your own unique situation. The company should not require full payment of a set amount before paying off creditors, and should not hold fast to only one type of debt reduction plan. 

When you struggle with debt, the last thing you need is someone taking advantage of that vulnerability. Thankfully, the Ontario government has stepped in to help reduce that likelihood. Earlier this year, the Ministry of Consumer Services took a step to help protect consumers from the unfair business practices of those companies claiming to offer debt relief services. This commitment included new rules put in place outlining appropriate and acceptable behaviour.

Here are a few of the rules that companies must adhere to:

-        No company may charge upfront fees

      -        Fees charged to consumers cannot go above a specified amount
      -        Contracts must be clear and easily understood
      -        Consumers must be given (and informed about) a 10-day ‘cooling-off’ period, during which they can consider the agreement and change their mind if so desired

Any company not complying with these new rules will have their license revoked.

 
All of this being said, there are still a number of companies out there that try to skirt the rules and remain persistent in their attempts to put their needs before yours. If you are looking for a debt consolidation company make sure you do your research and find one whose methods are going to actually help you achieve your goals.

For more information, or to speak to a professional debt consolidation company, please contact DebtCare Canada today at 1-888-890-0888.