With debt rising, the pressure and stress are rising as well. There are options and legitimate help… and there are also scams that take advantage of people in vulnerable and stressful situations.

The Competition Bureau and Consumer Protection BC provides some guidance:

1. Do your research. Find out which businesses are licensed and/or regulated. Insolvency Trustees are regulated by the federal government through the Office of the Superintendent of Bankruptcy (OSB). In Ontario, credit counselling agencies and debt settlement companies are regulated by the Ministry of Public and Business Service Delivery and Procurement. Non-profit credit counsellors are often members of Credit Counselling Canada or the Ontario Association of Credit Counselling Services.
2. See what others have to say. Look into what other consumers have to say about their experiences with a business. You can also check with the Better Business Bureau to see if any complaints have been filed against the company. https://www.bbb.org/
3. Don’t believe all testimonials. Businesses may use false or misleading testimonials from customers to promote their services.
4. Be cautious of any guarantee that your debt will be reduced. There is no guarantee that your creditors will accept your specific debt settlement proposal.
5. Be wary of any claim offering protection from your creditors. Your creditors may still take action to get their money back. Certified Credit Counsellors can negotiate with your creditors on your behalf and set up a legitimate Debt Consolidation Program (DCP) (This is different from a Consolidation Loan.). A consumer proposal or bankruptcy must be administered by a Licensed Insolvency Trustee to protect you legally from creditors.
6. Ask Questions. How does the proposed debt relief service work? How does it affect your credit report? Does it carry any potential financial risks or consequences? What are the fees?
7. Know the rules and get it in writing. Get a written contract with specific information, including fees to be paid and when they must be paid. By law, they cannot charge you up-front fees until you’ve agreed to the repayment proposal.
8. Read the fine print. Always read the terms and conditions before signing up. Ask questions about each line until you are confident you understand. Otherwise, you may find yourself paying for something you didn’t expect.
9. Be realistic. If the offer seems too good to be true, it probably is. Getting out of debt takes time and cannot be done quickly. Anyone who promises to help you get rid of debt quickly or improve your credit score within months may be scamming you.

Thank you, to the Competition Bureau of Canada, for the above information. Find out more at the link below.

https://www.canada.ca/en/competition-bureau/news/2018/02/debt_relief_promisestipsforchoosingadebtreliefservicethatkeepsit.html

If you want to talk about your debt and your options, reach out to our Financial Literacy Program.