You may have noticed that every time you turn on the radio or television there is another advertisement for a debt settlement company making outlandish claims about how they can solve your debt problems with a quick fix for pennies on the dollar. There is a very good reason that Canadians are now being inundated with these ads – the U.S. Federal Trade Commission effectively shut down debt settlement companies across the United States. Now the only place for debt settlement companies to troll for victims is in Canada.
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“There is evidence of harmful practices used by some debt settlement companies and that is why our government is taking steps to protect consumers. We want to put a stop to abusive practices in the marketplace. Consumers should know their rights before they sign contracts and they should make no payments until they get results.” Margarett Best, Minister of Consumer Services.
There are over 20 debt settlement companies operating in Ontario and the Ontario Association of Credit Counselling Services receives over 100 complaints about debt settlement companies a month. Finally the Ontario government is responding to this very serious issue and is taking steps to regulate debt settlement companies. Alberta, Manitoba and Nova Scotia have already introduced regulations to crack down on them.
When something appears too good be true it usually is; and in the case of debt settlement companies their promises are always too good to be true. There is no instant or quick fix for serious debt issues. “Essentially, debt settlement companies have charged huge fees, sometimes in the thousands, made broken promises to settle debts for consumers and not followed through on their claims to be able to work with creditors,” wrote Laurie Campbell, CEO of the not-for-profit charity, Credit Canada Debt Solutions (CCDS) in a recent blog.
Beware of debt settlement companies that say:
- Their program is government approved. Not true; the government doesn’t approve debt settlement programs.
- They can stop collection calls and negotiate debt settlements. Not true; there is no legal protection for you if you choose to deal with a debt settlement company.
- They will negotiate with your creditors for pennies on the dollar. Not true; there is no guarantee that your creditors will negotiate with the debt settlement company, especially for pennies on the dollar. You may very well end up in a much worse position than where you started off from.
What can you do when you have debt issues to contend with? Deal with professionals. Contact Ira Smith Trustee & Receiver Inc. for sound, professional advice. We are federally regulated and licensed and subject to a strict code of ethics. Our fees are regulated by the Federal Government and are usually much less than the debt settlement companies who make unsubstantiated claims.
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