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Jan 112012

Government issues warning about debt settlement companies  

Yesterday the Financial Consumer Agency of Canada (FCAC) released a consumer alert to Canadians about dealing with debt settlement companies to resolve financial problems, an issue we have been addressing in a number of recent blog posts

In the statement the FCAC warns Canadians "to be very cautious about companies that claim they can negotiate a deal to cut the amount of debt you must repay to your creditors. This process is often called debt reduction, debt settlement, debt relief or debt negotiation."

As professionals who also offer options to help Canadians take control of debt, we know our opinion can come across as biased or self-serving so we are very happy to see the FCAC highlight this issue.  It's a positive step in helping develop greater transparency about the options that exist. Here are a few highlights from their statement:

FCAC's advice on things to watch out for:

  • Agressive, high pressure sales tactics
  • Claims they make about their ability to work with creditors to reduce your debts
  • Misleading information about protecting your credit rating
  • False claims about government approval

The FCAC also offers tips about what you can do to help protect yourself such as doing a background check, asking about upfront fees, understanding how they will deal with your creditors and the impact it may have on you legally. 

If you are looking for information on options to help with debt, visit the FCAC website or check out our information on a do it yourself plan, credit counselling, debt management plans, consumer proposals and as a last resort, filing for bankruptcy.​

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