Financial Consumer Agency of Canada issues Consumer Alert

Saying that “some companies offering help to pay off debt or repair credit are misleading consumers”, the Financial Consumer Agency of Canada (FCAC) has issued a consumer alert warning Canadians to be careful when looking for companies to help pay off debt or repair their credit.

The agency warns consumers that:

  • Companies or agencies can’t guarantee they will solve your debt problems
  • Companies or agencies can’t quickly and easily fix your credit score
  • Companies should not encourage you to take out a high-interest loan to pay off your debts
  • Companies or agencies may misrepresent services they offer as being part of a government program

The consumer alert provides details on these points, and goes on to say:

Before you sign up for any debt repayment program, we recommend that you do the following:

  • Get advice from different reputable sources such as a financial advisor, an accredited credit counsellor or a licensed insolvency trustee.
  • Ask questions, compare your options and make sure you understand what you are getting into.
  • When seeking information on insolvency options, ask the question “Are you a licensed insolvency trustee?”. Only a licensed insolvency trustee can provide access to options such as consumer proposals and bankruptcies.

You can read the detailed consumer alert here.  The alert also provides a number of resource links.