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.