Though some of these companies offer valuable services, many are known for their high pressure sales tactics, excessive fees and dubious methods for reducing your debt. Both the Manitoba Consumer Protection Office and the Financial Consumer Agency of Canada have issued warnings, cautioning consumers to think carefully before signing a contract with one of these services.
If you're thinking of using a debt settlement company, get informed and learn about the protection offered under the The Consumer Protection Act. Here are just a few of the regulations that can help protect you from unscrupulous companies:
- debt settlement agencies must be licensed
- no up-front charges are allowed
- maximum fees are set in regulations
- you can only be charged a fee if an agreement on reduced repayment is reached
- the maximum amount you can be charged for the service is 10 per cent of debt you owe
The Manitoba Consumer Protection Office can help you find financial counselling and support to manage your debt.