DEBT CONSOLIDATION MUST-KNOW

Ontario’s Liberal government recently announced a crackdown on debt-consolidation companies — particularly those who make promises of reducing debt and demand an upfront fee. The province is looking to catch up with Alberta, Nova Scotia and Manitoba, which all have stricter regulations. The government is evaluating a series of options, including a ban on upfront fees and stricter controls on advertising. In the meantime, Ontario’s Ministry of Consumer Services recommends people take the following steps to protect themselves:

Take your time. Make sure you understand all of the terms and conditions of service. Don’t be afraid to ask for extra time to read the contract over or more information.

Watch out for false claims. Claims that working with a settlement company will have no adverse effects on your credit rating are false, as are guarantees that your creditor will reduce your debts.

Know your rights. You have the right to be honestly informed. It’s against the law for contracts to be altered without your consent.

Look for certified credit counsellors. The Ontario Association of Credit Counselling Services and the Canadian Association of Credit Counselling Services are both nonprofit groups that provide accreditation to counselling services. Look for their seal or visit them online for more information.