The Financial Consumer Agency of Canada (FCAC) warns consumers to be cautious when looking for help to pay off debt.
In an announcement released April 5, FCAC warned that some companies are misleading consumers by promising quick and easy solutions to debt repayment or credit repair, and that in some cases consumers may end up in a worse financial situation by using these services.
No easy fix
FCAC underlines that such companies cannot guarantee to solve consumers’ debt problems, nor quickly and easily fix consumers’ credit score, and that they should not be offering temporary high-interest loans as a solution.
"It's important for consumers to understand what companies can and can't do when offering services to help with debt repayment or credit repair,” says Jane Rooney, financial literacy leader, FCAC, “The Financial Consumer Agency of Canada has information to help consumers better understand the types of services available to them and where to get help. Having the necessary information is the first step to empowering consumers to make informed decisions and meet their financial challenges head on."
Talk to an advisor
FCAC says consumers trying to pay off their debts should get advice from reputable sources, such as a financial advisor, an accredited counsellor, or a licensed insolvency trustee. In addition, they should ask questions and compare options and should not submit to pressure to sign up on the spot. It is also important to read the fine print and understand the terms and conditions before signing a contract or an agreement.