The Financial Consumer Agency of Canada (FCAC) is warning consumers who can no longer keep up with their debt payments to be cautious.
Some companies are misleading consumers by promising quick and easy solutions to help pay off their debt or repair their credit. In some cases, consumers may end up in a worse financial situation than before they got help.
It’s important to understand that these companies:
- cannot guarantee they will solve your debt problems
- cannot quickly and easily fix your credit score
- should not encourage you to take out a high-interest loan as a temporary solution until other repayment options are in place
Before signing up for help to repay debt or repair credit, consumers should:
- get advice from different reputable sources such as a financial advisor, an accredited credit counsellor or a licensed insolvency trustee
- ask questions and compare options
- never unwillingly submit to pressure to sign up on the spot
- read the fine print and understand the terms and conditions before signing a contract or an agreement
“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. 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.”
Jane Rooney, Financial Literacy Leader, Financial Consumer Agency of Canada