Strengthening Rules for Debt Settlement Services
Ontario Government Increasing Protection for Consumers Seeking Financial Help
Ontario is taking steps to provide vulnerable consumers with protection against unfair business practices of some companies that offer debt settlement services.
As part of the province's continuing commitment to strengthen consumer protection, the Ontario government intends to introduce legislation that, if passed, would impose new rules for debt settlement services, including:
- Banning companies from charging upfront fees for debt settlement services
- Limiting the total amount of fees consumers are charged
- Requiring clear, easy-to-understand contracts
- Establishing a 10-day cooling-off period, providing consumers more time to consider their agreements
- Allowing the licences of non-compliant companies to be revoked
These proposed reforms would help protect the rights of consumers and are part of the new Ontario government's commitment to building a strong economy and a fair, safe and informed marketplace.
- Ontario is joining other provinces like Alberta and Manitoba that regulated companies offering debt settlement services.
- There are currently 22 companies and 38 credit counselling providers offering debt settlement services in Ontario.
- The average consumer debt in Ontario is more than $25,000 per person.
“Ontario consumers need to have confidence that they’re getting what they pay for when purchasing debt settlement services. We’re going to introduce legislation that would protect some of our most vulnerable consumers from being taken advantage of, at a time when they need the most help.”
“Ontarians work hard for their money. Why just give it away to a company that is going to take your upfront fee but not actually settle with your creditors? I’m pleased the Ontario government is strengthening protections for consumers looking for help from debt settlement companies.”