Proposed Legislation Targets Debt Companies

The Provincial Government is set to introduce legislation that would set boundaries on debt settlement companies.
If passed, it would ban companies from charging upfront fees and require transparent contracts.
Frank Fabiano is a local Trustee in Bankruptcy with Grant Thorton Limited.
He says the idea behind these companies is a person could pay $500 and the agency will save up money for the next two or three years, then make a deal with the creditors.
Fabiano says these companies are pretty much scamming the public, and says he has dealt with a lot of people in the region who come to him in tears because they’ve invested so much money and don’t see any results.
In addition, Fabiano says the problem with a lot of these companies is that they don’t have the power to deal with all of the creditors, the same problems the individual runs into as well.
If passed, the legislation would ban companies from charging upfront fees, limit the amount of fees consumers are charged, require transparent contracts, establish a 10-day cooling off period which would allow customers more time to consider their agreements and allow the licenses of non-compliance companies to be revoked.
Fabiano says many of these companies who promise to erase all your debt aren’t monitored by the government, and that if you see something that’s too good to be true, it probably is.