– Signs that you may be walking into a scam –
This past month, the Consumer Service Section of the Government of PEI announced that they will be seeking comment on the potential amendments to the Collection Agencies Act. The Collection Agencies Act regulates the acts of debt settlement companies, and works to protect the rights of you- the consumer. These proposed amendments come after much misleading and falsified activity from numerous debt settlement companies.
As the holidays draw near, and 2013 approaches, debt settlement companies are busier than ever advertising their services, which are often too good to be true! It is important to be cautious about companies that claim they can negotiate a deal to cut the amount of debt you must repay to your creditors. This process is often called “debt reduction,” “debt settlement,” “debt relief” or “debt negotiation.” (www. fcac-acfc.gc.ca).
Whilst new amendments to this Act will help protect vulnerable debt holders, it is important that you recognize any signs indicating a debt settlement company may have less than good intentions.
Where are they located? A genuine company should be able to provide you with their physical location, which should be local.
Are they calling you? Chances are, if the company is cold calling to get business they have another agenda which they are not sharing with you.
Are they only interested in credit card debt? A genuine debt settlement company will take into consideration all debts that you have accumulated, including mortgage, student loans, and credit card debt.
Are they unclear about money amounts? The company needs to be able to tell you exactly how much of your money is going to pay off your debts, and how much they will be charging as an administration fee.
Are they sending you a 10 page contract? The company needs to take time to explain all the clauses of the contract. If you receive a 10 page document with size 8 font be weary!
If you are considering engaging a debt reduction company please be sure to first contact the Government of PEI’s Consumer Services, an ethical and helpful source of assistance (1-800-658-1799).