posted Sep 16, 2015, 10:53 AM by EZvoip Co
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updated Oct 2, 2015, 2:30 PM
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Misbehaving collection agencies are one of the top complaints of customers. To determine what is "misbehaving" one has to be familiar with the legislation that governs such corporations. We cannot offer legal advice for individual cases, but we can provide our clients with a quick overview with online resources on this topic. A summary of what we could find, perusing the above sources can be found below (mostly from HuffPo): - Ontario Legislation came into force July 2015: Collection and Debt Settlement Services Act
- Companies providing debt settlement services in Ontario must be licensed under theAct, with the exception of not-for-profit credit counselling agencies acting as charitable foundations (as defined by the Canada Income Tax Act), bankruptcy trustees (who are already licensed by the federal government), and lawyers.
- fees will be capped under the new Act and up-front fees are prohibited. Debt settlement companies will only be able to charge a maximum amount of 15 per cent of payments (10 per cent for a lump sum) plus a $50 set-up charge and they will not be allowed to charge those fees until payments have been made to the creditor.
- According to the Canadian Bankers Association only 10 per cent of proposals received from debt settlement companies are accepted and 3% successfully completed.
- there is no provision legislating minimum requirements for education, training or codes of conduct. Bankruptcy trustees, licensed by the federal government under the Bankruptcy & Insolvency Act, must go through rigorous training and an extensive examination process before being licensed to provide debt relief services in Canada.
- it is unlikely that any new form of debt settlement company will be able, or willing, to provide complete advice to consumers looking for options to eliminate their debt. In almost all circumstances where an individual has significant debts, a consumer proposal remains a better debt settlement option over more informal debt settlement programs.
Once again, the above cannot be construed as legal advice. If in doubt, consult with a lawyer or paralegal. |
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