Amendments aimed at restricting debt settlement agencies were brought to legislation yesterday by the BC government, hopefully to be effective in the fall of 2015. Debt settlement companies currently typically offer to negotiate lump-sum settlements with a person’s creditors, often requiring the consumer to pay excessive upfront fees that are non-refundable. If passed, the legislative changes will prohibit these agencies from charging fees until both the individual debtor and the creditors have approved the debt repayment agreement.
Debt settlement organizations gained media attention in recent years, as Sands & Associates Vice-President and licensed Trustee Blair Mantin has shared with notable media outlets, including The Globe & Mail, The Vancouver Sun, CTV and Global News. With limited government regulation, debt relief agencies aggressively targeted in-debt consumers who were unaware of both the nature of these agencies and the lack of protection of their consumer rights. In 2013 Mantin noted that he had seen a spike of more than 2,000 per cent in calls about debt settlement over a two year period. Since 2010 Consumer Protection BC received an exponential increase in calls and complaints about debt settlement companies, leading them to highlight the issue of debt settlement companies to the government.
While the proposed legislation changes are arriving too late for some, if approved, the amended regulations will afford further protection for British Columbians carrying unmanageable debts.
To read the full news release please click here.
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