Ontario bill targets debt settlement services
The Ontario government wants to rein in companies that offer to pay off consumer debts at a steep price.
A bill to be introduced at Queen's Park today would bring in new rules for debt-settlement agencies that promise to pay off clients' bills for pennies on the dollar.
A new bill would limit debt settlement agencies' fees in Ontario and ban the companies from charging customers up front.
Gail Vaz-Oxlade hosts the television show 'Til Debt Do Us Part, which helps couples work through their money problems.
She says many debt-settlement companies have been "getting away with murder," charging high fees to clients already facing financial problems.
"I get letters every single week from people asking ‘should I go to a debt settlement company?’ and my answer's always no," she said.
Richard Cooper runs the Markham-based company Total Debt Freedom. He says the company helps its customers get themselves debt free.
"We negotiate solutions for consumers looking to avoid bankruptcy," he said.
Cooper said the new legislation would hinder his company's ability to get people the best deal on their debt.
"Rather than getting 38 cents on the dollar like we are today likely it would probably foster an environment where we'd get 80 or 90 cents on the dollar for the consumer," he said.
If the bill passes, the Wynne government says companies that break the rules could lose their licence.