Do Debt Settlement Agencies Really Deliver? Global TV's 16x9 Investigates
Many debt settlement companies have been advertising that they can reduce the debt you owe - big time! But do they actually deliver? 16x9 investigates the industry and speaks to two men who say they never received what was advertised. 16x9 also turns to Scott Hannah, CEO of the Credit Counselling Society, to shed some light on some of these industry claims and practices and debunk some of their wildest claims. You can click here to watch 16x9's investigation into the debt settlement industry.
Additional Perspective - Not All Debt Settlement Companies are Failing to Deliver
While we definitely have some grave concerns about what is happening in the Canadian debt settlement industry, it's important not to throw out the baby with the bath water. There are some good companies out there who seem to be providing good debt settlement services to consumers. They will be the first ones to admit that a debt settlement is not for everyone. They are typically only appropriate for extreme circumstances and not for the vast majority of people.
In the clip below that 16x9 used as a preview for their show, Scott Hannah explains that not all debt settlement companies are over promising and under delivering. The important thing to look for is whether or not a debt settlement company is up front about what they can do for you and whether or not they are going to charge you large fees before actually doing any work. You can click here to watch the 16x9 extended interview clip.
How to Review Debt Settlement Companies in Canada or File a Complaint
With all of the advertising going on and all sorts of companies claiming to be able to help you the best, how are you to know who to trust. To make things simple, we would suggest narrowing your list to agencies who meet the following two criteria:
- They are an Accredited Member of the Better Business Bureau with their highest rating of A+.
- They don't charge large fees before providing their core service for their clients. No one should be paid anything more than a small processing fee unless they actually do some real work for you and actually solve some of your problems.
For a more extensive list of things to look for in a debt relief company, click here, or for a complete guide on how to review a debt settlement company yourself or file complaints, click here.
[Debt Settlement Company]
hi, I'm currently enrolled in a program with [a debt settlement company] and seen your program on global calgary. I had a gut feeling to not do this and try and pay my debt down on my own but got convinced that i would only have to pay 30 or 40% back which sounded to good to be true but continued with the program. It's been just about a year and nothing has been done rbc has sent there claim to a lawyer and we are getting sued for $90000. i was reassured that things will be ok by [the debt settlement company]* and since watching your show i know that it isn't going to be ok. I'm worried now and not sure what i can do i've given them close to $10000 and that could have been given to the bank. I have recently put your link on my facebook and hope others don't get suckered into this "scam"... What can i do to fix the error i made and trusted someone i didn't know?
* Moderator's Note: Until the allegations in this comment are substantiated we cannot post the name of the company.
Here’s What To Do
Thank you for sharing your experience. Unfortunately your situation is not unique; consumers across Canada have shared similar experiences as a result of contracting the services of a debt settlement company. In August of this year, the Ministry of Consumer Services in Ontario, reported in a consultation meeting that consumer complaints against debt settlement companies and practices were up over 100% from the previous year. The provinces of Alberta, Manitoba and now Nova Scotia have legislation in place that prohibits the practice of debt settlement companies charging a fee in advance of negotiating a settlement on behalf of a consumer. The provinces of BC, Ontario and NFLD are also looking into the deceptive practices of debt repayment/settlement companies. Here's what we recommend you do:
Submit a letter by fax to the debt settlement company in question and demand an immediate full return of your money and the reasons why as you have outlined in your comments above.
File a complaint with the respective Consumer Services / Consumer Protection Office in the province in which you reside and the applicable Better Business Bureau. If consumers remain silent, other consumers may fall victim to the same deceptive practices. If you are not sure how to go about this we will be happy to provide you with the appropriate contact information.
Contact our organization at 1-888-527-8999 and arrange to speak with one of our Counsellors. Please let our representative know that legal action has been initiated against you so that we can arrange an appointment with a Counsellor within 1 business day. Our Counsellors will work with you to determine the best course of action to help you resolve this difficult situation.
Contact RBC and the law firm representing RBC in your case and advise them what has transpired and that you have filed a complaint with the appropriate licensing body, and that you will be speaking with our organization to explore your options. We have a long standing relationship with RBC and other financial institutions and have in many cases been able to resolve debt settlement related problems to the satisfaction of all parties.
I also encourage you to contact a lawyer so that you have a full understanding of your legal obligations and the potential legal ramifications. Depending upon your situation you may or may not have legal recourse against the debt settlement company in question.