In addition to combating high inflation and soaring interest rates, Canadians facing financial difficulty are also facing a new issue: becoming the target of debt relief scams. According to the Office of the Superintendent of Bankruptcy, these scams are on the rise, and they’re preying on vulnerable Canadians in debt.
Here are five red flags to watch out for:
- Unrealistic Promises and Pressure Tactics: Debt advisors may make big promises of eliminating your debt without understanding your unique financial situation. Be cautious of those pressuring you to make quick decisions without exploring all available options.
- Upfront Fees and False Claims: Watch out for advisors requesting payment before providing a service or falsely claiming they can secure a “better deal” with your creditors. Non-profit Credit counsellors and Licensed Insolvency Trustees typically offer free consultations with no upfront fees and adhere to legal and ethical standards.
- Hidden Fees Disguised as Referral or Administration Fees: Some scams may charge unnecessary fees under the guise of “referral” or “administration” fees. Consulting with a credit counsellor first, who doesn’t charge fees for referrals, ensures you receive accurate, unbiased advice tailored to your situation.
- Encouraging Communication Cut-Off with Creditors: Be wary of companies advising you to cease communication with creditors while claiming to negotiate on your behalf. Only those with legal authority, can negotiate binding agreements with creditors, legally stopping actions like collection calls.
- Online-Only Presence and Lack of Legitimate Information: Debt advisory firms operating solely online without a verifiable address, or in-person service availability may be suspect. Ensure you seek assistance from reputable sources with a physical presence in Canada. The Better Business Bureau is a great place to start.
In your journey to financial stability, it’s crucial to consult with trusted professionals. At SolveYourDebts.com, our accredited credit counsellors provide free consultations and ethical guidance tailored to your needs. Don’t let debt relief scams undermine your path to financial freedom. Contact us today for a free consultation and empower yourself with accurate and trustworthy financial advice.