Laws in Ontario will Drive Most Credit Counsellors out of Business
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Laws in Ontario will Drive Most Credit Counsellors out of Business – Could This Benefit Me?
The Ontario Collection and Debt Settlement Services Act goes into effect on July 1, 2015.
It will dramatically change the way Debt Settlement Firms and Credit Counsellors do business.
Laws in Ontario will Drive Most Credit Counsellors out of Business and this could benefit consumers.
The purpose of the changes is to offer better protection to debtors.
The changes will impose old fashioned restrictions on the fees that can be charged and open up debt settlement to collection agencies.
The changes will also impose strict requirements as follows:
- Examination requirement;
- Must maintain a permanent place of business within the province open to the public during business hours;
- Surety bond requirement;
- Trust account requirement;
- Financial disclosure requirements;
- Record-keeping requirements;
- Licensing requirements for “collection agencies”, “branch offices”, and individual “collectors”;
These requirements will prevent many existing firm from providing debt settlement services to Ontario residents.
The only entities exempt from the Act are:
- Lawyers engaged in the private practice of law
- Bankruptcy trustees
- Non-profit credit counselling agencies (are expected to obtain an exemption at some future date)