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Why Canada must enshrine consumer rights
around debt

Your Right to KnowIt’s your right to know. Consumer rights ensure people obtain accurate and unbiased information and that they are not mistreated. Additionally, being informed on individual rights increases overall economic welfare and societal health. Especially by bolstering demand for such openness and encouraging industries to make ethical progress.

Your Right to Know

In the consumer debt space, access to unbiased, confidential options is essential. Most find it hard to open-up about their finances. Even more may lack the courage to ask for help when they need it. Despite a recent drop in the household debt-to-income ratio and a decline in consumer insolvencies, Canada is a heavily indebted nation.  A reality that won’t change any time soon.

Focus on Financial Wellness

A recent study conducted for Credit Counselling Canada addressed issues around consumer debt. It found that Canadians struggle with an industry that lacks ethics, transparency and accessibility to trusted debt services. The greatest challenge those surveyed faced in seeking debt assistance was a lack of focus on financial wellness and education (72 per cent). A similar number (70 per cent) cited a lack of transparency around fees, conflict of interest and a lack of transparency around organization’s motives (69 per cent).

Greatest Challenges

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The poll also focused on what motivates people to get out of debt. It’s one of the oldest tropes in recovery, and a claim that’s been repeated for decades: you’ve got to hit “rock-bottom” before you can change course. Rock-bottom represents the point where a person’s life becomes so out of control that they have no choice but to seek help.

Strikingly, the study found nearly four-in-10 Canadians would have no idea where to turn when facing debt rock-bottom themselves.

There is major work that needs to be done to increase awareness of consumer rights around debt and debt relief. On a positive front, Canada is making meaningful steps in the right direction.

The Financial Consumer Agency of Canada has renewed its Consumer Protection Advisory Committee, seeking to strengthen financial literacy and ensure appropriate regulations are in place. Nevertheless, much more can be done. That’s why we have introduced a Bill of Rights for Canadians in Debt that explains what you should expect from a reputable debt relief program.

Knowing Where to Begin

The fact is many people in debt aren’t sure where to start. Or where to get help.  The result, they can drift from year to year without a solid financial plan for the future.  The best thing you can if you’re in this situation is to pick up the phone and call a non-profit credit counsellor. This goes double if you find yourself drowning in debt.  An accredited and certified non-profit credit counsellors can help you develop a plan to get started. Learn how to get help from a certified non-profit counsellor near you.

 

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