Some might argue it’s about time, but the province is finally delivering on a promise to regulate the debt settlement industry.
Justice Minister Suzanne Anton announced this week that, effective next spring, changes to the Business Practices and Consumer Protection Act will go into effect.
She adds, often under the current system, debtors were left in poorer position than they were when they started, and these new regulations will help people in debt understand their rights — and also ensure they don’t get taken advantage of during a vulnerable period in their lives.
Under the regulatory changes, if a debtor needs 90 days or longer to repay the debt, companies can only charge up to 15 per cent of that total amount, and they will no longer be able to charge debtors an upfront fee.
The Minister says British Columbians need to be confident that when making tough monetary decisions, they’re getting the right advice, and with these changes in place these companies will have to be transparent about the risks associated with debt settlement.
To that end all contracts will be required to contain a disclosure statement indicating, that while the debt may go away, the debt settlement process will not improve credit ratings.
The government is delivering on a promise to regulate the industry, but it has taken it four years to do so.
The new rules will align with those already in place in other parts of the country, and according to Blair Mantin of Sands and Associates, Trustees in Bankruptcy, they just make sense.