Are you thinking about doing business with a debt settlement service merchant? The following informant may be of interest to you before you hire one.
Is the debt settlement service merchant with whom you are doing business required to hold a permit from the Office de la protection du consommateur?
Such a permit is mandatory if the merchant offers you either of the following services:
- negotiating a debt settlement with your creditors;
- receiving funds to be distributed to your creditors.
Importance of the permit
To be issued a permit, the merchant must provide a security to the Office. This is a sum of money that can be used to compensate you should the merchant fail to abide by his or her obligations. The Office would then use the security to provide this compensation.
How to check whether the merchant holds a permit
To check whether a merchant that is required to hold a permit from the Office actually holds such a permit, use the Get information about a merchant tool. You can also find out whether:
- the Office has intervened with this merchant;
- the merchant has received any formal demands from consumers.
The permit does not attest to the merchant's honesty or competency, nor does it suggest in any way that the Office recommends or approves the services offered. Among other things, the permit certifies that the merchant has provided a security to the Office.
Situations where a merchant is not required to hold a permit
A debt settlement service merchant is not required to hold a permit to offer:
- to improve your credit file (drawn up by companies such as Equifax and TransUnion);
- to provide you with education or raise your awareness regarding budget management or debt settlement.
Depending on the service or services they offer (among those described above), the following groups or individuals could not be debt settlement service merchants:
- organizations dedicated to protecting consumers;
- insolvency trustees;
- chartered professional accountants;
- educational institutions;
- chartered administrators;
- financial planners;
- liquidators of undeclared partnerships.
Are you entering into a distance contract with a debt settlement service merchant, for example by telephone or online? The merchant is required to provide certain information before you accept the offer.
To find out more, refer to the pages concerning:
The Consumer Protection Act and its attendant regulation set forth the requirements regarding the contents of a contract entered into with a debt settlement service merchant.
Before you sign, make sure your contract includes all of the required information. The Contents of a contract page presents all of this mandatory information. The clearer the agreement, the more you will avoid problems down the road. Also check whether the contents of the contract correspond to what the merchant has told you.
Certain organizations dedicated to protecting consumers offer budget consulting services free of charge. They can teach you how to plan and manage your budget, and give you advice on how to settle your debts.
To receive these services, contact your local Association coopérative d'économie familiale or consumer association. You will find the contact information for these organizations and a host of additional information on the Québec consumer association website Tout bien calculé (in French only).
Last update : February 28, 2023
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.