As consumer debt has grown over the past generation, so too has the debt settlement industry. In return for a fee for their services, debt settlement companies offer to negotiate a settlement of consumers' debts at a reduced amount on the debt owed. Significant concerns have been raised as to how some of these companies have conducted their businesses and the fees they have charged their clients. There have been many incidents of companies charging clients an up-front fee but providing the client with no tangible results. The indebted client is then further in debt. On January 4, 2013, the Ontario Ministry of Consumer Services announced that Ontario intends to regulate debt settlement companies to protect consumers.

The proposed regulation is modelled after measures taken to regulate the debt settlement industry in the United States as well as in other provinces such as Alberta, Manitoba and Nova Scotia. Highlights include:

i. prohibiting the advance payment of fees for debt settlement services;

ii. limiting fees which may be charged for debt settlement services – in the case of for-profit companies the limit proposed is 10% of the consumer debt owed;

iii. requiring that any consumer funds which are deposited for the purpose of debt settlement remain under consumer control;

iv. granting consumers a 10 day "cooling off"  right;

v. disclosure requirements to ensure consumers entering these types of agreements are aware of their rights; and

vi. advertising regulations for debt settlement companies.

Similar legislation in other provinces provides for the licensing of debt settlement companies, regulation of trust accounts, required record-keeping and the prohibition of certain practices by debt settlement companies related to fee-collection, bringing actions for breach of contract against consumers, and lending money to debtors.

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