The Government of Ontario is thinking of establishing new protections for users of alternative financial services (AFS).
According to the government, AFSs are high-cost financial services outside of traditional financial institutions like banks and credit unions. For example, they include offerings like payday loans, instalment loans, lines of credit, and auto title loans.
Significantly, Credit Counselling Canada was invited to submit its ideas on strengthening protections for Ontario Consumers.
Imposing limits on the amount lenders can charge
Credit Counselling Canada was happy to weigh in with its suggestions for strengthening protections for Ontario consumers. We noted how research findings have highlighted the need for more vigorous regulatory enforcement of laws to safeguard vulnerable financial consumers. For instance, for many lower-income Canadians and increasingly middle-class borrowers, high-cost instalment loans have become a debt trap.
Critically, one important way to prevent harm to vulnerable consumers is by imposing limits on the amount which lenders can charge for the cost of borrowing. Furthermore, a fixed limit is easier to administer and more straightforward for consumers.
If you are facing a severe debt problem, we recommend that you call one of our member agencies today. They will offer you free, private, non-judgmental guidance from an accredited credit counsellor on the best way for you to deal with your debts. Let us help you find the right solution for your situation. After all, you have got nothing to lose by calling – except your debt.
For more information on the Ontario Ministry of Government and Consumer Services consultation process, see Alternative Financial Services.
