10b tanguay credit and debt
TRANSCRIPT
Practices and Ethicof Budget Counselling
Charles TanguayUnion des consommateurs (Québec)
CI World Congress 2007Sydney
October 31 2007
Practices and Ethic of Budget Counselling
Presentation - Who are we?Presentation - Who are we?
CI World Congress, Sydney, October 31 2007
• Federation of 11 consumer groups from Québec;Federation of 11 consumer groups from Québec;• 10 Co-operative Associations for Family Economics 10 Co-operative Associations for Family Economics (ACEF);(ACEF);• Created during the 60’s specifically around the issue of Created during the 60’s specifically around the issue of credit and problematic indebtedness;credit and problematic indebtedness;• Philosophy of empowering consumers who face debt Philosophy of empowering consumers who face debt problems without judging them, considering they are not problems without judging them, considering they are not solely responsible of their situation.solely responsible of their situation.
Practices and Ethic of Budget Counselling
Situation in Canada - overviewSituation in Canada - overview
CI World Congress, Sydney, October 31 2007
• debts / available revenue: 70% to 115% debts / available revenue: 70% to 115% • saving rate near zerosaving rate near zero• explosion of the number of credit cardsexplosion of the number of credit cards• increasing insolvency problemsincreasing insolvency problems
Practices and Ethic of Budget Counselling
Situation in Canada - overviewSituation in Canada - overview
CI World Congress, Sydney, October 31 2007
• households are more and more tight financially households are more and more tight financially • credit is offered for many goods on salecredit is offered for many goods on sale• «Buy now, Pay later...»«Buy now, Pay later...»
CI World Congress, Sydney, October 31 2007
Practices and Ethic of Budget Counselling
Situation in Canada - overviewSituation in Canada - overview
CI World Congress, Sydney, October 31 2007
• banks say: no worries - increase assets balance the banks say: no worries - increase assets balance the increase of debtsincrease of debts• ...but, what if interest rates go up?...but, what if interest rates go up?• «Insolvancy vultures» are turning around«Insolvancy vultures» are turning around
Practices and Ethic of Budget Counselling
Different services for people in debtDifferent services for people in debt
CI World Congress, Sydney, October 31 2007
Credit Counselling scandal in the USA
«Some credit counselling organizations have been accused of using aggressive and abusive marketing practices, misusing their non-profit status, charging consumers excessive fees, and paying excessively high salary to executives.»
- US Senate
Practices and Ethic of Budget Counselling
Different services for people in debtDifferent services for people in debt
CI World Congress, Sydney, October 31 2007
Canada - no regulation on credit counselling services
• trustees• «financial redressers»• non profit organizations
- Credit Counselling Services- ACEF
Practices and Ethic of Budget Counselling
Different approachesDifferent approaches
CI World Congress, Sydney, October 31 2007
«Creditors friendly» : Consumers must be responsible and pay their debts
Social worker approach:co-responsibility - the consumer do not control all factors; creditors, merchants, publicity also share responsibility - paying debts comes after paying basic needs
Practices and Ethic of Budget Counselling
Different approachesDifferent approaches
CI World Congress, Sydney, October 31 2007
Who is paying for the service?
Credit Counselling: debt poolling with $ return (%) from creditors
ACEF:Charity organization and governmental grants - no tie with creditors
Practices and Ethic of Budget Counselling
Budget counselling in the ACEFsBudget counselling in the ACEFs
CI World Congress, Sydney, October 31 2007
Free service
Multi-disciplinary skills • budget and personnal finance• regulations on credit• solutions to insolvency - bankruptcy, consolidation, etc• fiscality - additional sources of income• psycho-social interventions• consumers protection laws and others
Practices and Ethic of Budget Counselling
Prevention work done by the ACEFsPrevention work done by the ACEFs
CI World Congress, Sydney, October 31 2007
• budget lessons• budgeting and personnal finance tools• budgeting and personnal finance software• campaigns on rational uses of credit• lobby for better regulations
Practices and Ethic of Budget Counselling
Food for thoughtsFood for thoughts
Easy access to creditEasy access to creditCSR of creditorCSR of creditorCosts for the society: bankruptcies, health, ...Costs for the society: bankruptcies, health, ...
Do we need a regulatory frame on credit offers and Do we need a regulatory frame on credit offers and publicity such as the ones for alcohol, tobacco and publicity such as the ones for alcohol, tobacco and gambling ?gambling ?
CI World Congress, Sydney, October 31 2007
Practices and Ethic of Budget Counselling
How the credit counselling services How the credit counselling services look like in your country ?look like in your country ?
CI World Congress, Sydney, October 31 2007
Practices and Ethic of Budget Counselling
MerciMerciThank youThank you
GraciasGracias
[email protected]@consommateur.qc.ca
CI World Congress, Sydney, October 31 2007