OTTAWA (NEWS1130) – The Financial Consumer Agency of Canada has issued an alert on debt reduction companies. It is warning Canadians to be very cautious of companies claiming they can negotiate a deal with your creditors.

This process is often called “debt reduction,” “debt settlement,” “debt relief” or “debt negotiation” — but Executive Director Jeff Schwartz with the Consolidated Credit Counseling Services of Canada says consumers also need to be aware of companies that let you borrow against your home.

“Even pay-day loans – all of these opportunities come at a cost,” he says. “People wouldn’t be offering them if there wasn’t a significant cost to them. One thing that you want to make sure of is that you are reading the fine [print] before you get in to these obligations.”

He says you don’t want to lose your home.

“You don’t want to end up with a loan that is costing you over 30 per cent or even worse if you go to a pay-day loan it could cost you well over 60 per cent.”

He says when it comes to cash there is often no easy way.