10b Tanguay Credit and Debt

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10b Tanguay Credit and Debt

  1. 1. Practices and Ethic of Budget Counselling Charles Tanguay Union des consommateurs (Québec) CI World Congress 2007 Sydney October 31 2007
  2. 2. Practices and Ethic of Budget Counselling Presentation - Who are we? CI World Congress, Sydney, October 31 2007 <ul><li>Federation of 11 consumer groups from Québec; </li></ul><ul><li>10 Co-operative Associations for Family Economics (ACEF); </li></ul><ul><li>Created during the 60’s specifically around the issue of credit and problematic indebtedness; </li></ul><ul><li>Philosophy of empowering consumers who face debt problems without judging them, considering they are not solely responsible of their situation. </li></ul>
  3. 3. Practices and Ethic of Budget Counselling Situation in Canada - overview CI World Congress, Sydney, October 31 2007 <ul><li>debts / available revenue: 70% to 115% </li></ul><ul><li>saving rate near zero </li></ul><ul><li>explosion of the number of credit cards </li></ul><ul><li>increasing insolvency problems </li></ul>
  4. 4. Practices and Ethic of Budget Counselling Situation in Canada - overview CI World Congress, Sydney, October 31 2007 <ul><li>households are more and more tight financially </li></ul><ul><li>credit is offered for many goods on sale </li></ul><ul><li>«Buy now, Pay later...» </li></ul>
  5. 5. CI World Congress, Sydney, October 31 2007
  6. 6. Practices and Ethic of Budget Counselling Situation in Canada - overview CI World Congress, Sydney, October 31 2007 <ul><li>banks say: no worries - increase assets balance the increase of debts </li></ul><ul><li>...but, what if interest rates go up? </li></ul><ul><li>«Insolvancy vultures» are turning around </li></ul>
  7. 7. Practices and Ethic of Budget Counselling Different 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
  8. 8. Practices and Ethic of Budget Counselling Different services for people in debt CI World Congress, Sydney, October 31 2007 <ul><li>Canada - no regulation on credit counselling services </li></ul><ul><li>trustees </li></ul><ul><li>«financial redressers» </li></ul><ul><li>non profit organizations </li></ul><ul><li>- Credit Counselling Services </li></ul><ul><li>- ACEF </li></ul>
  9. 9. Practices and Ethic of Budget Counselling Different 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
  10. 10. Practices and Ethic of Budget Counselling Different 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
  11. 11. Practices and Ethic of Budget Counselling Budget counselling in the ACEFs CI World Congress, Sydney, October 31 2007 <ul><li>Free service </li></ul><ul><li>Multi-disciplinary skills </li></ul><ul><li>budget and personnal finance </li></ul><ul><li>regulations on credit </li></ul><ul><li>solutions to insolvency - bankruptcy, consolidation, etc </li></ul><ul><li>fiscality - additional sources of income </li></ul><ul><li>psycho-social interventions </li></ul><ul><li>consumers protection laws and others </li></ul>
  12. 12. Practices and Ethic of Budget Counselling Prevention work done by the ACEFs CI World Congress, Sydney, October 31 2007 <ul><li>budget lessons </li></ul><ul><li>budgeting and personnal finance tools </li></ul><ul><li>budgeting and personnal finance software </li></ul><ul><li>campaigns on rational uses of credit </li></ul><ul><li>lobby for better regulations </li></ul>
  13. 13. Practices and Ethic of Budget Counselling Food for thoughts Easy access to credit CSR of creditor Costs for the society: bankruptcies, health, ... Do we need a regulatory frame on credit offers and publicity such as the ones for alcohol, tobacco and gambling ? CI World Congress, Sydney, October 31 2007
  14. 14. Practices and Ethic of Budget Counselling How the credit counselling services look like in your country ? CI World Congress, Sydney, October 31 2007
  15. 15. Practices and Ethic of Budget Counselling Merci Thank you Gracias [email_address] CI World Congress, Sydney, October 31 2007

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