Complaints about debt advisers have soared more than 170 per cent, according to the Superintendent of Bankruptcy, which cites more awareness efforts alongside rising insolvencies for the increase.
Data from the Office of the Superintendent of Bankruptcy provided to The Globe and Mail showed that as of March 31, the number of complaints it received involving debt advisers has grown roughly 174 per cent, from 42 complaints in the fiscal year 2023-2024 to 115 in 2024-2025.
The number of complaints involving licensed insolvency trustees also grew roughly 16 per cent in the same time period, while the number of individual insolvency trustee licenses under professional conduct investigation doubled from 12 to 24.
“Increased awareness almost always leads to increased complaints,” said Superintendent of Bankruptcy Elisabeth Lang in an interview. She said her office has pushed for better knowledge of the issue through consumer alerts, ad campaigns and collaboration with provinces and regulators to combat misleading advertisements.
But she also said that some of the growth could be attributed to a continued spike in consumer insolvencies, which grew 4.6 per cent year over year in July across Canada and 8.8 per cent in Ontario.
As Canadians continue to struggle with debt in rising numbers, many debt advisers wield attractive offers. Through social-media and online ads, they promise to help ward off creditors and eliminate all or most dues.
But they’re not regulated or legally permitted to file consumer proposals – legal agreements to pay off debt – or bankruptcies.
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After charging clients hundreds or thousands of dollars in consultation fees, many often redirect them to an insolvency trustee, with whom they may or may not have an illegal referral partnership. Some debt advisers may even pose as licensed insolvency trustees themselves.
Complaints about debt advisers included claims that they could file a consumer proposal, charging fees for duplicate services already offered by insolvency trustees and falsely stating that they are licensed by the government.
In reality, a debt adviser can do little more than offer advice. But since there are no education or experience requirements tied to the role, anyone can claim to be one.
For the most part, “debt advisers can only make money if they can convince someone to file a consumer proposal with a licensed insolvency trustee,” said Doug Hoyes, an insolvency trustee and host of the Debt Free in 30 podcast.
Mr. Hoyes has advocated for cracking down on trustees as a way to stop predatory advisers. In 2022, debt advisers provided financial advice on approximately 22 per cent of consumer proposals, which are filed through insolvency trustees.
An insolvency trustee may benefit from a debt adviser’s referral because the latter is unregulated and can have free rein over what to say in ads, attracting indebted consumers who don’t know their options or who they need to speak to.
Ms. Lang said her office has been carrying out review audits of debt advisory relationships, which she said are at least partially behind the rising number of licensees under professional conduct investigations. “Those can lead to sanctions against the trustee’s license.”
However, Ms. Lang also said she hopes for the return of measures put forward under former prime minister Justin Trudeau.
In its last fall economic statement, Mr. Trudeau’s federal government proposed the introduction of civil remedies, such as damages and restitution, while boosting criminal fines roughly twenty-fold for unlicensed advisers and those pushing bankruptcy filings under Canada’s Bankruptcy and Insolvency Act. Penalties would rise to $100,000 from $5,000 for individuals and to $1-million for corporations.
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“We do hope that that can get reintroduced fairly soon,” said Ms. Lang, adding that the criminal consequences reflected “the seriousness of the problem,” while the addition of civil remedies would add a significant instrument in their toolkit.
“We can then go to court based on our own efforts and get the consequences, whereas in a criminal process you have to kind of rely on public prosecution services,” she said.
In an e-mail, Department of Finance spokesperson, Marie-France Faucher, did not say whether there were plans to reintroduce the Trudeau-era proposals but said further details would be presented “in due course,” including in a “comprehensive federal budget in October.”
While Mr. Hoyes said the efforts by the superintendent are a step in the right direction, he also sees debt advisers adapting and going “more underground.” He said many are no longer anchoring with one firm but moving around “like a pack of wolves,” rotating among licensed trustees to avoid detectable long-term ties.
The two main professionals helping Canadians struggling with mounting debt are licensed insolvency trustees and, to a different degree, credit counsellors.
Licensed insolvency trustees are federally regulated under the Bankruptcy and Insolvency Act and can help file consumer proposals or bankruptcy filings. They also generally offer free consultations.
Credit counsellors can offer a middle ground for people facing debt who are not necessarily at the stage of insolvency. The counsellors usually operate through non-profit organizations. However, it’s important to check that their agency is in good standing with a provincial or national association.
