Family Financial Arrangements: Guarantees: Final Report

Guarantees of loans from financial institutions by a family member of the borrower can be problematic, especially if the guarantor is a vulnerable elderly person. The Commission recommends consumer protection measures to protect guarantors, including enhanced mandatory disclosure by financial institutions of the legal effects of guarantees.

Family Loans and Guarantees: Consultation Paper

This consultation paper investigates loans made by one family member to another,  and guarantees of loans obtained from financial institutions by a family member of the borrower.  Both are common, and are often ways in which a parent can help an adult child financially.  Unfortunately, both can also lead to misunderstanding. Potential problems are greatest if the lender or guarantor is a vulnerable elderly person. In such cases, the financial transaction may amount to elder abuse.