Indebted consumers often receive poor financial advice from those holding themselves out as helping them


In 2010 my book The Wolf At The Door:  What To Do When Collection Agencies Come Calling (2010), published by McClelland & Stewart, was in bookstores across Canada. As part of the research for this book I mystery shopped about a dozen organizations in the Greater Toronto Area holding themselves as helping consumers with unsecured debt problems.  For lack of a better term I will refer to debt settlement firms, credit counselling agencies, debt consultants, and bankruptcy trustees as debt resolution service providers.

WATD(2)bookcover one column wide (1)


Response where limitation period was relevant

I provided my mystery shoppers with special pens that could surreptitioulsy record conversations.  I also provided my mystery shoppers with various scenarios to persent to debt resolution service providers.

One of the scenarios these mystery shoppers presented was that the date of last payment on all their unsecured consumer debts were more than three years ago.   I wanted to test these organizations’ response to a scenario where a consumer might be better off simply taking advantage of Ontario’s two-year limitation period for simple contract debt with respect to any unpaid unsecured consumer accounts.

An Ontario resident might have $60,000 in unsecured consumer debt in circumstances where the date of last payment on these debts was more than two years ago.  In this scenario, the consumer would have the option of not paying a nickel to their creditors.  The fact that an Ontario resident had an unpaid account, however, would show up on their credit report for seven years following the date of their last payment.

I was shocked when I listened to the recordings of these interviews.  As a general rule, the people who met with my mystery shoppers either had no idea about the significance of Ontario’s two-year statute of limitations, they denied its application to the mystery shopper’s particular situation, or they informed the mystery shopper that the fact that Ontario’s statute of limitations had expired was of no benefit whatsoever to their situation.


Free debt consultation or sales pitch? 

All of the organizations who were mystery shopped as part of my research for The Wolf At The Door offered a free consultation.  When I listened to the recordings provided by my mystery shoppers it was evident that the firm’s representative was highly motivated to encourage the mystery shopper to sign on the dotted line for a debt resolution option available from their organization.


A system that is broken


1.       A system that is rife with conflicts of interest

The debt resolution service provider industry has a huge problem. And that problem is conflicts of interest.  As a general rule, these organizations only offer one or two debt resolution options from the toolbox of the six to ten debt resolution options that might be available to a particular consumer.

When a consumer drowning in debt speaks with a representative from a debt settlement firm, a credit counselling agency, or a bankruptcy trustee that organization is very limited in terms of the range of solutions it can offer to the consumer.  It is only human nature for these organizations to put the debt resolution option offered by their firm in the best light possible.  These organizations only receive financial compensation if an individual decides to proceed using a service offered by that debt resolution service provider.


2.    A system where consumers often choose less-than-optimal solutions

Consumers who reach out to a debt resolution service provider are typically vulnerable individuals.  They may be facing major issues: missed bill payments, collection calls, lawsuits, and sometimes wage garnishments.  It is common for these individuals to sign up for a debt resolution option with the first organization they contact.  These consumers might not be aware that in some instances the person they are discussing a debt resolution option with is essentially a commissioned salesperson.

Two factors contribute to consumers choosing less than optimal debt resolution options.  Firstly, the average Canadian knows very little about debt resolution options.  Secondly, debt resolution service providers often sell their debt resolution option to the exclusion of other alternatives. This cocktail often results in a terrible hangover for the consumer:  a debt resolution option which is not optimal for the consumer in their particular circumstances.


More robust role for government and government regulators needed

Governments and government regulators should take a more active role in protecting vulnerable consumers from signing up for debt resolution options which might not be in the consumer’s best interests in a particular situation.  Firstly, government websites should offer detailed descriptions of various options available to a consumer.  These should not only be educational but also they should be balanced.  Secondly, before a consumer makes a financial commitment with respect ot a debt resolution option–a debt settlement agreement offered by a debt settlement firm, a debt management plan offered by a credit counselling agency or a consumer proposal or personal bankruptcy– they should be required to either read a government-approved document or watch a government- approved video describing the particular debt resolution option in detail as well as alternative debt resolution options.


At my firm Comprehensive Debt Solutions, we are not captive of a particular debt resolution option.  If you would like to learn more about your various options for dealing with your debt please feel fee to contact me.  You might find that paying a modest amount to speak to me for 15 to 30 minutes is the best money you ever spent in your life!  Feel free to contact our office to arrange a consultation.  You can call our office at 1 (866) 996-9941 or (519) 827-5513 or send me an e-mail at

You might want to contact our office and schedule a telephone consultation with Mark Silverthorn to learn more about your options for dealing with your current debt situation.

You might want to contact our office and schedule a telephone consultation with Mark Silverthorn to learn more about your options for dealing with your current debt situation.



Leave a Reply

Your email address will not be published. Required fields are marked *