I raise concerns about unethical marketing practices by bankruptcy trustees with another Ontario lawmaker: Jim McDonell, MPP

 

On Tuesday, November 3rd I had a meeting at the Ontario Legislature with Jim McDonell, MPP, (PC–Stormont–Dundas–South Glengarry).  He is the PC Critic for the all-important Ministry of Government and Consumer Services.  This ministry has a broad mandate involving provincial laws focusing on  consumer protection.

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Jim McDonell, MPP (Stormont–Dundas–South Glengarry) and I discuss a number of issues related to protecting the public from illegal and unethical behavior by those holding themselves out as assisting consumers struggling with consumer debt.

 

During our meeting I shared my concerns with Jim McDonell, MPP, about unethical marketing practices by bankruptcy trustees–in particular–inappropriate relationships with debt consultants.  Bankruptcy Trustees are regulated by the federal Superintendent of Bankruptcy in Ottawa and they are required to comply with the Code of Ethics for Trustees in Bankruptcy.

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I am specifically concerned about the number of bankruptcy trustees in Ontario that would appear to be contravening section 38 of the Code of Ethics for Trustees in Bankruptcy

Section 38 of the Code of Ethics for Bankruptcy Trustees reads as follows:

 

Trustees shall not assist, advise or encourage any person to engage in any conduct that the trustees know, or ought to know, is illegal or dishonest, in respect of the bankruptcy and insolvency process.

 

After researching the conduct of debt consultants over the past four months it appears clear that a substantial percentage of bankruptcy trustees in Ontario might be routinely and systematically violating section 38 of the Code of Ethics for Trustees in Bankruptcy.

We have used undercover operatives armed with hidden cameras

I plan on shining a light on this practice over the next few days, weeks, and months.  During this period we will be identifying those trustees whose relationships with certain debt consultants warrants a written complaint to the Superintendent of Bankruptcy.  As part of our research my firm has been sending undercover operatives to meet with selected debt consultants–armed with hidden cameras–as part of our research.  The results, quite frankly, have been disturbing.  I anticipate that some of this video footage will be shared with the public in some manner in the near future.

 

Enough is enough

It is about time that bankruptcy trustees–as a group–say enough is enough.  Unethical marketing practices by some–and definitely, not all trustees, is a plague on their house.  Simply put, the greed of some bankruptcy trustees is contributing to the moral debasement of bankruptcy trustees in Ontario. This is not the Ontario I want to live in.

Furthermore, lawmakers, consumer advocacy groups, and the media should “get in the game” as well.  It is time to identify the “bad actors”.  Regulators in particular should be paying attention.  If you are not going to do your job regulating the industry then people are going to start asking some very embarrassing questions.

Anyone engaging in illegal or unethical practices–including any trustees violating section 38 of the Code of Ethics–should be dealt with.  Failure to do so shows contempt for vulnerable people in our society, recent immigrants, seniors, students as well as those suffering debt problems arising from the loss of a job, breakdown of a relationship, or serious health problems.

 

Request for assistance from the public

If you have any information regarding an inapprropriate relationship between a debt consultant and a bankruptcy trustee then I would invite you to contact me at (866) 996-9941 or (519) 827-5513.  Alternatively, you can send me an e-mail at mark@comprehensivedebtsolutions.ca.

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We have a number of short videos and longer documentaries in the production stage.  We are also interested in sending our undercover operatives into additional locations.

Our firm announces new Video and Documentary Series on Consumer Debt

 

Over the past several months our firm has been conducting a significant amount of research into the collection industry as well as those holding themselves out as providing solutions to Canadians struggling with unsecured consumer debt.  Thanks to tips from a number of sources–including a number of my LinkedIn Connections whom I have never met–we are currently in the process of producing several videos and documentaries based upon our research.

 

Our photographer captures me revising some talking points before we shoot some footage for a video available on YouTube.  Photo courtesy of Emilie van Gent.

Our photographer captures me revising some talking points before we shoot some footage for a video available on YouTube. Photo courtesy of Emilie van Gent.

 

 

Earlier today our  firm recently sent out the following Press Release announcing some of the details in connection with our new video and documentary series.

 

For Immediate Release:

November 1, 2015

Consumer Advocate Announces New Documentary Series on Consumer Debt

Kitchener, Ontario–Comprehensive Debt Solutions Inc., will be rolling out a series of short videos and longer documentaries starting in November focusing on consumer debt.  “Some of these videos will emulate CBC Marketplace‘s investigative format and other videos will focus more on the ABC’s of financial literacy, with a special emphasis on consumer debt”, says Mark Silverthorn, former collection industry insider and Founder of Comprehensive Debt Solutions Inc.

The average Canadian is poorly informed concerning financial literacy–particularly as it relates to consumer debt.  In many provinces bill collectors run roughshod over consumers with overdue accounts.  In many instances, vulnerable individuals–senior citizens, recent immigrants, and students are particularly at risk.  Many Canadians, including those with university degrees, simply do not have a basic understanding of the various options that they have when they are experiencing significant challenges with debt.

Furthermore, there is a financially lucrative industry in Canada which provides services to consumers struggling with unsecured consumer debt.  According to Mark Silverthorn, “In many instances the moral gas gauge for these firms is running on empty”.  The industry is rife with conflicts of interest.  A significant number of firms are engaging in unethical and illegal practices.  In some cases the consumer is receiving questionable advice.  In other instances the consumer is simply being preyed upon.

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For further information:

Mark Silverthorn

Founder, Comprehensive Debt Solutions Inc.

Tel.:  (866) 996-9941   or   (519) 827-5513

e-mail:   mark@comprehensivedebtsolutions.ca

 

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I name unethical and illegal operators in consumer protection summit with Mike Colle, MPP

 

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This past week I drove from Kitchener to Toronto to the Ontario Legislature for a consumer protection summit meeting with Mike Colle, MPP (Lib. Eglinton-Lawrence)–a wide-ranging discussion regarding consumer protection issues facing Ontario residents.

 

A few weeks ago I received an e-mail from the office of Mike Colle, MPP, the sitting member of the Ontario Legislature for the Toronto riding of Eglinton-Lawrence.  The invitation indicated that this veteran Ontario lawmaker was interested in meeting with me at his office at Queen’s Park to discuss consumer debt.

We did meet a few days ago at the Ontario Legislature in Toronto.   During our meeting at his Queen’s Park office–literally a stone’s throw from the Legislature–we had a free-wheeling conversation focusing on consumer debt issues.  Mr. Colle shared with me some anecdotes regarding the credit reporting industry.  One of main topics of conversation were concerns I have raised over the past four months on this blog and in my LinkedIn posts regarding the conduct of those holding themselves out as helping consumers struggling with unsecured consumer debt.

During this meeting I provided Mike Colle, MPP, with the names of firms whose activities I believe warrant investigation by either the Ontario Registrar of Collection Agencies or the federal Superintendent of Bankruptcy.  I also provided Mr. Colle with some of the details of my firm’s four-month investigation into the post-July 1st regulatory regime for firms offering debt settlement services to Ontario residents.

 

Presentation of autographed copy of my book

At the end of our meeting I had the opportunity to provide Mike Colle, MPP, with an autographed copy of my book titled The Wolf At The Door:  What To Do When Collection Agencies Come Calling (2010), published by McClelland & Stewart.  This moment was captured for posterity in the photo, appearing below, taken by Mr. Colle’s assistant, Ms. Ashley Rensler.

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This past week I had the pleasure of meeting Mike Colle, MPP (Eglinton-Lawrence) at his Queen’s Park office and presenting him with an autographed copy of my book The Wolf At The Door:  What To Do When Collection Agencies Come Calling.

 

Future meetings with  lawmakers

I hope that my meeting this past week with Mike Colle, MPP, is not the last meeting where I have the opportunity to discuss my concerns regarding enforcement of the Ontario Collection and Debt Settlement Services Act with a member of the Ontario Legislature.  Earlier this year I reached out to several members of the Ontario Legislature with respect to my concerns regarding consumer protection. I can say that I am scheduled to meet with a second member of the Ontario Legislature in the next ten days.  My goal is to meet with a significant number of Ontario lawmakers to share my concerns regarding enforcement of Ontario’s consumer protection laws–in particular those relating to the conduct of collection agencies and firms offering debt settlement services.

In the future I would also like to schedule meetings with federal Members of Parliament at which time I can present them with some of the details of my inquiries with respect to the conduct of debt consultants–particularly in Ontario–and potential violations of the Code of Ethics for Bankruptcy Trustees.

Any lawmaker that is interested in scheduling a meeting with me is welcome to contact me by phone at (866) 996-9941 or (519) 827-5513 or via e-mail at mark@comprehensivedebtsolutions.ca.

 

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Over the next few days, weeks, and months, I hope to be able to present both Ontario and federal lawmakers with the names of firms–holding themselves as assisting consumers struggling with unsecured consumer debt–who should be investigated by regulators.

 

How prevalent is unethical marketing practices by Ontario bankruptcy trustees?

 

Over the past several months I have written numerous posts about firms offering debt settlement services to Ontario residents.  In several of these posts I have raised questions about whether some of these firms were acting in contravention of Ontario law.

During my research into debt settlement firms I stumbled across a much larger and insidious problem involving unethical marketing practices by some–but certainly not all–bankruptcy trustees in Ontario.  In Ontario today it is routine for many bankruptcy trustees to pay some form of referral fee or monetary compensation for referrals.  More specifically, these referral fees are being paid to a group that I will refer to as “debt consultants” most of whom advertise attractive results to consumers facing debt problems.

 

Who are these debt consultants?

Debt consultants are organizations–most of whom advertise on the internet–offering assistance to consumers struggling with unsecured consumer debt.  I would describe myself as a debt consultant.  Many debt consultants promise on their websites that they can eliminate 75 percent or 80 percent of a consumer’s debt under a federal government program.

Some debt consultants are independent financial advisors who provide quality advice to their clients at a reasonable price.  Other debt consultants provide services of limited value for exorbitant fees.  Finally, some debt consultants are little more than con artists.

Some of these debt consultants are heavily subsidized by a firm of bankruptcy trustees.  These shady debt consulting firms which hold themselves out as independent debt advisors are effectively exclusive marketing agents for one particular firm of bankruptcy trustees.  Reliable sources have told me that some bankruptcy firms pay the rent for a debt consulting firm in their community which serves as a referral funnel for them.  It is common knowledge among bankruptcy trustees in Ontario that some–but not all– trustees are paying anywhere between $1,000 and $1,500 for a referral from a debt consulting firm.

There are debt consultants who not only offer independent advice but also who do not receive referral fees.  Unfortunately, a significant percentage of debt consultants are nothing more than marketing fronts for unethical bankruptcy trustees.  If a trustee is paying a debt consultant $1,000 for a referral is a debt consultant going to tell a consumer that they don’t need a consumer proposal because Ontario’s 2-year statute of limitations has expired on their $45,000 worth of unsecured debt?

 

Unethical for trustees to offer financial benefit for a referral

Bankruptcy trustees in Canada are licensed by the federal government and their conduct is supervised by the Superintendent of Bankruptcy.  The conduct of bankruptcy trustees is governed by a document known as the Code of Conduct for Trustees in Bankruptcy.  Section 47 of this Code reads as follows:

Trustees shall not, directly or indirectly, pay to a third party a commission, compensation, or other benefit in order to obtain a professional engagement or accept, directly or indirectly from a third party, a commission, compensation or other benefit for referring work for a professional engagement.

 

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Payment for referrals is becoming a pandemic amongst trustees

It is becoming increasing evident to me that a significant percentage of bankruptcy trustees in Ontario today are violating section 47 of the Code of Conduct for Trustees in Bankruptcy on a regular basis.  I have no knowledge as to whether or not the Superintendent of Bankruptcy is aware of this problem which would appear to be a growing problem–particularly in Ontario.  It constitutes a growing pandemic amongst federally licensed bankruptcy trustees and a major intervention is required.

It is unfortunate that those bankruptcy trustees with a questionable moral compass are now sullying the reputation of all bankruptcy trustees.  I want to reiterate that many bankruptcy trustees do not offer any financial compensation when a file is referred to them.   I am reluctant to say that a few bad apples are the problem because I believe that it would not be accurate to describe the number of trustees contravening the Code of Ethics as “a few”.  It would be more accurate to say that a significant number of bankruptcy trustees in Ontario are engaging in unethical marketing practices in contravention of the Code of Conduct for Trustees in Bankruptcy.

 

Request for assistance from the public

I would ask that anyone who has information about an inappropriate relationship between a debt consultant and a bankruptcy trustee to contact me.  People who are in the know would include bankruptcy trustees, as well as current and former employees of bankruptcy firms and debt consulting firms.  Anyone with information is welcome to call me at (519) 827-5513 or (866) 996-9941.  Alternatively, you can contact me via e-mail at mark@comprehensivedebtsolutions.ca.  My goal is to bring this information to the attention of the Superintendent of Bankruptcy.

 

Anyone with information regarding an inappropriate realtionship between a debt consultant and a bankruptcy trustee is invited to contact Mark Silverthorn.

Anyone with information regarding an inappropriate relationship between a debt consultant and a bankruptcy trustee is invited to contact Mark Silverthorn.

 

This is not the last post on this blog on this issue!

 

 

What was the rationale behind my resignation as Senior Editor of Bankruptcy Canada Inc.?

I anticipate that by the end of 2015 that I will be contributing content concerning consumer debt to a growing number of websites.

I anticipate that by the end of 2015 that I will be contributing content concerning consumer debt to a growing number of websites.

 

For a period of 18 months –from June 1, 2014, to September 30, 2015–I had the opportunity to serve as the Senior Editor of Bankruptcy Canada Inc.  The firm’s website has been described as one of the two most popular bankruptcy-related websites in Canada.  During this 18-month period I contributed 60,000 words worth of articles on a variety of issues related to consumer debt.

On September 30, 2015, I tendered my resignation as Senior Editor of Bankruptcy Canada Inc. in order to devote more time to a number of exciting new initiatives.  I want to thank the ownership group at Bankruptcy Canada Inc. for giving me the opportunity to serve as Senior Editor of the firm’s website and I want to wish them success in the future.

Now I would like to share with you some of my new initiatves in the coming months.

 

Consumer Experience Audit work

There are a host of firms that offer professional services or offer services to consumers struggling with debt making a significant financial investment in not only the firm’s website but also on advertising.  Many of these firms end up wasting this money because the resulting consumer experience is lacking.

An example will help illustrate this.  Earlier this year my firm, Comprehensive Debt Solutions Inc., conducted a Consumer Experience Audit in a community on behalf of a bankruptcy trustee.  We arranged to have a mystery shopper request an interview with several bankruptcy trustees by completing an online request form found on the trustees’ websites. The results were a real eye-opener.  One national firm of bankruptcy trustees failed to book an appointment with our mystery shopper despite three online requests and one telephone call to the trustee’s office initiated by our mystery shopper.

Our mystery shopper then scheduled an appointment with any firm that was capable of scheduling an appointment.  We then looked at the consumer experience from the initial phone call with the trustee’s office to book the appointment to the actual appointment.  Some firms scheduled an appointment within two business days–others took more than ten days.  In one case our mystery shopper was 20 minutes late to an appointment because the trustee’s name could not be found on the digital directory in the lobby.  One trustee kept our mystery shopper waiting so long after the scheduled time for his appointment that he wanted to leave prior to the meeting–but remained solely because he was being paid to speak with the trustee.

Our mystery shopper surreptitiously made an audio recording of the meeting with each trustee.  Not surprisingly, despite the fact that our mystery shopper provided each trustee with identical facts regarding their debt situation, our mystery shopper received different advice.

Based upon our experience, prospective clients should be aware of red flags of a less than optimal service provider. If a prospective client does not receive a rapid response to an inquiry then that service provider might not give priority to client satisfaction, and the prospective client might be better served looking elsewhere.

 

New Blogging and ghostwriting opportunities

Over the past few weeks our firm has had a number of discussions with entities providing information or services to consumers experiencing debt problems.  The purpose of these discussions was to determine whether or not it was a good fit for me to provide content for their website or their social media campaigns.  In some instances, Danielle Lorimer, Comprehensive Debt Solutions Inc.’s Business Manager has arranged for me to  contribute a regular guest blog post for an organization.  In some other cases, she has arranged for me to ghostwrite content for an organization.

A few days ago I wrote my first blog post for moneyproblems.ca titled “Who Are These Bill Collectors Calling Me?”  I am scheduled to write my first blog post for shedthedebt.ca later this month.

Comprehensive Debt Solutions Inc.’s Business Manager, Danielle Lorimer, has informed me that there is a good chance that Comprehensive Debt Solutions Inc. will be entering into an agreement for either contributing blog posts or ghostwriting content for several organizations over the next few weeks and months.

 

Mark Silverthorn Blog and my LinkedIn posts

In February of this year I began publishing posts on both the Mark Silverthorn Blog and on Linkedin.  During the first few months these posts were on relatively mundane topics.  It was not very long, however, before some of these posts raised questions about the conduct of specific organizations.  Some of posts this summer involved significant inquiries–researching government records, taking photographs and screenshots from websites, the use of mystery shoppers, and obtaining copies of debt settlement agreements.

These posts which were investigative in nature began to generate some interest not only in the financial services industry but also in the media.  Over the past eight months the number of my LinkedIn Connections grew eightfold–from 330 to over 2,750.  The Mark Silverthorn Blog was referred to in an article dated August 1, 2015, written by journalist Sunny Freeman in Huffington Post Canada.  More recently, I wrote an article dated September 21, 2015, for the paper edition of the Law Times titled “Questions raside by deputy judge’s debt settlement activities”.

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Comprehensvedebtsolutions.ca to carry advertising

Our firm’s website, comprehensivedebtsolutions.ca, was launched in mid-February of this year.  Our marketing budget since February of this year has been zero.  If anyone would have asked me then if we would be carrying paid advertising for a national firm in October of this year I would have simply laughed.  The fact remains, however, that I anticipate that sometime this month advertising will appear on comprehensivedebtsolutions.ca.

This past week Danielle Lorimer, Business Manager, for Comprehensive Debt Solutions, informed me that our firm has entered into an agreement to carry advertising for Consumer Debtor Protection of Canada Ltd. on our firm’s website.  Yesterday, Danielle Lorimer, released the following statement on behalf of Comprehensive Debt Solutions.

 

PRESS  RELEASE

For immediate release:

October 2, 2015

Kitchener, Ontario:  “Comprehensive Debt Solutions, a firm focusing on assisting consumers struggling with consumer debt, will now offer advertising opportunities on our firm’s website.  We are pleased to announce that our first paid advertising client is Consumer Debtor Protection of Canada Ltd. (CDPCL),–cdpcl.com.” says Danielle Lorimer, Business Manager, Comprehensive Debt Solutions.  CDPCL is a firm that represents consumers across Canada seeking representation when they resolve their debt situation by way of a consumer proposal.  CDPCL’s goal is to assist their clients obtain the best possible terms when meeting with a bankruptcy trustee to make a consumer proposal.

Any inquiries regarding advertising opportunities on comprehensivedebtsolutions.ca should be directed to Danielle Lorimer, Business Manager, Comprehensive Debt Solutions Inc.

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For further information contact:

Danielle Lorimer

Tel. : (866) 996-9941          e-mail:  danielle@comprehensivedebtsolutions.ca

 

Mark Silverthorn serves the public

While I might write content for a number of websites, offer advice to other organizations, and our firm’s website will accept paid advertising–our integrity is paramount.  Our goal is never to let any issue distract us from serving the public. The fact that I contribute content to an organization’s website or that comprehensivedebtsolutions.ca accepts paid advertising from a particular firm should not be construed as an endorsement of that organization.

I make a commitment to those who read the Mark Silverthorn Blog or those reading content on comprehensivedebtsolutions.ca that our goal is to serve our readers, to provide accurate information, and to educate and inform you–our loyal readers.

 

My article appearing in Law Times raises questions about Ontario Deputy Judge’s firm offering debt settlement services

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This article appeared in the paper edition of the Law Times dated September 21, 2015.  It did not appear in the smaller digital version of the Law Times of the same date.

 

On September 21, 2015, the Law Times, a weekly publication for Ontario lawyers, ran an article I wrote titled “Questions raised about deputy judge’s debt settlement activity”, in the publication’s paper edition.   The URL for the Law Times is www.lawtimesnews.com.  This article does not appear in the September 21, 2015 digital edition of the Law Times.

The full text of this article can be found at the end of this post.

In this article I asked whether or not an Ontario Deputy Judge’s recent foray into the Ontario debt settlement marketplace will lower the public’s opinion towards both lawyers and judges in this province.

I also ask questions about the relationship between the unnamed deputy judge operating  Ontario Debt Law, OCCA, Quick Connect Solutions, and debthelpers.ca.

This article is based upon my post, dated August 16, 2015, published earlier this year on this blog, titled “OCCA helps Deputy Judge Serafini and Ontario Debt Law enter debt settlement marketplace”.

Here is the link to this post:

http://blog.comprehensivedebtsolutions.ca/2015/08/occa-helps-ontario-debt-law-enter-debt-settlement-marketplace/

 

Let us review your debt settlement agreement

If you are an Ontario resident and you have signed an agreement with any firm that offers to eliminate your unsecured consumer debt for less than what you currently owe then I would invite you to provide me with a copy of your agreement.

Depending upon your particular circumstances you might be entitled to a refund of the monies that you have paid to a debt settlement service provider.

You are welcome to call me at 1 (866) 996-9941 or (519) 827-5513.  Alternatively, you can contact me via e-mail at mark@comprehensivedebtsolutions.ca

You are welcome to call Mark Silverthorn if you are an Ontario resident and you have signed an agreement with a firm offering to eliminated your debt for less than what you currently owe.

You are welcome to call Mark Silverthorn if you are an Ontario resident and you have signed an agreement with a firm offering to eliminate your debt for less than what you currently owe.

 

Contact me if you have any information about the activities of Ontario Debt Law and OCCA

 

I would also invite anyone with knowledge of the activities of Ontario Debt Law and OCCA to contact me.

 

Text of my article appearing in the September 21, 2015, paper edition of the Law Times

 

This article reprinted below appeared in the September 21, 2015, paper edition of the Law Times.  The URL for the Law Times is www.lawtimesnews.com.

 

SPEAKER’S CORNER

Questions raised about deptuy judge’s debt settlement activity

BY MARK SILVERTHORN

For Law Times

 

Some time in July of this year, an Ontario deptuy judge who sits in the central west region launched a new law firm, Ontario Debt Law, that offers debt settlement services to Ontario residents.

The law firm’s debt settlement agreement states that it can assign the law firm’s obligations under the agreement to OCCA Consumer Debt Relief Inc.  Brampton, Ont.-based OCCA has been one of the largest Canadian debt settlement firms over the past decade.  In 2014, OCCA claimed to have more than 12,000 clients.

Ontario Debt Law has been carrying on business since the beginning of July.  It is becoming increasingly apparent that such activities may create issues not only for Ontario’s legal community but also for the administration of justice in this province.

A letter on Ontario Debt Debt Law letterhead states that an Ontario lawyer described as a deputy judge owns and operates the firm.  An unsophisticated individual reading this marketing letter might think that entering into an agreement for legal services with Ontario Debt Law might be very advantageous because the lawyer operating it is a deputy judge.  The reference to a deputy judge might lead a potential client to think to conclude that the courts or the Ministry of the Attorney General approve or recommend the firm’s services.

The entrance of Ontario Debt Law into the Ontario debt settlement marketplace coincides with the new debt settlement regulatory regime that came into effect on July 1st.  Effective July 1, whenever an Ontario resident enters into a debt settlement agreement, there are significant restrictions on the fees where the debt settlement service provider is subject to the Ontario Collection and Debt Settlement Services Act.

A debt settlement firm cannot charge a client a penny in fees until a settlement is actually paid out.  Furthermore, the maximum fee with respect to a single debt is 10 percent of the amount owing as of the date the debt settlement agreement was signed.

The new regulatory regime, and in particular the significant restrictions on fees, is having a devastating impact on firms providing debt settlement services to Ontario residents.  The new regulatory regime for debt settlement firms does not apply to lawyers who can bring themselves under an exemption contained in the act.  Accordingly, it is much more attractive financially to provided debt settlement services in conjunction with a law firm than to do so on its own.

A marketing letter on Ontario Debt Law’s letterhead sates: “We are NOT a debt settlement firm!”  It would be accurate to say that Ontario Debt Law is not a firm licensed as a collection agency under the Ontario Collection and Debt Settlement Services Act.  Ontario Debt Law does, however, offer services that fall within the definition of debt settlement services under the act.  There are also several confusing aspects to Ontario Debt Law’s letterhead.  The contact information, for example, is a mystery.  Several phone calls to the the local number on the law firm’s letterhead elicited a fax tone.  A phone call placed after regular business hours to the toll-free number listed on Ontario Debt Law’s letterhead led to a voicemail for a marketing firim called debthelpers.ca.

Ontario Debt Law’s letterhead states that its address is 188 Wilkinson Rd., Unit 2, Brampton, Ont.  On July 13, 2015,a photograph taken at that address reveals that the name on the door is not Ontario Debt Law but that of a Quick Connect Solutions.  A sign on the door at 188 Wilkinson Rd., Unit 2, advises Canada Post to deliver mail for that address to 188 Wilkinson Road, Unit 1.  That is the address for OCCA.

Quick Connect Solutions’ web site describes the firm as offering telephony solutions to companies in the marketing, credit, collections, and debt purchasing industries.  The we site for debthelpers.ca includes the following statement: “Each company we work with is unique and offers several different programs.  One size-fit-all approaches will never help you regain your financial stability and achieve your goal of becoming debt free.”

OCCA and Quick Connect Solutions. in fact, have attracted the attention of the of the Canadian Radio-television and Telecommunications Commission.  Following a CRTC investigation in 2013, OCCA and Quick Connect Solutions agreed to pay $69,000 and $11,000, respectively, in fines for making robocalls.

It is not easy for a member of the public to speak to a staff member at Ontario Debt Law.  Ontario Debt Law does not have a web site and would not appear to have much of a public presence at all.  A member of the public, however, will receive marketing materials from Ontario Debt Law after calling a toll-free number listed on OCCA’s web site and speaking with a counsellor.

A deputy judge’s recent entry into the Ontario debt settlement marketplace raises potential concerns.  It would be surprising if such activities were to enhance the public’s perception of either lawyers or judges.

 

Mark Silverthorn is a retired lawyer and the author of The Wolf At The Door:  What To Do When Collection Agencies Come Calling.  He is also the founder of Comprehensive Debt Solutions Inc., a firm providing practical advice to consumers with unsecured consumer debt problems.  Its web site is comprehensivedebtsolutions.ca

 

 

 

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.

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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 mark@comprehensivedebtsolutions.ca

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.

 

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When should we be concerned about the relationship between debt consultants and bankruptcy trustees?

I can empathize with a bankruptcy trustee who not only has to compete for revenues with other trustees but also credit counselling agencies and debt settlement firms.

I can empathize with a bankruptcy trustee who not only has to compete for revenues with other trustees but also credit counselling agencies and debt settlement firms.

 

I do not envy bankruptcy trustees. Firstly, they have to spend a significant amount of money to run a financially viable business. While they receive compensation for facilitating Canadians making a consumer proposal or filing for personal bankruptcy many trustees feel that it is necessary to spend substantial sums on advertising. A trustee is competing for revenues with not only other trustees but also credit counselling agencies—most of whom benefit from favourable tax status–and debt settlement firms.

Secondly, a trustee is at a competitive disadvantage in terms of the number of people who might pay for their services. A consumer wishing to enter into credit counselling or hire a debt settlement firm is not legally required to meet with them in person. In contrast, bankruptcy trustees must meet in person with a person considering making a consumer proposal or filing for personal bankruptcy. Therefore, a credit counselling firm or a debt settlement firm could operate across Canada from a single office. Because a bankruptcy trustee can only make a consumer proposal or file a bankruptcy on behalf of someone they have met in person then a trustee’s revenue base faces major geographic limitations.

Finally, no one wants to speak to a trustee. The last person a person struggling with debt wants to speak with is a bankruptcy trustee. Canadians would rather speak to anyone—and I literally mean anyone–advertising “Avoid Bankruptcy”. A consumer with financial problems is more likely to contact a debt consultant, a credit counselling agency, or a debt settlement firm before they contact a bankruptcy trustee.

 

Some debt consultants act as significant funnels of referrals to bankruptcy trustees

Bankruptcy trustees across the country employ a number of different strategies for inviting consumers to contact their office and learn more about the benefits of making a consumer proposal or filing for personal bankruptcy. It is common for many trustees to spend a substantial amount of money on traditional advertising. Many trustees spend a significant amount of money on their website and internet advertising. Finally, some, but not all, trustees may generate a sizeable number of files from referrals from debt consultants.

 

Diverse group of debt consultants operating in Canada

Debt consultants come in all shapes and sizes. They provide advice or services to consumers struggling with debt. Some consultants have one or more licenses. Other debt consultants are not licensed. I am a debt consultant.  I provide advice for a fee to consumers who are struggling with unsecured consumer debt. The largest debt consulting firm in Canada is Four Pillars which has approximately 50 offices across Canada.

There is nothing inherently inappropriate with a bankruptcy trustee having a relationship with a debt consultant that results in generating files for a bankruptcy trustee. In certain circumstances, however, a trustee’s relationship with a debt consultant can violate the Office of the Superintendent of Bankruptcy Canada’s Code of Ethics for Trustees in Bankruptcy. It is not fair that bankruptcy trustees who scrupulously comply with the Code of Ethics as it relates to debt consultants should be at competitive disadvantage vis-à-vis a trustee who has an improper relationship with a debt consultant.

 

Improper for trustees to provide compensation or benefits for referrals

It is a contravention of the Code of Ethics of Bankruptcy Trustees for a trustee to pay, directly or indirectly, a fee, compensation or a benefit in return for a referral.

 

Trustees shall not encourage anyone to engage in any conduct which is illegal or dishonest with respect to the bankruptcy and insolvency process

It is a contravention of the Code of Ethics of Bankruptcy Trustees for a trustee to “assist, advise or encourage” any person to engage in conduct which is illegal or dishonest in connection to the bankruptcy and insolvency process.

It would be fair to say that the majority of trustees in Canada do not engage in conduct which would come close to violating the Code of Ethics of Bankruptcy Trustees. Unfortunately, there are some bankruptcy firms whose conduct as it relates to debt consultants might constitute a violation of the Code of Ethics or warrant an investigation by the Office of the Superintendent of Bankruptcy.

 

Link to Code of Ethics of Bankruptcy Trustees

Here is a link to the website where you can read the Code of Ethics of Bankruptcy Trustees.

 

Contact Mark Silverthorn if you have information about inappropriate relationships between debt consultants and trustees

Anyone who has information about inappropriate relationships between debt consultants and bankruptcy trustees is welcome to contact me at (866) 996-9941 or (519) 827-5513.  Alternatively, you can contact me via e-mail at mark@comprehensivedebtsolutions.ca.

 

If you believe that you have information about an inappropriate relationship between a debt consultant and a bankruptcy trustee then you are invited to contact me.

If you believe that you have information about an inappropriate relationship between a debt consultant and a bankruptcy trustee then you are invited to contact me.

 

 

Game changer: Credit Counselling Society enters debt settlement marketplace

 

This weekend I was doing a google search for the phrase “debt settlement” and I ended up on a webpage for the Credit Counselling Society.   This organization, headquartered in New Westminster, British Columbia, is one of the four titans of the Canadian non-profit credit counselling industry.  This organization has offices in every province west of Quebec.  According to its website, www.nomoredebts.org, the firm has 22 offices across a large part of Canada.

I almost fell of my chair when I read their webpage titled DEBT SETTLEMENT IN CANADA/ PROGRAM OVERVIEW.  You can find this webpage reproduced below.

 

CCSDebtSettlementpage

 

 

DebtSettlementpagesecondfromtop

DebtSettlementpagebottom3or3

This webpage appears on www.nomoredebts.org, the website for Credit Counselling Society, one of the four largest non-profit credit counselling agencies in Canada.  Purple circle has been added.

 

 

Credit Counselling Society has the potential to become the largest provider of debt settlement services in Canada

Because of it substantial financial resources and its 22 offices across Canada Credit Counselling Society has the potential to become Canada’s dominanat debt settlement services provider.  Its advertising budget is greater than all of the other debt settlement service providers in Canada combined.

 

 

Creditors support non-profit credit counselling agencies offering Debt Management Plans

The creditor community likes non-profit credit counselling agencies because they are essentially warm and fuzzy collection agencies.  Non-profit credit counselling agencies assist Canadian creditors recover tens of millions of dollars each year.  When a consumer completes a Debt Management Plan with a non-profit credit counselling agency the major banks and credit card companies recover 80 percent to 90 percent of monies owing to them–depending upon the amount of the “fair share contribution” a particular creditor pays to a non-profit credit counselling agency.

 

 

The credtior community is not favourably disposed towards debt settlement service providers

The creditor community, however, does not like debt settlement service providers.  Debt settlement involves a consumer making a one-time lump sum settlement–for an amount signficantly less than the current balance owing–as settlement in full.  It is common for creditors to agree to settlements where the consumer pays anywhere between 20 percent and 50 percent of the outstanding balance.

 

 

Creditors would prefer non-profit credit counselling agencies restrict themselves to providing Debt Management Plans

The creditor community would prefer that non-profit credit counselling agencies stick to enrolling Canadian debtors in Debt Management Plans and recovering 80 to 90 percent of monies owing to creditors.  The creditor community does not look favourably on debt settlement service providers–of any type–because creditors are only recovering 20 to 50 percent of monies owing to creditors.

 

 

Creditor community may threaten to stop making “voluntary donations” to the Credit Counselling Society

I was surprised to see the Credit Counselling Society openly advertising the organization’s debt settlement services on its website because this could invite a devastating reaction from Canada’s creditor community.  The majority of Credit Counselling Society’s revenues come from Canada’s big banks and major credit card companies in the form of “fair share contributions”.

Frankly, I am going to be surprised if the creditor community does not threaten to stop making fair share contributions to the Credit Counselling Society if it does not immediately stop not only providing debt settlement services, but also offering debt settlement services.  The risk of the loss of fair share contributions from major Canadian creditors should give Scott Hannah, the President and CEO of the Credit Counselling Society, cause for concern.

 

 

Canada’s Big Four non-profit credit counselling agencies

The vast majority of Debt Management Plans in this country are done through four major firms, all of which are non-profit credit counselling agencies:

  • Credit Counselling Society
  • Credit Canada Debt Solutions
  • Consolidated Credit Counseling Services of Canada Inc.
  • Credit Counselling Services of Atlantic Canada Inc.

Debt Management Plans are financially lucrative to firms that provide them in large volumes.  These four firms all run high-volume Debt Management Plan operations. Furthermore, these firms all compete aggressively with one another for Debt Management Plan clients.  Finally, these four firms compete with bankruptcy trustees and firms that offer debt settlement services.

 

 

Possibibility that the other major non-profit credit counselling agencies may enter Canadian debt settlement marketplace

There is a real possibility that if the Credit Counselling Society is advertising its debt settlement services to Canadians six months from now that one or more of Canada’s largest non-profit credit counselling agencies will decide to follow suit.

 

 

Contact me if you have any information about a credit counselling agency offering debt settlement services

I would invite anyone with information about a credit counselling agency offering debt settlement services to contact me.  You are welcome to call me at (866) 996-9941 or at (519) 827-5513.  Alternatively, you are welcome to contact me, via e-mail, at mark@comprehensivedebtsolutions.ca

 

You are welcome to call Mark Silverthorn if you have any information about a credit counselling agency offering debt settlement services.

You are welcome to call Mark Silverthorn if you have any information about a credit counselling agency offering debt settlement services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Life Debt Solution: Debt settlement firm operating illegally in Ontario?

 

Last Friday I was returning home from a day at the CNE when my girlfriend noticed a sign on a traffic pole which read  “Are You In Debt? 905-783-1922”.  My girlfriend asked my daughter to take a photo of the sign with her cellphone.  This photograph can be found below.

AreyouinDebt

This photograph was taken on Friday, August 21st on Hurontario Street in Mississauga. 

 

My initial reaction was this sign was an ad for a debt settlement firm

On our drive home from the Port Credit Go Station to Kitchener we would pass literally hundreds of signs.  This was the only sign that we photographed on our drive home.  My girlfriend had the presence of mind to notice that this sign might have an interesting story behind it.  When I saw this sign my initial reaction was that it was an ad for a debt settlement firm.

 

Phone number belongs to firm called New Life Debt Solution

After returning home I googled (905) 783-1922 and I learned that it was the phone number for a Mississauga-based firm called New Life Debt Solution.  This firm’s website is www.newlifedebt.com.  According to the firm’s website the firm offers debt settlement services.

ServicesandSolutionstopofpage

This screenshot is taken from the top portion of New Life Debt Solution’s webpage titled SERVICES AND SOLUTIONS.  On this page the firm clearly states that it offers debt settlement services.

 

 

Three locations listed in Ontario

On the website’s LOCATIONS webpage three Ontario locations are listed.

Locations

According to its website, New Life Debt Solution is operating in Ontario, Quebec, Alberta, and British Columbia.

 

The firm’ website lists its Toronto location as 2898 Weston Road.  Earlier this week I had a meeting in the GTA.  At the conclusion of my meeting I drove to 2898 Weston Road to take a photograph of New Life Debt Solution’s Toronto office.  The photograph which appears below is a photograph of that address.

2898WestonRoadNewLifeDebtSolution

This is a photograph of 2898 Weston Road, the address listed as the Toronto location for New Life Debt Solution.

 

 

New Life Debt Solution does not possess an Ontario collection agency license

Under the Ontario Collection and Debt Settlement Services Act a firm cannot offer debt settlement services to Ontario residents unless it is licensed as a collection agency under the Act or it is exempt under the Act.  To the best of my knowledge New Life Debt Solution is not exempt under the Act.

Earlier this week I contacted the Ontario Government and I received written confirmation that New Life Debt Solution did not possess an Ontario collection agency license.

NewLifeDebtSolutionnotanONcollectionagency

This week the Ontario Government has provided me with written confirmation that New Life Debt Solution does not possess an Ontario collection agency license.

 

 

Mystery shopping call to New Life Debt Solution

At approximately 6:00 p.m. this evening one of my operatives called New Life Debt Solution’s toll free number, 1 (866) 210-9262.  This call was on speakerphone and I listened to the call and I made detailed notes during the call.

My operative–who I will simply refer to as Brenda–started this phone call by asking if she had reached New Life Debt Solution.  The man answering the phone replied yes.

At the beginning of the phone conversation the man clearly indicated that New Life Debt Solution offered debt settlement services.  Brenda stated that she owed $15,000 in unsecured consumer debt.

Based on my detailed notes taken during the phone call the following exchange took place concerning collection calls and the risk of being sued:

Brenda:  So I stop making payments to my creditors and I pay you instead?

Male:      Yes.

Brenda:  Will I get collection calls from creditors?

Male:      Absolutely not.  Collection calls will stop.  If anyone is trying to collect money from you the calls will stop immediately.

Brenda:  But what if they try and sue me?

Male:      Absolutely not.  We will protect you.  They cannot do anything.

Later in the call Brenda asked about how much it would cost her to hire New Life Debt Solution to provide debt settlement services for her.

Brenda:  Do you know what my payments would be to you for $15,000?

Male:     Approximately $100 per month.

Brenda: How many months?

Male:     60 months, 5 years, $100 per month for 60 months

Brenda: So $6,000 total?

Male:     Yes.

Near the end of this phone conversation Brenda asked the representative from New Life Debt Solution to e-mail her a copy of the firm’s debt settlement agreement which the representative declined to do.

 

Illegal for a debt settlement provider to charge fees prior to a settlement being paid out

Unless a debt settlement service provider is exempt from the Act, it is illegal for a debt settlement service provider to charge a penny in fees to an Ontario resident until such time that monies have been paid to a creditor under a settlement.  Accordingly, it would appear that New LIfe Debt Solution’s free structure contravenes the Ontario Collection and Debt Settlement Services Act.

Under the Act a consumer has the right to a 100 percent refund of any fees paid where the debt settlement service provider is in contravention of the Act.

 

 

New Life Debt Solution Inc. would appear to be a new player

Based upon a corporate search of New Life Debt Solution Inc., the company would apear to be a new entrant into the Canadian debt settlement marketplace.  According to a corporate search for New Life Debt Solution Inc. the firm was incorporated in British Columbia on June 23, 2015, about eight weeks ago.  The corporate search lists one director, Tahir Ahmad Malik.  The mailing address for the corporation is listed as 208-9200 120th Street, Surrey, British Columbia,  V3V 4B7.

The company’s website indicates that it has offices in Ontario, Quebec, British Columbia, and Alberta.

 

Complaint to be filed with the Ontario Government

Tomorrow I plan on filing a complaint with the Ontario Government against New Life Debt Solution.  It would appear that the firm is offering debt settlement services to Ontario residents in contravention of the Ontario Collection and Debt Settlement Services Act.

 

Contact me if you have paid any monies to New Life Debt Solution

I would invite anyone who has entered into a contract or given any money to New Life Debt Solution to call me at (866) 996-9941 or (519) 827-5513.  Alternatively, you can contact me via e-mail at mark@comprehensivedebtsolutions.ca.

If you are an Ontario resident and you have entered into a debt settlement agreement with CCDR then I would invite you to contact me.

If you are an Ontario resident and you have paid any monies to New Life Debt Solution I would invite you to contact me.