Tag Archive for Doug Kariam

Are debt settlement clients of Ontario Debt Law entitled to a one hundred percent refund?

 

Very few Canadians will have ever heard of a debt settlement law firm by the name of Ontario Debt Law.  This debt settlement firm began carrying on business sometime around July of 2015.  I have yet to be able to identify a single employee of this firm.  It would appear that most of the tasks performed for Ontario Debt Law’s clients are done by employees of Ontario Consumer Credit Assistance Inc. (OCCA).

 

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Most of the tasks performed on behalf of Ontario Debt Law’s clients are carried out by employees of Ontario Consumer Credit Assistance Inc. (OCCA) at its office located at 188 Wilkinson Road in Brampton, Ontario.  This location is about 40 kilometers from the address listed for Ontario Debt Law on the firm’s website, www.ontariodebtlaw.ca, 447 Speers Road, Oakville, Ontario.

 

The other day someone asked me if a client of Ontario Debt Law, which would appear to provide no services other than “debt settlement services” as defined under the Ontario Collection and Debt Settlement Services Act, would be entitled to a one hundred percent refund of fees paid to the firm.  After researching this issue, in my opinion anyone who has become a debt settlement client of Ontario Debt Law since July 1, 2015, might be entitled to a hundred percent refund of fees paid to the firm.

A majority of Ontario Debt Law’s clients might be unaware that the contract that they have entered into with Ontario Debt Law is a debt settlement services agreement because Ontario Debt Law calls its debt settlement services agreement a Membership Agreement.  Some of Ontario Debt Law’s clients might also be under the impression that they are actually clients of OCCA because employees of OCCA would appear to perform the lion’s share of tasks associated with their debt settlements services agreement.

 

Ontario Debt Law’s nightmare scenario

If an Ontario judge, or the Ontario Government, were to take the position that Ontario Debt Law is not entitled to the “lawyer’s exemption” contained in paragraph 2(1)(a) of the Ontario Collection and Debt Settlement Services Act then Ontario Debt Law might find itself in for some significant difficulties.

 

Are you an Ontario Debt Law client who would like a full refund of fees paid to the firm?

Here is some food for thought for Ontario Debt Law’s clients and former clients. If you are interested in a refund of 100 percent of fees paid to Ontario Debt Law then you might want to consider sending them a written notice advising them that not only are you cancelling your debt settlement services agreement within one year of the date of the agreement but also you are demanding a refund of 100 percent of all fees paid to the firm.

In the event that Ontario Debt Law were to decline to provide you with a full refund within 15 days of receipt of your written notice of both cancellation and demand for a full refund then you do have a remedy available to you.  You can sue Ontario Debt Law pursuant to sections 16.10(1) and (2) of the Ontario Collection and Debt Settlement Services Act seeking an order awarding you repayment of your fees.  If your lawsuit were successful, in addition to awarding you repayment of your fees, and court costs, the trial judge has a statutory discretion to award you exemplary and punitive damages.

You might be saying to yourself that your cannot afford to sue a law firm to recover your fees.  I have news for you!  I can think of one or two dozen firms whom would be quite happy to pay all your legal expenses if you decided to sue Ontario Debt Law to recover fees paid to the law firm.  This group would include some collection agencies, some bankruptcy trustees, and potentially some credit counselling agencies.

 

Background information

On July 1, 2015, a new regulatory regime came into effect in Ontario that had a dramatic impact upon the entire debt settlement industry.  Beginning July 1, 2015, the Ontario Government imposed significant restrictions on the amount of fees that a debt settlement services provider could charge.  Firstly, a debt settlement provider could not charge a penny in fees until such time that a settlement actually took place.  Secondly, the amount of these fees was capped, not to exceed ten percent of the amount of the debt when the debt settlement services agreement was signed.

An example will help illustrate the new fee structure in place in Ontario as of July 1, 2015. If an Ontario resident signed a debt settlement agreement on July 2, 2015, and he had one outstanding credit card on which they owed $10,000.00 then the maximum fee which the debt settlement firm could charge its client would be $1,000.00, or ten percent of $10,000.00, the amount of debt on the date the debt settlement services agreement was signed.

These new restrictions on fees, together with a number of other onerous requirements on debt settlement service provider, encouraged many firms to leave the industry or reinvent themselves.  A substantial number of debt settlement firms ceased operating in Ontario because of the new regulatory regime.  A few debt settlement firms sought to avoid the new regulatory regime altogether–including its restrictive fee structure–by offering their services through a lawyer practising law in Ontario.

If you would like more background information about Ontario Debt Law and its Siamese-twin relationship with OCCA then you are welcome to read one of my earlier blog posts, dated August 16, 2015, and September 28, 2015 or my article appearing in the print edition of the Law Times on September 21, 2015.

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On September 21, 2015, the Law Times, a weekly newspaper for Ontario’s lawyer, carried a story I wrote titled “Speaker’s Corner:  Questions raised about deputy judge’s debt settlement activity.

 

What are the consequences if Ontario Debt Law were not able to bring itself within the “lawyer’s exemption” in the Ontario Collection and Debt Settlement Services Act?

As mentioned earlier, Ontario regulates firms providing debt settlement services to Ontario residents.  The relevant law is the Ontario Collection and Debt Settlement Services Act.  Any firm that provides debt settlement services to Ontario residents must be the holder of a valid Ontario collection agency license–except where it is exempt from this licensing requirement under subsection 2(1) of the Act.

The term “collection agency” is defined in subsection 1(1) of the Act as follows:

“collection agency” means

(a)    a person, other than a collector, who obtains or arranges for payment of money owing to another person or who holds himself out to the public as providing such a service,

(b)   any person who sells or offers to sell forms or letters represented to be a collection system or scheme, or

(c)   a person, other than a collector, who provides debt settlement services

 

If a judge in a civil lawsuit or the Ontario Registar of Collection Agencies–the senior civil servant responsible for enforcing the Act–were to take the position that Ontario Debt Law does not fall within the “lawyer’s exemption” in paragraph 2(1)(a) of the Act then Ontario Debt Law would be required to possess an Ontario collection agency license.

Such a finding would affect the viability of Ontario Debt Law’s current business model because the firm would face the prospect of all of its clients seeking a one hundred percent refund of their fees paid pursuant to their debt settlement services agreements.

If Ontario Debt Law cannot bring itself within the “lawyer’s exemption” then it is not entitled to charge a penny in fees to anyone entering into a contract for debt settlement services after June 30, 2015.  Paragraph 16.6(2) of the Ontario Collection and Debt Settlement Servies Act reads as follows:

A collection agency or collector that enters into a debt settlement services agreement before being registered shall not be entitled to receive any payment or security for payment under subsection (1) for debt settlement services provided under the agreement.

 

Why might Ontario Debt Law not fall within the “lawyer’s exemption” contained in paragraph 2(1)(1) of the Ontario Collection and Debt Settlement Services Act?

There are three distinct grounds upon which either a trial judge or the Ontario Registrar of Collection Agencies might base a decision that Ontario Debt Law does not fall within the “lawyer’s exemption” in the Act.

1       Mr. Serafini not providing services in the regular practice of his profession

Angelo Serafini’s law office is located in Oakville.  Mr. Serafini’s website for his Oakville law practice is www.serafinilaw.ca.  Nowhere on this website is there any reference to Ontario Debt Law–which according to e-mails sent out on behalf of Ontario Debt Law–is a law firm owned and operated by Angelo Serafini.  This website lists various practice areas–real estate, wills and estates, and business law.  There is no reference whatsoever on this website that would suggest that Angelo Serafini’s Oakville-based law firm offers debt settlement services.

serafinilawBioFeb72016

On the ABOUT US webpage on www.serafini.law, Mr. Serafini’s bio does not contain any reference whatsoever to Ontario Debt Law.

 

Angelo Serafini makes no reference to Ontario Debt Law on his LinkedIn Profile.

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Oakville Lawyer Angelo Serafini makes no reference whatsoever to Ontario Debt Law, a law firm he owns and operates, on his LinkedIn Profile.

 

In the second paragraph on one of the pages of Ontario Debt Law’s debt settlement services agreement–a document titled Membership Agreement–it states that any of Ontario Debt Law’s obligations under the contract can be performed by OCCA.

AssignmentClauseFirstPageODLMembershipAgrement

This clause found in Ontario Debt Law’s (ODL) debt settlement services agreement would appear to permit Ontario Debt Law to assign all of its contractual obligations pursuant to this agreement to Ontario Consumer Credit Assistance Inc. (OCCA), a firm whose Brampton office is located 40 kilometers from Angelo Serafini’s Oakville office.  Coloured highlights have been added.

 

OCCA’s Brampton office is located 40 kilometers from Mr. Serafini’s Oakville office.  To the best of my knowledge, there are no employees of Mr. Serafini’s Oakville-based law practice or Ontario Debt Law working at OCCA’s Brampton office.  Some people might ask what tasks–if any–are Mr. Serafini and his employees performing in connection with Ontario Debt Law’s debt settlement service agreements?

Is Ontario Debt Law providing services in the regular course of Mr. Serafini’s practice of law?

 

2      Amount of work performed by Angelo Serafini or “his employees”

The “lawyer’s exemption” in paragraph 2(1)(a) of the Ontario Collection and Debt Settlement Services Act reads as follows:

This Act does not apply to

(a)   a barrister and solicitor in ther regular practice of his profession or to his or her employees

Some people might ask what work, if any, pursuant to the debt settlement services agreements entered into by Ontario Debt Law, is being performed by either Angelo Serafini or “his employees”.

I obtained a better sense of the division of labour between Brampton-based Ontario Consumer Credit Assistance Inc. (OCCA) and Angelo Serafini and “his employees” after watching some video footage taken recently by a mystery shopper that visited OCCA’s Brampton office posing as an individual interested in becoming a client of Ontario Debt Law.

 

In December of 2015 a mystery shopper visited OCCA’s Brampton office at which time she sought clarification about the relationship between OCCA and Ontario Debt Law.

 

3      Disqualified because of the Act’s anti-avoidance provision?

Section 2.1 of the Ontario Collection and Debt Settlement Services Act contains an anti-avoidance provision which reads as follows:

In determining whether this Act applies to an entity or transaction, a court or Tribunal shall consider the real substance of the entity or transaction and in so doing disregard the outward form.

A trial judge might decide that Ontario Debt Law was created for the sole purpose of permitting Ontario Consumer Credit Assistance Inc. (OCCA) to avoid being licensed under the Ontario Collection and Debt Settlement Services Act and make a ruling that Ontario Debt Law is not exempt from the Act pursuant to paragraph 2(1)(a).

 

Contact Mark Silverthorn if you are a former or existing client of Ontario Debt Law

You are welcome to contact me if you are a current or former client of Ontario Debt Law.  You can call me at (519) 827-5513 or send me an e-mail at markasilverthorn@gmail.com.

 

Sample Cancellation/Demand for Refund letter

The letter which appears below can be used by anyone seeking a refund from a debt settlement firm in circumstances where (1) the debt settlement services agreement was entered into after June 30, 2015, and (2) the debt settlement firm is not licensed as a collection agency in Ontario nor is it exempt from the requirement of being licensed.

 

sample cancellation and refund demand letter

This is a sample letter which any Ontario resident can use to obtain a full refund of fees from an unlicensed collection agency.  For more information you are invited to contact me.

 

 

Copy of Ontario Debt Law’s debt settlement services agreement

 

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Complete Debt Solutions and the smoking gun

 

Those who follow the Mark Silverthorn Blog might recall that on June 22, 2015 I wrote a post titled “Complete Debt Solutions Operating in Canada Illegally?”  In that post I raised the question whether or not a firm based in Toronto, Ontario, carrying on business under the name Complete Debt Solutions was operating in one or more Canadian jurisdictions illegally as a debt settlement firm.

I became aware of the existence of Complete Debt Solutions after receiving a tip, from one of my hundreds of contacts, about the firm’s website, www.completedebtsolutions.ca.  A portion of the CONTACT page from this website is reproduced below.

 

This screenshot includes the bottom half of the CONTACT page on www.completedebtsolutions.ca.

This screenshot includes the bottom half of the CONTACT page on www.completedebtsolutions.ca.

 

 

Complete Debt Solutions is an Ontario-based debt settlement firm offering debt settlement services to Ontario residents

On its website Complete Debt Solutions lists its business address at 1075 Bay Street,  Suite 149, Toronto, Ontario.  I recently came into possession of 13 pages of material which Milton Kaseke, the principal of Complete Debt Solutions, e-mailed on or about June 22, 2015, to an Ontario resident making inquiries about the organization’s services. A redacted copy of the first page of these 13 pages is reproduced below (yellow highlights have been added for clarity).

YHREDP1CDScontract

On this page Milton Kaseke, who describes himself as a Senior Account Executive, confirms that “Complete Debt Solutions (C.D.S.) is a Debt Relief/Debt Settlement/Debt Negotiation and Credit Repair company located in Toronto Ontario Canada.”

 

 

Debt settlement providers require a collection agency licene

Subject to the following two exceptions, a firm must possess a license–typically a collection agency license (or a debt repayment agency license in Alberta)–in order to legally provide debt settlement services.

  1. a few Canadian provinces might not require a debt settlement provider to be licensed
  2. in some Canadian provinces and territories a law firm might be exempt from the requirement of obtaining a collection agency license

 

Complete Debt Solutions is not licensed in any province or territory as a collection agency

After I wrote my initial post on June 22, 2015, concerning the activities of Complete Debt Solutions I began making inquiries concerning the status of Complete Debt Solutions across the country.  I contacted, some, but not all, of the regulators in various provinces responsible for supervising the conduct of debt settlement service providers.  I was unable to identify a single province or territory where Complete Debt Solutions possessed a collection agency license.

You can imagine my surprise when on Friday, July 17, 2015, I received a phone call from Milton Kaseke, the principal of Complete Debt Solutions.  After advising me that he was not a fan of my June 22nd posts on both LinkedIn and the Mark Silverthorn Blog he confirmed that Complete Debt Solutions does not possess a collection agency license in a single province or territory in Canada.

 

E-mail from Milton Kaseke in which he states Complete Debt Solutions does not charge consumers for its services

On June 23, 2015 I received an e-mail from Milton Kaseke, the principal of Complete Debt Solutions.  In this e-mail Mr. Kaske states that “I haven’t taken any penny from anybody which means that I am not breaking the law (Collection and Debt Settlement Services Act of Ontario).”  This e-mail is reproduced below.

 

MiltonKasekeemailtoMS

Mr. Kaseke is correct when he says that a firm offering debt settlement services to Ontario residents does not need to possess a valid Ontario collection agency license if the firm is not receiving any compensation for its services.

The question that remains to be answered is whether or not Complete Debt Solutions and Milton Kaseke are offering debt settlement services to Ontario residents in circumstances where potential clients must pay a fee to Complete Debt Solutions.

 

Complete Debt Solutions would appear to be offering debt settlement services in return for financial compensation

As noted earlier, I recently came into possession of 13 pages of material that Milton Kaseke of Complete Debt Solutions e-mailed on or about June 22, 2015 to an Ontario resident inquiring about debt settlement services offered by the firm.  This material contains a 2-page contract for debt settlement services titled “Complete Debt Solutions Service Agreement”.  The first page of this document is reproduced below (yellow highlight has been added to some of the most pertinent portions of text).

 

YHP8topportionCDScontractBottomportinP8CDScontract

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According to the first page of this debt settlement agreement Complete Debt Solutions charges its clients an Administration Fee.  In the middle of the first page of this 2-page debt settlement agreement a potential client is advised that he is responsible for paying to Complete Debt Solutions an “Administration Fee equal to 13% (thirteen percent) of the Client’s total enrolled debt.”

 

Official complaint made to the Ontario Government on or about June 24th

About a month ago, after spending a signficant amount of time reviewing the content on Complete Debt Solutions’s website I thought it would be appropriate to ask the Ontario Government to make inquiries and determine whether or not Complete Debt Solutions was operating as an illegal debt settlement service provider in contravention of the Ontario Collection and Debt Settlement Services Act.  Accordingly, I wrote a letter dated June 22, 2015, to Doug Kariam, Ontario’s Acting Registrar of Collection Agencies, requesting that his office investigate the matter. The following day I completed and submitted the appropriate online Complaint Form used by the Ontario Ministry of Government and Consumer Services.

The Ontario Ministry of Government and Consumer Services refuses to process a complaint against a business unless a consumer first writes a letter of complaint directly to the business in question.  Some people might think that this requirement is not only bad policy but also a direliction of the Ontario Registrar of Collection Agencies’ statutory duty to enforce the Ontario Collection and Debt Settlement Services Act.  In order to satisfy this “written notice requirement” I sent an e-mail to Milton Kaseke of Complete Debt Solutions on June 23, 2015, a copy of which is reproduced below.

 

June232015EmailMStoMScomplete

 

Furthermore, I forwarded copies of my letter to Doug Kariam to several of his counterparts in a number of provinces across the country.  I asked them to make inquiries to determine whether or not the activities of Complete Debt Solutions warranted an investigation in their province to determine if the law regulating debt settlement firms was being contravened.

On Friday, July 17, 2015, I sent an e-mail to Doug Kariam, Ontario’s Acting Registrar of Collection Agencies.  In that e-mail I provided a copy of the 13 pages of material that Milton Kaseke e-mailed to an Ontario resident on or about June 22, 2015, which I refer to in this post.  You can read a redacted copy–with the name of the consumer removed–of this material, in its entirety, at the end of this post.

I am not privy to what action the office of the Ontario Registrar of Collection Agencies has taken to date in response to my official complaint regarding the activities of both Complete Debt Solutions and its principal, Mr. Milton Kaseke.  Nor am I privy to the actions which might be currently underway in other provinces as a result of my communications with Doug Kariam’s counterparts in other provinces.  I would hope that my complaint receives the attention that is warranted under the circumstances.

 

Contact Mark Silverthorn if you have recevied a debt settlement agreement from Complete Debt Solutions

If you have received a debt settlement agreement from Complete Debt Solutions I would invite you to contact me.  I would also invite anyone who has received a debt settlement agreement from any other debt settlement service provider to contact me.  I can be reached at (866) 996-9941 or (519) 827-5513.  Alternatively, you can contact me via e-mail at mark@comprehensivedebtsolutions.ca

You are invited to contact Mark Silverthorn if you have received a debt settlement agreement  after June 30, 2015.

You are invited to contact Mark Silverthorn if you have received a debt settlement agreement.

 

 

 

Redacted copy of 13 pages of material sent from Complete Debt Solutions to an Ontario resident on or about June 22, 2015

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P4[name redacted] - CompleteDebtSolutions Client Enrollment Package - Copy-page-004

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