Tag Archive for Law Times

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.

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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.

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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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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.