Fraudulent debt help "resettling” in Canada

Written by Administration | 08 June 2011

For every problem there is a solution and for every solution there is an industry to provide that as a service.  Sadly, along with almost any industry, there are opportunists who try to take advantage of those in need by taking money for poorly or un-rendered services.  Most recently an industry of need that has sprung to life is helping those with debt work through their difficult financial times.  Unfortunately the same country that brought the world Lite beer, monster trucks, and the glory that is rap music, has now taken assisting troubled debtors to a new low.

In an effort to thwart a booming industry that was rampant with fraud, in 2010 the US passed a law that said companies who offered debt help services could no longer charge “up-front fees”.  That is to say that; any company which offers help settling, restructuring, or assisting people with debt could no longer require people to pay to the debt settlement companies prior to receiving the settlement services they were promised. 

                While this is good news for those who would have been taken by scammers it was bad news for companies in the US which provided legitimate help.  Now it also appears to be causing new problems for Canadians, as those would-be fraudsters move north for new hunting grounds.

According to a recent article one Florida-based company, Vortex, has already stirred up problems for those buried under more debt than snow.  Kevin Hollett, spokesman for the British Columbia Better Business Bureau said, "The beginning of this year we started to hear a lot about this company, since then we've received approximately 1,500 inquiries.”  That’s just in B.C. Meanwhile back in the States, Vortex has big problems in California and Florida and was recently banned from doing business in Missouri.

          Why are Canadians falling for the schemes offering an easy way out of debt?  According to the article, "These are people are vulnerable."  After all, “what Canadian would enter into a contract with company not licensed or bonded in Canada?”

            Outside of being banned from deceptive or misleading business practices in the US, American companies are coming because there are currently no laws banning upfront fees in Canada.  As well, there are many other protections not in place to protect consumers and no recourse to punish companies who operate across the border with less than savory practices.

             So if you are looking for help with overwhelming debt, what can you do to protect yourself?  At least in the province of BC you can make sure the company you work with is:

-         Licensed

-         Deposits your funds into a trust account

-         Signs a contract with you

Beware of high pressure sales tactics from telemarketers and be sure that when searching out help you look at all the options.

Another great story was also done on CTVBC…