The following article appeared in The Province on August 22nd, 2014 (go to original article)
After his wife Estelle died last year, Bertrand Levesque was dealing not only with grief, but also with thousands of dollars of debt.
“I didn’t have any ability to generate any additional income, or take care of any planning of that nature,” said Levesque, 72, of Chilliwack.
“But I knew there was a storm coming.”
That storm, Levesque said, was the debt he had amassed during the difficult months he spent as his wife’s full-time caregiver. Last summer, he contacted a licensed debt management company called Options Credit to help him get his finances back on track.
It’s a decision he now regrets. Unknown to Levesque at that time, Options Credit had already accumulated a long list of lawsuits and angry clients. Levesque said he lost tens of thousands of dollars, and never settled his debt.
Vulnerable and unsuspecting consumers struggling with debt face a “perfect storm” in B.C., say industry experts who warn the province has Canada’s highest rate of consumer debt, and looser regulation in the debt management industry with legislation that lags behind that in other provinces.
Industry leaders are disappointed the government has not yet introduced new legislation, after declaring in 2012 that they would. In the two years since then, it’s difficult to know how many new customers in B.C. have signed up for debt management services and lost money.
Levesque says he’s one of those.
“I was distraught after losing my wife. I was struggling to figure out how to go on,” Levesque said.
He contacted Options Credit â€” a Chilliwack debt management company run by Don Antle â€” and “everything looked legit.”
Levesque shared with The Province copies of documents dated June 2013, including a signed agreement and a $22,000 receipt with Options Credit. Levesque said he has lost the $22,000. He wants to warn others.
Other former clients of Options Credit shared similar stories, in interviews and court documents. But industry leaders say that in B.C., Levesque and Antle’s other clients are far from alone in their bad experiences with debt managers.
“Don Antle is just the tip of the iceberg,” said Margaret Johnson, president of the Canadian Association of Independent Credit Counselling Agencies (CAICCA).
And, they say, the B.C. government can Âand should be doing more to protect consumers.
Scott Hannah, president of the Credit Counselling Society, said B.C. does not do enough to prevent shady debt management practices, with the combination of high consumer debt and looser regulations that haven’t caught up to those in other provinces and U.S. states. Hannah said it would have been much more difficult for someone like Antle to operate if he had been in another province with tighter regulations.
B.C CITIZENS CARRY MORE DEBT THAN OTHERS
Updating B.C.’s legislation, Hannah said, “will provide better protection for the citizens of B.C. and won’t cost taxpayers additional funds to administer. The only people the new legislation will upset are those who are taking advantage of unsuspecting consumers.”
B.C. has the highest rate of consumer debt in Canada, with a recent study by TransUnion showing British Columbians carrying an average debt (excluding mortgages) of $38,799 â€” more than $10,000 above the national average.
This issue has come up before, and the B.C. government is aware of it. In March 2012, a working group made up of government representatives and industry leaders, including both Hannah and Johnson, submitted a list of recommendations to Consumer Protection B.C., calling for “the Government of B.C. move swiftly to introduce changes … to address the harmful practices within the Debt Settlement Industry.”
“As a result of gaps in our regulations,” the group said, “consumers are exposed to financial harm and loss of funds from debt settlement companies.”
The advisory group also submitted four specific recommendations intended to protect consumers, including provisions about how debt managers are able to charge clients and how they can handle their money. The group also outlined a way forward, including references to jurisdictions that had already made those changes, including Alberta, Manitoba, and Ontario.
IS LEGISLATION COMING?
A few months later, a Ministry of Justice representative told CTV News: “The B.C. government will provide legislative changes to regulate businesses that provide debt consolidation services.”
More than two years later, the government has not yet introduced that legislation. This month, Attorney General and Minister of Justice Suzanne Anton said in an email to The Province: “Our government is committed to enhancing protections for consumers in the debt management industry. My staff are aware of the Credit Counselling Society’s recommendations and have also consulted with industry stakeholders, our counterparts in other provinces and our consumer protection authority, Consumer Protection BC. We are committed to regulating debt settlement companies and any changes that B.C. is considering will require debt settlement agencies to be licensed and protect consumers from harmful business practices. This will require legislative changes, which we intend to bring forward in the near future.”
Debt management professionals, say it’s frustrating that the government has taken this long to address these regulatory gaps.
Johnson and Hannah acknowledge that people working in the government have busy agendas, but they say the longer these gaps exist in B.C.’s regulations, the more families will be negatively affected.
MANITOBA SEES IMPROVEMENT
No regulation is going to protect 100 per cent of consumers, but changes like those proposed in B.C. two years ago have had dramatic and positive impacts in other parts of Canada, said Brian Denysuik, vice-chair of CAICCA and president of Winnipeg-based credit counselling firm Creditaid.
Before the Manitoba government changed that province’s regulations in February 2012, “we were seeing a lot of people get trapped into working with these organizations, where they had turned around and they had sent them a whole bunch of money, only to be sued, only to find out that they’d been scammed,” Denysuik said. “It was getting ugly.”
“The changes around debt settlement here in Manitoba… have worked very, very well. I think the legislative changes have helped protect consumers. I fail to understand why B.C. has not done the same thing.”
Denysuik said in recent years, his office has heard from far fewer upset, distressed consumers who claim to have been scammed by shady debt settlement companies.
In March 2012, a month after Manitoba changed its regulations, the advisory group in B.C. submitted its recommendations to the government.
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