Consultants are not always what they appear
Dear Editors of Business Examiner,
I attach for your reference a copy of an article from your publication regarding Four (4) Pillars Consulting. As a licensed trustee in bankruptcy and a Chartered Insolvency and Restructuring Professional, I take great exception to the information contained in this article that ran next to the ad placed by Four Pillars of Victoria, BC.
The article indicates that 4 Pillar’s clients include those who are struggling with student loan debt and debts from the Canada Revenue agency, implying that they could help debtors compromise these debts. This is misleading as neither agency has the legislative authority to compromise these types of debts outside of the Bankruptcy and Insolvency Act. Both agencies in some limited circumstances, can offer some reprieve on the interest charged, but this is not a compromise of the principle amount.
Further, the article claims that the company in question offers several ways to deal with debts including “consumer proposal or bankruptcy”. This statement is also misleading as 4 Pillars is not a bankruptcy trustee but rather simply a franchise where the individual owner can hold themselves out to be a “debt consultant” once they have paid the franchise fee. The only firms or individuals licensed in Canada to oversee either a consumer proposal or bankruptcy is a federally licensed trustee in bankruptcy and any claims that this firm can legally offer these services, is false as they are not licensed trustees.
The Office of the Superintendent of Bankruptcy under Industry Canada oversees the licensing of trustees and can refer cases to the RCMP for investigation and recommendation of charges for those who commit any offence under the Bankruptcy and Insolvency Act including those who falsely represent themselves as a bankruptcy trustee. A copy of this article and ad has been sent to them for their review.
On an anecdotal basis, I personally have been informed that some local so called debt consultants will refer unsuspecting debtors to a bankruptcy trustee for a “fee” of upwards of $1,500, wherein, in truth, this process is free. Every bankruptcy trustee that I know offers a free initial consultation where the personal situation of each debtor is considered and the personal options are outlined in detail, be it either a consumer proposal or a personal bankruptcy.
The Canadian market is flooded with misinformation about so called debt consultants. Unfortunately, the terms debt consultant, debt counselor, or credit counselor are unregulated in Canada such that anyone, without any training, authority, education, professional qualifications, or even a governing professional body overseeing ethics or standards of care can operate without any oversight or expectation of service. The harm caused to debtors is of such concern that the Canadian government under the Financial Consumer Agency of Canada issued a Consumer Warning about the issues surrounding debt settlement companies. I refer you to:
http://www.fcac-acfc.gc.ca/eng/about/news/pages/ConsAlert-ConsAvis-0.aspx?itemid=170 – for a discussion surrounding these issues.
I hope that in future cases, a little more attention is paid to factual content within the pages of your publication. Colleen Craig, CA, CIRP
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