Global News Story on Cambridge Life Solutions ‘Debt Relief’ PracticesPosted on by Stephen Jones
The Global News program Consumer SOS turned their investigative eye onto the growing ‘debt relief’ industry in Canada on May 1, 2012. Examining Cambridge Life Solutions, Consumer SOS identified that these companies promote an “easy fix” to debt problems which, in reality, “could leave you in even worse financial shape”.
While using Canadian celebrity Alan Thicke in TV and radio commercials to promote their services in this country, Cambridge Life Solutions is actually a California-based company. Its use of up-front, non-refundable fees (billed before creditors are contacted or accept any proposed debt repayment plan) represents a practice that “some U.S. states and 2 provinces have outlawed”. Sean O’Shea of Consumer SOS noted that “the debt repair company gets paid first” and this point was admitted to by the President of Cambridge Life Solutions in the news story.
Jorge Fortune, the President of Cambridge Life Solutions, appeared on camera in the news story and confirmed not only that the company collects fees up-front, but that the person seeking their help actually has to save up money to pay back the creditors. The journalist summarized the concern with this concept in stating “I don’t have any money, that’s why I’m coming to you in the first place, I can’t afford that, how can I save money”. The President of Cambridge Life Solutions replied to this by stating “if you cannot save money and stick to the program, this is not the right program”.
Of equal concern to the up-front fees and expectation that those in a debt crisis need to save money, Global News identified that the debt relief program has no ability to stop collection agency calls, or legal actions like wage garnishments. The reported noted that only a consumer proposal, or bankruptcy, is able to protect a person from collection agencies and legal actions. “In both those cases” (ie. consumer proposals and bankruptcy), “you can’t be sued for not paying your bills. When you use a credit fixer, you can still face legal action and many are threatened while they try to save up to pay those bills”.
The Global News Consumer SOS story is just one of many recent media, government and police warnings about debt settlement companies and the “false” and “misleading” advertising of these companies. For a better understanding of the seriousness the government, police and media have associated with these companies, the following links provide helpful information:
1. The Financial Consumer Agency of Canada issued a warning about debt relief companies. Click here for the full consumer alert.
2. The Ontario Provincial Police Anti-Rackets Branch issued a news alert about debt company “service scams”. Click here for the full news release by the O.P.P.
3. Macleans Magazine ran a feature story on Cambridge Life Solutions and the banning of their practices in the U.S. and two Canadian provinces. Click here for an on-line copy of the Macleans story.
4. CBC News covered Cambridge Life Solutions’ unlicensed status in Nova Scotia. Click here to see the TV story via YouTube.