U.S. 'debt resettlement' firm draws Canadian warnings

Canadian consumer groups are warning about Vortex Debt Group, a U.S.-based debt resettlement company now operating in Canada, following many complaints from consumers who allege they were left with less money and more debt.

Canadian consumer groups are warning about Vortex Debt Group, a U.S. based debt resettlement company that is now operating in Canada, following numerous complaints from consumers who allege they were left with less money and more debt.

Vortex Debt Group promises a 'path to financial freedom' for consumers falling behind on paying bills or struggling to make full payments with creditors. ((CBC))

The Florida-based Vortex Debt Group currently has an F rating with the Better Business Bureau in the U.S. and has been banned from operating in the state of Missouri because of alleged deceptive and unfair trade practices.

The BBB has issued warnings in the U.S. based on 43 complaints that the company has allegedly taken consumers' personal information — including credit card and banking information — and used them to withdraw money without delivering debt services.

"I feel like a victim of a crime, like somebody's just come into my house and stolen things from my house from me, because basically that's what they've done," said Adrienne Saunders, of London, Ont., who signed up with Vortex in April after she saw a pop-up ad online and inquired about the company's services as she and her husband mulled his possible retirement. 

After speaking to a representative over the phone, Saunders signed an electronic contract after the representative assured her she would have three days to cancel if she decided not to proceed.

The same day, she and her husband decided to cancel the contract. The next day, she cancelled the contract online and printed the cancellation confirmation. She said the representative called her to try and persuade her to stay with the company, but she refused. Days after Saunders cancelled the contract, Vortex took $450 from her bank account.

'How can people like that sleep at night'

She told her bank to cancel access to her account and initiate recovery procedures, which were successful. Saunders has tried to contact the company and the representative she talked to directly by telephone and emails, but has yet to get a response.

Adrienne Saunders calls Vortex's tactics 'underhanded.' ((CBC))

"They've taken money out of our bank account, and it really gets me angry that they can do that," Saunders told CBC News.

"I mean how can people like that sleep at night? I just don't understand that. Because the way I was brought up and the way I live, you know, you don't do that. That's underhanded."

Vortex Debt Group has been operating in the debt settlement industry all over the U.S. for almost 20 years. The company has not responded to requests from CBC News for comment.

The company says on its website it has a team of representatives that "help to settle your debt for less than what you owe," and focuses on consumer credit counselling, bankruptcy, debt consolidation and managing accounts.

The company uses telemarketing to reach consumers offering debt negotiation services and charges a set-up fee, as well as a monthly monitoring fee.

'Lucky for us, our account was empty'

Susanne and Corey Cyr of Mississauga, Ont., also contacted Vortex after Susanne saw an ad on Facebook.

"My husband has been out of work since last April, and with his EI about to run out and our bills accumulating, I went to the internet to see what kind of help I could find for us," Susanne, a 40-year-old bus driver with three daughters, told CBC News.

After filling out a questionnaire, the couple said they received a phone call from a representative who convinced them to disclose personal details, including their bank account information.

"They said that it was so they could type up the paperwork and mail it to us," Susanne said. "We were to look it over, sign it and send it back right away so we could get started."

After the couple received the documents, they noticed several errors and missing information and called the company to fix the mistakes.

"We didn't sign anything, and called to get the paperwork corrected," she said. "A few days later, they tried to take money out of our bank account. Lucky for us, our account was empty."

The couple said they contacted their bank to report what happened, and their bank manager agreed to waive the non-sufficient funds fee. When Vortex tried to withdraw money a second time, Corey Cyr called the firm to "tell them to get lost."

The couple said the firm has called them once since the second attempted withdrawal "asking us why we hadn't responded yet to get things going."

Since then, the Cyrs said they have worked with a Canadian debt consolidation service and things "are getting a little better every day."

Action being taken in B.C.

Scott Hannah, president and CEO of the non-profit service Credit Counselling Society, which advises Canadians on personal money management, is heading up a committee for consumer protection in B.C. to address concerns about Vortex and other U.S.-based debt settlement companies expanding into the province.

Scott Hannah of Credit Counselling Society says U.S. debt settlement firms promise consumers they will be able to settle their debt for 40 per cent less than what they carry. ((CBC))

Hannah told CBC News he believes the U.S. companies are misleading the public into believing they have a program that creditors will support that will allow them to pay a fraction of the debt they have — and lead them to a fresh start.

The British Columbia Better Business Bureau, meanwhile, has received complaints from consumers in the province over what they claim are high-pressure sales tactics from telemarketers working for Vortex.

"The beginning of this year we started to hear a lot about this company, since then we've received approximately 1,500 inquiries," bureau spokesman Kevin Hollett told CBC News.

The firm's contracts detail Florida and California laws that govern the agreement. Vortex manages to operate despite not being licensed in provinces such as British Columbia because it takes a fee up-front, Hollett said.

Desperate consumers targeted

But these up-front fees allow companies to target members of the public who are often too desparate to read the fine print. 

"So what Canadian would enter into a contract with company not licensed or bonded in Canada?" Hannah said. "You're dealing with people in financial difficulty. If they are looking to consider a debt consolidation, they don't have excess cash.

"These are people who are vulnerable."

Hannah said Vortex and other U.S. debt settlement firms promise consumers they will be able to settle their debt for 40 per cent less than what they carry.

"They want you to pay almost all fees they will charge you up front before they settle anything," he said.

"They lead you to believe creditors will wait, and that's not true. Your creditor expects payment. If not received, they will take action against you."

In April, Missouri announced Vortex would stop operating in the state and would refund fees paid by consumers there after the state's attorney general alleged the company took money but didn't deliver on promised services.