A reader has sent in a contract for advanced fee debt settlement services from Silverthorn & Lupolover, LLP in Canada. I thought it would be interesting to take a look at what is being sold in Canada with this partnership of an American and Canadian attorney firm Mark Silverthorn – Canada and Michael Lupolover – U.S.).
The copy of the contract I have was recently signed by a consumer.
The fee for the debt settlement service is 17% of the enrolled debt. The first three monthly payments will be applied in full towards fees due before any money is saved for actually settling the included debts. The rest of the fee will be front loaded over the first half of the remaining client installments. It sure seems like the classic failed approach that was used previously in the U.S.
On top of this massive fee the consumer is also being asked to pay a monthly service fee of $53.84 but the client is being asked to save the funds for settlement themselves or in an escrow account with Transaction Express Canada so what in the world is this extra fee for? The monthly fee adds up to about $1,776 alone over the entire plan.
The agreement says if the consumer uses a third-party company like Transaction Express Canada they may also charge a monthly fee as well. Fees just keep piling up.
Now this is a stinker, the contract says that after the initial 30 day cancellation period the fees paid by the consumer are nonrefundable. So if the fees in this agreement are heavily front loaded and the consumer decides later to dropout of the program they will have paid mostly fees for services not received.
The contract even says “Client may not receive the full value in the Program until Client completes entire savings schedule.”
This appears to be a 36 month plan with 33 payments divided into escrow or fees and I’m assuming the first three payments which are taken entirely in fees are on top of what is shown in the breakdown bellow.
The agreement says collection calls can’t be stopped, “Client agrees…that it can stop any/all collection phone calls, correspondence, finance charges, or legal proceedings due to Clients debts.”
This statement is shocking in my opinion.
We determine your eligibility for a debt settlement program, but we do NOT evaluate your unique credit and debt situation to determine the best debt relief option for you.
I can’t believe they are not taking any responsibility to make sure the solution they are selling is the most appropriate for the consumer. We’ll sell you into the program but we don’t know if it is the right program for you. Nice.
The agreement makes it clear the creditors may elect to not participate and late fees, penalties, and increased interest may continue to build on the accounts.
“Participation in a debt settlement program, like any failure to pay creditors on time, will possibly increase collection acidity.”
The cancellation page is alarming. In order for the consumer to cancel out of the program they are asked to sign a form which also waives any responsibility by the firm. “By canceling this Agreement…you specifically waive, release, and hold Silverthorn & Lupolover, LLP, harmless from any and all claims arising out of this agreement.”
That just doesn’t seem fair to consumers if they feel they have been harmed but want out.
Frankly I am surprised by how inequitable and unfair I feel this agreement is for Canadians. I’m sure glad we got rid of most of this stuff in the United States.
In the interest of disclosure, I have met Michael Lupolover and he has attended one of my classes and my impression of him was he was genuinely interested in making sure consumers were treated fairly. This agreement certainly isn’t fair in my opinion and I’m surprised.
And as for Mark Silverthorn, I don’t know him at all.
Silverthorn & Lupolover Advanced Fee Canadian Debt Settlement Contract Review by Steve Rhode
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