Canadian banks are insanely profitable, in a recent episode titled “busting the banks” CBC Marketplace revealed how Canada’s 5 biggest banks, earned a record $28 BILLON in profit and how they make some of that money.
This Marketplace episode exposes some serious banking trickery. Another example of bank trickery, that banks seem passionate about, is trying to get you on “their” debt relief plans, and away from ours. These plans are run by so called “not-for profit” credit counsellors. Some credit counsellors have gone so far to tell the public the debt management plan is free. I break it all down in this blog here on non-profit credit counselling. Financial expert Gail Vaz Oxlade wrote a great article here, talking about how good advice isn’t free. I agree, you get what you pay for.
Many of the bigger Canadian banks dislike debt settlement companies, and here’s why: They make almost DOUBLE the money off Canadian consumers that use their debt management plan administered by non profit credit counsellors. If you owed $30,000, then expect to pay back about $35,000 over 5 years on “their” plan. Our plan on the other hand, would cost about $19,000 and take 3 years. Not only is “their” plan more costly, but it also takes longer, and as a result does considerable damage to your credit rating.
Banks are about making profit for their shareholders, so anytime a company like mine gets involved, I routinely hear creditors telling our clients that we are “not on their approved list of service providers” or they don’t work with “for profit companies”. It’s nonsense, we ROUTINELY settle debt with all Canadian creditors, including the big 5 banks, and have thousands of settlement letters to prove it with satisfied customers to back up our results.
It’s laughable actually, and here is why, when the role is reversed and the banks want an advocate, they pay to use a for profit company. Check out this article on the Toronto Star. Both TD and RBC seem to refuse to work with a non-profit called the Ombudsman for Banking Services & Investments (OBSI) when it comes to resolving complaints filed against them by consumers. Instead they use a for-profit arbitrator to mediate for them.
I think it’s hilarious that they are telling you as a consumer, that they don’t want to work with an advocate like my company to protect your interests and instead work with their “approved” companies who are out for the creditors interests. But when certain banks want an advocate to protect their interests, they use a for-profit business to advocate for them. Gee I wonder why, is it possible they are getting more favorable results using a for-profit organization?
Isn’t this Canada, don’t we have the freedom to choose? What do you think about creditors who push you onto their debt management plans?
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