ComplaintsforNew Leaf Debt Solutions Inc

• Initial Complaint

  29/11/2023

  Complaint Type:

  Customer Service Issues

  Status:

  Answered

  More info

  I entered into a debt counselling program with New Leaf in January of 2023 to help me clear some consumer debt. At first I thought this program would help and I was aware my credit would be impacted negatively. What was not explained to me was how negatively it would be impacted. New Leaf never followed up with creditors to confirm they received payments and as a result multiple creditors reported I made zero payments in 2023. This had a devastating impact on my credit. So much so that I cannot renew my mortgage and am on the brink of becoming homeless. I had brought this up in writing to New Leaf on multiple occasions and they brushed me off multiple times. I have recently reached out to the executive director Samycha ****** ******* to assist me and she refuses to respond. I signed up for support, advocacy and debt relief. I received debt relief a crippling credit impacts. This company has made no effort to assist and their unwillingness to respond is disappointing and should be investigated by the BBB. I asked New Leaf to contact the creditors and they refuse Please help me so this does not happen to another family. I am asking that they correct my credit file and fix the negative marks immediately so I can secure a mortgage in 2023

  Business response

  14/12/2023

  Dear Sir or Madame:
  
  This letter will serve as a formal response to your office’s correspondence regarding the above referenced case. We have reviewed the aforementioned client’s file and we would like to clarify this situation by offering you the following background information, as well as our position regarding the status of this matter up to this point.
  
  New Leaf Debt Solutions, Inc. (New Leaf) is a national, non-profit credit counselling agency.  ***** *** ********* ** ***** *** ************ *** ******** **** ******** ****** ****** **** **** ************ ********* *************  *** **** **** ********** **** ** ********* ********* ********* ** ******* *** ********** ******** ** ******** ** ********* ** * ******* ******  *** ********* ** ********** ********* *** ** ******** ** **** ** *** **** ************* ******** ******* ** *** *********  ** ********* *** ****** ******* *** *********** ***** *** **** ******* *** *** **********  ** ******* * ******* ******* *** *** *** *** ******** *********** *** ********* 
  
  The Client initially engaged the services of our organization on June 14, 2022 in order to receive assistance in fulfilling the debt obligation to the Client’s creditors. The Client ceased communications with New Leaf, then we next heard from the Client on December 9, 2022. The Client indicated their struggle due to additional debt taken on and wants to explore [program] options again, concerned with possibly losing their house, essentially without swift intervention. Upon receiving all of the necessary information to properly process the Client’s file, we immediately contacted the Client’s seven creditors and made arrangements that would allow the Client to make one monthly payment through our office and be able to re-pay the enlisted total debt, at a significant reduction in interest charges to three of the creditors and the remaining ones completely interest-free. The Client’s first payment was due to our office by January 11, 2023 and the final payment was dispersed to the Client’s creditors on October 25, 2023.
  
  The Client has alleged that New Leaf Debt Solutions, Inc. was contacted repeatedly regarding the concerns of the complaint and New Leaf took no action.
  
  On June 13, 2023, the Client submitted a query for information stating their mortgage broker inquired about the contract with New Leaf and advised that the creditor payments are not being reported on the credit file and all accounts are showing as R9 and R7. Our Representative replied to the Client advising that some creditors while on the program, do not report payments until the end of the program. Later that day, the Client inquired how to go about paying off the program creditors in full as there is a risk of not getting a mortgage and losing their house due to negative reporting. The following day we called and spoke with the Client who is aware, the program would impact their credit negatively but was unaware that payments would not have been reported by some creditors.  We informed the Client that we do send creditors a balance verification letter once an account is paid in full, and we can forward them to the Client as soon as we receive them from creditors so that the Client can file a dispute with the credit bureaus to update the report to account paid in full. Our Agent dialogued with the Client in detail regarding their upcoming mortgage renewal and offered the assistance of a Specialist from an ********* ********* ***** who can reach out to the Client and discuss options in getting help with a mortgage loan. Decisions on extending any credit rest with the creditor, and New Leaf Debt Solutions, Inc. cannot impact those decisions.  We can, however, identify potential creditors that may help Clients achieve their goals such as home ownership etcetera.
  
  On July 12, 2023, the Client submitted a query stating the expected call back never materialized and expressed regrets in signing up for the program as, since doing so, the credit score has dropped 100 points.
  How a Client repays their debt on the debt management program also has significant bearings on the credit score. The Client’s June payment was not honoured by the Client’s bank and it was never made up but skipped. Fast forward to October 2023, by the payoff was received by New Leaf, the Client had skipped the August payment as well as the September payment; there were altogether, four non-sufficient payment activities and only one of those, the July payment was made up. Consequently, three of the Client’s creditors dropped the program and those accounts had to be withdrawn for the Client to manage. During this period of time, we have been in constant communication with the Client. Following the disbursement of the payoff on October 25, 2023, we sent the Client the program completion letter.
  
  On November 20, 2023, we received an email from the Client indicating essentially that two of the enlisted creditors did not show receipt of a single payment. On November 21, 2023, the Client insisted on written communication only and we obliged. The then Director, responded to the Client that we understood their frustration and are working diligently with the two creditors regarding how they reported the Debt Management Program payments to the credit bureau(s). The Director informed the Client that we are awaiting a response from the Client’s creditors and would follow up with the Client once received and encouraged the Client to contact Client Services for an update in the meantime. 
  
  On November 28, 2023, one of the creditors replied that they have updated both ********** and ******* to reflect “NIL balance” however updates can take thirty to sixty days to show on Client’s credit report. On November 30th, 2023 the other creditor replied that the credit bureau will be updated. The Director requested a timeframe for the update to reflect on the Client’s credit bureau and the creditor did not respond. A follow-up fax was sent to them on December 11, 2023. In the interim, we sent creditor paid in full letters to the Client along with individual payment history for the two creditors to aid in credit bureau dispute if still necessary.
  
  While it is typical of the creditors to re-rate the debts on the program, it is by no means consistent. How the creditors report to the credit bureaus is up to them and varies from creditor to creditor. As well, these ratings may change over the course of the program according to their practice/internal policy.  This is not something that New Leaf can affect.  New Leaf Debt Solutions, Inc. does not report to the Credit Bureaus nor resolve credit bureau report issues.  Our Client agreement which is signed by the Client, states, “Entering into a debt repayment program may lower your credit rating or credit score. Your credit rating is used by lenders and creditors, insurance companies, landlords and potential employers to assess applications for items such as loans, lines of credit, credit cards, insurance, apartment rentals and employment.” And as well, in the disclosures that “The Client understands that the Client’s participation in a Debt Management Program may affect the Client’s credit rating either favourably or unfavourably …”.
  
  We understand how the Client may feel regarding their credit worthiness and while this is important, our program is designed to assist with becoming debt-free and being in a better financial position at its conclusion. The Client has benefitted from repaying the enlisted debts at substantially lowered interest rates and in some instances, completely interest-free which amounted to significant savings compared to paying on their own at the initial contractual rates that the Client had with their creditors; this and becoming debt free have a much larger impact on credit worthiness over time.
  
  We are happy to have had the opportunity to assist the Client with their financial situation.  We do not feel that any error was made on the part of this organization and do not take culpability for the credit reporting actions of creditors.
  
  New Leaf Debt Solutions, Inc. has a long history of providing a quality service and has an excellent reputation.  It is our policy to endeavor to resolve any dispute to the satisfaction of all involved. We appreciate your bringing this Client’s concerns to our attention.
  
  If you have any questions, please do not hesitate to call me.
  
  Sincerely,
  
  E. H.
  Executive Director

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