The Synergy Debt Group Inc. (website: synergydebt.ca) is an American telemarketing debt management company that is run out of Melbourne, Florida by Wav Services Team. Synergy Debt Group "Counsellors" are paid commission to sign up as many people as possible for their debt management program. This company makes a lot of claims about itself and its services that we believe are false and misleading. We would like to shed some light on these claims and provide some background information on this company so that Canadians can be informed.
|Synergy Debt Group Inc., synergydebt.ca, is run by the same people who ran the Vortex Debt Group.|
The information contained in this article has been obtained from Synergy Debt Group's former clients, current and former employees, government agencies and industry professionals. We have spent many hours painstakingly verifying all information presented in this article to make sure that it is as accurate as possible.
- Synergy Debt Group’s False Claims
- Synergy Debt is Not Licensed in Most of Canada
- Their Employees Falsely Claim that Their Company is Canadian and has an Office in Scarborough, Ontario
- Their Program Majorly Impacts Your Credit
- Many Major Creditors Refuse to Work with Any For-Profit Credit Counselling Company including Synergy Debt Group
- Their Interest Rates Don’t Change Very Often
- The Company's Legitimacy is Questionable
- Synergy Debt Group Inc. is Really the Vortex Debt Group and Wave Group Marketing
- How to Find a Reputable Debt Relief or Credit Counselling Agency
Synergy Debt Group’s Incorrect Claims
Here are the false claims that Synergy Debt seems to be promoting:
- They claim to be a Canadian company and have a Canadian office in Scarborough, Ontario.
- They say they are licensed to provide their services in Canada. They further claim to be licensed in all provinces.
- They claim their debt management program has “no negative impact on your credit score,” and it “allows you to maintain your credit.”
- They claim that all creditors work with them—even creditors who have a policy of not dealing with for-profit credit counselling companies like their company.
- You should sign up with them right away because the low interest rates that creditors are offering today may not be available tomorrow.
Synergy Debt Group is Not Licensed in Most of Canada
Synergy Debt is only licensed in Ontario and Alberta. The fact that they claim to be licensed in all 10 provinces but are only licensed in 2 is again a substantial distortion of the truth. If you do not live in Ontario or Alberta and Synergy Debt tried to sell you one of their Debt Management Programs, than that was illegal.
To offer a debt management program, the laws of most provinces require that an agency be licensed as a debt pooler. Anyone without a criminal conviction can obtain a debt pooler license in most provinces. Obtaining this license does not mean that an agency has been thoroughly investigated by the provincial licensing body, nor does it mean that the licensing body approves of an agency's business practices in any way.
Synergy Debt Employees Falsely Claim that Their Company is Canadian and has an Office in Scarborough, Ontario
Synergy Debt is 100% American owned and operated, and it has no offices in Canada. Synergy Debt Group and its related companies—Clear Blue Debt Solutions, Wave Group Marketing and others—are all run out of the same office in Melbourne, Florida by Tim McCallan,“the biggest fish to have never been caught in any regulator crackdown (source of quote).” These companies’ telemarketing sales office and their processing department are located at 3270 Suntree Blvd, Suites 102A & 102B, Melbourne, FL 32940.
|Synergy Debt Group's office in Melbourne, Florida. All of their sales and processing staff are located in suites 102A & 102B of this building. These are the same offices and staff that ran the Vortex Debt Group.
Further proof that Synergy Debt Group Inc. is an American company is drawn from the fact that it is incorporated in the state of Delaware, and the Officer, President, and Director for that company are registered as Wendy Manzo, Tim McCallan’s employee. On the second page of Synergy Debt’s client agreement it states that “this agreement shall be governed by the laws of the State of Delaware.” Canadian companies don’t put clauses like this in their contracts.
The Canadian office address that is listed on the Synergy Debt Group’s website, synergydebt.ca, is prominently displayed on their client agreements and is quoted by Synergy Debt employees is only a mail box. Synergy Debt Group does not have a real office in Canada, and they never have. The mail box they rent is called a “virtual office.” The receptionist for the virtual office answers the phone number for each of the mail boxes with the company’s name so that it sounds like you have actually reached the company. The receptionist then transfers your call to the company’s real office which in this case is a telemarketing call centre in Melbourne, Florida.
You can see the rental listing for Synergy Debt Group’s virtual office at 100 Consilium Place Suite 200, Scarborough, Ontario by clicking here.
There is nothing wrong with renting a mail box or a virtual office. However, if a company uses the office to deliberately deceive people, then they have clearly crossed the line. Based on our investigation and information we’ve obtained from a former employee, Synergy Debt Employees is clearly misleading and deceiving the Canadian public. All of their employees claim that the company’s real office is at the same mail box in Scarborough, Ontario. When asked for details, the employees would say things like “everything is outsourced to (the call centre in) Florida because it’s cheaper” and once you sign up for your program “everything will be handled by the Ontario office.” One employee went on to elaborate about all of the things that the Ontario office does including “processing,” “creditor relations,” and other things. The only problem of course is that the Scarborough office is only a mail box.
Synergy Debt Group’s Program Majorly Impacts Your Credit
The Debt Management Program that Synergy Debt Group offers will have a major negative impact on your credit score for 6 – 7 years. In no way does it allow you to maintain your credit. Non profit credit counselling organizations that offer a legitimate version of this program have the authority to erase the records of debts that are enrolled on their Debt Management Programs 2 years after their clients finish their programs. To our knowledge the Synergy Debt Group does not have the ability to do this. So while their program may help some people's credit a bit, overall it is far more likely to have a very negative impact.
Synergy Debt’s client agreement contradicts their sales representatives and furthers our point by stating that in signing their agreement a client acknowledges that they “recognize that participation in Synergy debt management program could have an adverse effect on [their] credit report (page 1),” and Synergy “will not provide or engage in credit repair or undertake to eliminate any negative entries on [their client’s] credit report (page 2).”
Creditors May Refuse to Work with Synergy Debt Group
Synergy Debt Group claims that all creditors work with them. However, based on our experiences with a number of creditors, we know that this isn't always true. Former Synergy clients have told us that American Express, MBNA, and a couple of credit unions refused to deal with them. So we called American Express and MBNA to verify Synergy Debt’s claim. The representatives that we spoke with at American Express and MBNA both assured us that they do not work with the Synergy Debt Group. This is all the more disturbing since we called the Synergy Debt Group as a normal consumer who was interested in their service and Synergy’s “processing department” provided us in writing with a fictitious interest rate of 0% that they claim American Express was offering their clients. This is a claim that American Express denies as it is contrary to their policy of not dealing with for-profit credit counselling companies.
Synergy Debt Group’s Interest Rates Don’t Change Very Often
One representative we spoke with at Synergy Debt told us that we would be smart to sign up for their program right away because “interest rate offers fluctuate with the market.” This is false. If a creditor is willing to work with Synergy Debt, they will have a standard reduced interest rate that they will charge Synergy Debt’s clients. These rates are very rarely changed by creditors. So there is absolutely no need for anyone to rush into signing anything. The only change in interest rates that Synergy Debt employees may observe is if the clients they are signing up hardly qualify for interest relief, then the creditor may only reduce their interest rate by a small amount—or they may not reduce it at all.
Synergy Debt Group’s Legitimacy is Questionable
We called the Synergy Debt Group several times as a normal consumer who was not experiencing financial difficulty. Our only complaint was that we didn’t like paying 20% interest on our credit cards each month. Each time Synergy Debt’s “Counsellors” were more than willing to sign us up for their program. Based on our extensive experience providing Debt Management Programs to Canadians, we know that creditors would be very unlikely to accept our debts onto a Debt Management Program based on the situation we outlined.
This experience with Synergy Debt lends credibility to a former Synergy Debt employee’s claim that all the company really cares about is signing up people for its programs and collecting the first few payments. Synergy Debt’s client agreement further arouses our suspicions that this allegation may be true. Synergy Debt’s client agreement dated June 27, 2011 stipulates that their clients must accept the following:
- “My first payment to Synergy will not be disbursed to my creditors (page 1).” Synergy will keep 100% of this payment. This practice is unheard of among reputable credit counselling organizations. This does not help the client and instead creates a hardship for them by forcing them to make a double payment on their first month of the program since Synergy’s contract states that you must still pay your creditors yourself until the second month.
- “The first 90 days of the program . . . is the amount of time my creditors need to process my accounts and apply my benefits (page 1).” This may be true in some exceptional cases, but most of the time, most creditors will respond to a credit counselling agency within approximately 30 days. We would be very concerned if Synergy was waiting until 90 days to break the news to its clients that many of their creditors refused to allow the client’s debt to go on the program.
- “All fees are non refundable (page 1).” We sincerely hope that Synergy Debt is not holding out for 90 days so that they can keep their client’s first three payments. Unfortunately, the ex-employee we spoke with insists that they are.
- If a client feels that they have been wronged by the Synergy Debt Group, they will either have to travel to the state of Delaware or hire a lawyer in Delaware to proceed with legal action. Synergy’s contract clearly states that, “this agreement shall be governed by the laws of the State of Delaware. Any action to interpret or enforce this agreement shall be brought solely before the courts of that state (page 2).”
We believe that these business practices stated in Synergy Debt’s client agreement, calls the legitimacy of their company into question, and when these business practices are viewed in light of Synergy Debt’s owner’s track record and the allegations of many of his former employees, we have very serious concerns about the legitimacy of this company. All legitimate non-profit organizations who offer Debt Management Programs only offer them to around 20% of the people that seek their help. The reason for this is that these programs are not appropriate for the financial circumstances of 80% of people who seek help with their debts. There are many other options that legitimate credit counselling agencies will present to people who a Debt Management Program doesn’t make sense for.
Legitimate credit counselling agencies know what options may be the right fit for their clients because they help each of their clients prepare a budget that takes into account all of their financial obligations along with their assets and income. When we called the Synergy Debt Group, they did not do any of this. If they don’t carefully analyze your financial situation, then they are in no position to recommend financial solutions to anyone. This is another huge red flag that we believe calls their motives and business practices into question.
Synergy Debt Group Inc. is Really the Vortex Debt Group and Wave Group Marketing (WAV Services Team)
The email signatures of Synergy
Debt Group and Clear Blue Debt
Solutions "Counsellors" don't
mention either of these
companies. Instead they indicate
that these people work for WAV
Services Team which we are told
is Wave Group Marketing.
Synergy Debt Group Inc., Clear Blue Debt Solutions Inc. and the Vortex Debt Group all appear to be run through—and all employees are paid by—Wave Group Marketing or Wav Services Team (former and existing employees of these companies have confirmed this. This is also referenced on employee email signatures. They read "WAV Services Team."). Timothy McCallan appears to either own or control all of these companies and operate them all from the same offices in Melbourne, Florida. Establishing that all of these companies are run by the same people is important because their track record is informative. To read more about the predecessor to Synergy Debt Group, the Vortex Debt Group, click here to see our review. Here are some of the highlights from that review:
- Synergy Debt Group Inc’s Predecessor, the Vortex Debt Group, Engaged in “Deceptive and Unfair Practices”
The "Vortex Debt Group engaged in deceptive and unfair practices by promising to reduce consumers' debt, taking significant fees from consumers in exchange for this claimed service, and failing to actually reduce consumers' debts. This often left consumers with more debt and less money.” - Attorney General's Office from the state of Missouri on why they banned Vortex from their state and ordered them to refund all fees paid by their clients.
Colorado's Attorney General also canceled and revoked Vortex's license on July 1, 2011.
- BBB Warned Consumers about the Vortex Debt Group
In February 2011 the Vancouver Better Business Bureau (BBB) warned Canadians about dealing with the Vortex Debt Group. In the U.S., Vortex has an F rating with the Better Business Bureau—the worst rating possible on a scale of A+ to F—after the BBB received numerous complaints.
- Vortex’s Success Rate Likely Less Than 10%
A government investigation estimated that the success rate of for-profit debt settlement companies like Vortex was less than 10%. One past and one current Vortex employee confirmed this. The former employee estimated that the actual success rate was less than 5%. Meanwhile, Vortex’s sales people were telling Canadians that they have an extremely high success rate.
- CBC News Exposed the Vortex Debt Group
The CBC blew the whistle on the Vortex Debt Group and accused them charging desperate people high fees but then leaving them worse off with more debt.
How to Find a Reputable Debt Relief or Credit Counselling Agency
If you would like to find a reputable organization to help you explore all of your options to get your debt under control (including a debt settlement) and create a plan eliminate your debt, we suggest that you contact an organization that meets all of the following criteria:
- A non-profit organization. A registered charitable society that does not exist to profit off of people or pay its Counsellors commission or incentives based on the number of people that they sign up onto a certain program.
- An accredited member of a recognized Canadian credit counselling association. To find an accredited agency near you, click here.
- An accredited member of the Better Business Bureau in good standing.
Update: July 25, 2012
CTV News investigative reporter, Lynda Steele, presents her findings on the Synergy Debt Group and warns that "American debt settlement companies are preying on vulnerable" Canadians. Full CTV story on Synergy Debt Group.
Notes: We have withheld the identity of the former Synergy Debt employee who came forward to us with more information on the Vortex Debt Group, Synergy Debt Group and Clear Blue Debt Solutions. The employee came forward after they saw the CBC’s news story on Vortex. The former employee fears retribution from their employer if the employer were to find out who the former employee is. We have reason to believe that the former employee’s concerns are valid. We have provided this employees allegations and our findings to the appropriate Canadian authorities.
Based on the information that the former employee provided to us, we have been able to verify numerous details about these companies including the fact that Synergy Debt Group and Clear Blue Debt Solutions employees are paid $9.62 per hour plus a 30% commission of their client’s first payments “after they hit $6,000” in total first payments signed up for the month. So the employees of these companies earn more money if they manage to sign up more people onto these companies programs.