The Loans: Residential school students say they’ve been hurt by law firm

Posters were put up in Honour Walk offices and in strategic locations around the towns where form fillers were working, advertising a five per cent discount on computers for “members of the residential school healing society.” A toll free number was listed on the poster as well as a Web site link: www.nationalcomputersdirect.com.

APTN National News
Posters were put up in Honour Walk offices and in strategic locations around the towns where form fillers were working, advertising a five per cent discount on computers for “members of the residential school healing society.” A toll free number was listed on the poster as well as a Web site link: www.nationalcomputersdirect.com.

That Web link is now defunct and there is no trace anywhere online of any company called National Computers Direct. But a corporate search reveals that the company is listed as “active” as of Nov. 29. The registered owner of the company is David Hamm.

That toll free phone number yields another very interesting connection to one of the healing society corporate officers. The number, which used to reach National Computers Direct, now reaches a Calgary-based company called Thermablade Hockey. A quick Google search of Thermablade Hockey reveals that David Hamm is the company’s CEO.

On the Web site, Hamm claims that $15 million has been invested in the company already and it owns $2 million worth of equipment. The company makes skates with heated blades and claims those blades allow tighter turns and more rapid acceleration than conventional skates. A number of former NHL players endorse the product on the Web site.

As we reviewed the files of IAP claimants on the Blood Reserve last summer, we noticed many loan agreements with two companies that were charging very high interest rates. The companies, Funds Now and Settlement Lenders, were lending money to former students against their IAP payments. We saw loan agreements charging interest rates as high as 29.9 per cent.

Several of the former students allege that right after they signed the Honour Walk papers and became Blott and Company clients, the law firm would arrange loans for them that were to be repaid when the client received the eventual compensation settlement. Frequently the lender would also sell the claimants big-screen TVs, laptop computers and other electronics.

One of the companies that lent money to former students was Funds Now, Inc. That company has two directors who are also the only two voting shareholders. Their names: Laura Hamm and David Hamm.

The high interest rates can quickly erode even a six-figure settlement. At 30 per cent, the interest will come close to equaling the entire amount of the loan within three years. After the first year, you’re paying 30 per cent interest on the interest that accrued during the first year. If no payments are made over a three year period, you will end up payment more than 100 per cent of the loan in interest, plus the original balance.

And some IAP claimants represented by Blott and company were waiting a long time to get their hearing. The Oversight Committee minutes rarely name names. But the minutes of the IAP Oversight Committee from a meeting held January 26, 2010 in Ottawa, show that the committee was concerned about a backlog of cases at Blott and Company.

“Decision: Counsel David Blott will be asked for a file summary of how the firm will be moving forward on the approximately 1,000 outstanding claims he holds,” the minutes state.

Jon Faulds said he tried to talk his clients out of borrowing at high interest rates.

“Any time we get any indication that one of our clients is contemplating taking out such a loan, we try to discourage them from doing it because the interest rates and charges are just so high. I think we have had some success with our clients in making them aware of just how expensive those loans are,” he said. “Part of the difficulty is that many of the claimants in the residential school process are people who have little or limited access to banking support and whose ability to borrow money is not great. So when you find someone who is willing to lend you money, on the face of it, it appears attractive to get you through a difficult time while you’re waiting for your settlement to come in.”

He reminded us that “there have been ongoing class actions against a number of these kinds of lenders, not in the residential school context necessarily but in the payday loan context, over the legitimacy and validity of their interest rates.”

Online Producer / Ottawa

Before moving to become the APTN News social media producer, Mark was the executive producer for the news in eastern Canada. Before starting with APTN in 2009, Mark worked at CBC Radio and Television in Newfoundland and Labrador and Ottawa.

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