Some temporary residents do not pay their debts before leaving Canada

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There is no estimate of the number of non-permanent residents who leave Canada before paying their debts

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It all started with a Chinese language report on international students in Canada using their credit cards to the max on computers and clothing before leaving the country.

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This led to an investigation that uncovered a phenomenon involving some temporary residents of Canada who leave the country without settling their credit card debts, honoring their retail loan commitments, or honoring their auto payments.

George Lee, an immigration lawyer in Burnaby, has been aware of the problem of transnational consumer debt for years. He has been drawn into multiple lawsuits in which residents of Canada travel the world to find people who have left the country without repaying what they owe.

“This phenomenon has been going on for some time now. I have dealt with agreements or contracts like this. Sometimes a credit card company has to go after the person. But the person is in China or elsewhere. And the customer doesn’t have a lot of power to get them, ”says Lee.

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Although the veteran immigration lawyer has been hired to track down non-permanent residents of Canada who leave the country leaving behind debts, he has also read the issue in Chinese-language media and on social media platforms such than Weibo.

Lee, however, cannot estimate the number of non-permanent residents of Canada who leave the country before paying their debts.

“A lot of people don’t take (default) seriously. They might joke, “Maybe I’ll do that.” But I don’t have a percentage on how many are doing it. This is exactly what the selfish do. I think most people care about their financial credit reputation.

Lee, who travels frequently to China, said it is made more difficult to find people in faraway countries who are not paying their debts here because it is normally a civil matter and not a criminal offense, so that the police do not normally intervene.

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Immigration lawyer George Lee says many people don’t take defaulting seriously. Photo by Gerry Kahrmann /PNG

Articles in Chinese-language media describe international students doing luxury credit card shopping in Canada. The articles say they swipe their cards to buy computers, cellphones, clothing and cosmetics in Canada, which they often sell at low prices thanks to the underground economy. They hawk the goods, Lee said, either before they left Canada or after they returned to Asia.

Setty Pendakur, professor emeritus in planning at the University of British Columbia, is also aware of the default problem of some international students and other non-permanent residents, of whom there are more than 1.4 million in Canada.

“This has been going on for at least five years,” Pendakur said. When international students who waive their payments return to China, he said “their credit will be the same as before.” Since defaulters do not normally have a criminal record in Canada, he says “they’ll get away with it in China.”

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Pendakur, born in India, who has traveled to China over 86 times, helped shape the populated country through his work for the World Bank and as a senior adviser to the State Council of China, which is similar to the Privy Council of Canada. His knowledge of bad credit comes from conversations with Chinese friends and officials in China and Canada.

Many of the over 180,000 Chinese students studying in Canada (with 50,000 in British Columbia) come from affluent families and lack the grades to enter places such as SFU, Capilano University or Langara College, Pendakur said. A large proportion attend what he calls “private three-room universities” in Vancouver and elsewhere.

Like many higher education students, they are bombarded with credit card offers from companies looking for new affluent customers, Pendakur said. “I know at least seven young foreign students, under the age of 20, with three credit cards each. With a limit of $ 5,000 on each card.

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Crossing borders to avoid debt is part of a larger problem. The seven largest credit card issuers in the United States are now facing the highest level in nearly a decade of loans they never expect to collect. Yet most credit card companies are doing well on the stock market, and their competition for future high-end customers remains fierce.

Although consumer debt is rising in many countries, the Financial Times reports that Chinese millennials’ love of credit cards is particularly fearful of debt. With young people not following their parents’ frugal ways in China, the country has seen a 40% year-over-year increase in outstanding consumer loans – used for vehicle purchases, vacations, home renovations and home renovations. expensive household items.

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Aside from a central bank database that provides limited information, China lacks consumer credit data. While the average American consumer’s credit history goes back 14 years, financial specialists say credit information on most Chinese residents is only a few months old.

Yet Reuters News is among those who have reported that some students in China are being driven to suicide by the staggering interest rates and aggressive, sometimes violent debt collection techniques of new online lenders who target college campuses.

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Fenella Sung of Vancouver, translator and former Chinese-language talk show host, said she spent most of a year trying to get paid by a wealthy young man from China who used her language services to unsuccessfully request an extension of their permanent resident status in Canada. .

“The Canadian system,” said Sung, “simply has no effective way of dealing with those who want to come here temporarily, take advantage of our system for their own selfish gain and then move on.”

Lee, the immigration attorney, said collecting bad debts is never easy, but it is especially difficult to track down non-residents who leave the country. He advises Canadians who offer credit to young people to ask their parents first to stand surety.

As for anyone considering accumulating bad debt in Canada and then crossing an international border, Lee has some careful advice. “Who knows,” he said, “you may change your plans and want to come back. “

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dtodd@postmedia.com

@douglastodd


LISTEN: Vancouver Columnist Sun Douglas Todd and Realtor Gary Wong join host Stuart McNish to discuss the impact of foreign buyers on real estate prices in Vancouver and how they contribute to their communities as taxpayers and consumers spending in the local economy.

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