Coercive debt and financial abuse are prevalent in the operations of sex traffickers in Canada, with at least a quarter of survivors dealing with fraudulent debt. Julia Drydyk, the executive director of the Canadian Centre to End Human Trafficking, emphasized that awareness of this financial abuse needs to increase in order to address the issue effectively. Traffickers often put expenses associated with the trafficking in the victim’s name, making it harder to track from an anti-money laundering perspective. The debt incurred is then used as a tool to continue coercing, threatening, and controlling the victims. Victim Services Toronto reports that survivors have around $20,000 in fraudulent debt on average, with some cases reaching as high as $100,000, creating a significant barrier for survivors trying to rebuild their lives.
Survivors of sex trafficking face challenges in starting over, with safe housing being a crucial step in their recovery. However, the fraudulent debt left by traffickers poses a significant obstacle in accessing safe housing and rebuilding their lives. Kaitlin Bick, an anti-human trafficking specialist with Victim Services Toronto, highlighted that survivors often struggle with advocating for themselves against debt collectors while dealing with the trauma of their experiences. The Reclaim program, operated by Victim Services Toronto, advocates with creditors on behalf of survivors to eliminate fraudulent debt, achieving a 90% success rate in removing debt from credit reports. By partnering with creditors and financial institutions, the program aims to make it easier for survivors to rebuild their lives.
In 2023, Ontario passed Bill 41, the Protections from Coerced Debts Incurred in relation to Human Trafficking Act, to protect survivors from fraudulent debt. The legislation makes it illegal for creditors to collect coerced debt resulting from human trafficking, but a system is still needed to determine which cases meet the criteria. Saskatchewan also introduced similar legislation to amend existing laws and prohibit lenders from including coerced debts in credit reports or taking them into account when evaluating potential loans. Drydyk emphasized the importance of ensuring survivors have access to appropriate support and that their well-being and recovery are prioritized in any plans. However, the implementation of legislation varies across provinces, with some needing a strategy to address coercive debt.
The Reclaim program, operated by Victim Services Toronto, provides support for survivors of sex trafficking in dealing with fraudulent debt. By advocating with creditors and financial institutions, the program aims to remove fraudulent debt from survivors’ credit reports to enable them to rebuild their lives. Survivors seeking help with tackling fraudulent debt can access information about the Reclaim program through Victim Services Toronto’s website or by calling their Crisis Line. Furthermore, help is available nationwide through The Canadian Human Trafficking Hotline, providing assistance 24/7. Drydyk stressed the importance of providing survivors with access to economic justice as well as social and legal justice as they exit exploitative situations, addressing the root causes of trafficking.
Efforts are being made in some provinces like Ontario and Saskatchewan to protect survivors from coerced debt through legislation. The Protections from Coerced Debts Incurred in relation to Human Trafficking Act in Ontario and the Protection from Human Trafficking (Coerced Debts) Amendment Act in Saskatchewan aim to prohibit lenders from collecting on coerced debt and considering it in credit reports or loan evaluations. However, Drydyk highlighted the need for a comprehensive strategy to address coercive debt in all provinces to provide survivors with economic, social, and legal justice as they recover from trafficking. It is essential to ensure that survivors have access to the necessary support to navigate the complex system and prioritize their well-being in any plans moving forward.
