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Coercive debt and financial exploitation are increasingly recognized as integral tactics employed by sex traffickers in Canada, with research indicating that around 25% of survivors confront fraudulent debt created by their traffickers.
Julia Drydyk, the executive director of the Canadian Centre to End Human Trafficking, noted that a study conducted in 2020 highlighted how traffickers systematically place the financial burdens associated with trafficking directly in the victims’ names.
Even as awareness surrounding sex trafficking grows, the associated financial abuse remains less understood, prompting advocates to call for fundamental changes to address these issues.
“When debts are under someone else’s name, it becomes difficult to trace from an anti-money laundering standpoint,” explained Drydyk. “Moreover, these imposed debts are utilized as a control mechanism, reinforcing the power dynamics between traffickers and their victims.”
Fraudulent Debt Affects Survivors
According to Victim Services Toronto, one in four survivors of sex trafficking finds themselves burdened with fraudulent debts accrued in their names by traffickers, complicating their challenges in initiating a fresh start.
Kaitlin Bick, an anti-human trafficking specialist with Victim Services Toronto, shared insights about the devastating long-term financial implications these debts impose on survivors as they aim to rebuild their lives. Reports indicate that these individuals can carry an average debt of approximately $20,000, with some cases reaching up to $100,000.
This fraudulent debt can manifest in various forms, including credit card debts, loans from payday lenders, lines of credit, and even car loans.
“Finding safe housing is critical for starting anew,” stated Drydyk, noting that the financial burdens some survivors face present significant barriers to accessing stable living situations. Additionally, attempting to resolve issues related to fraudulent debts can trigger further trauma for survivors.
“Dealing with debt collectors while already managing overwhelming emotional trauma is unfair and incredibly taxing,” Bick commented, acknowledging the pain survivors experience. “It adds another layer of difficulty to an already complex situation.”
Bick highlighted efforts by Victim Services Toronto to facilitate the rebuilding process for survivors through their Reclaim program, a nationwide initiative dedicated to advocating with creditors on behalf of those affected by human trafficking to eliminate fraudulent debts.
“Increased dialogue and education about these issues will empower survivors to recognize that there are pathways to recovery,” Bick remarked.
Legislative Action Against Coercive Debt
In 2023, Ontario passed new legislation, known as Bill 41 or the Protections from Coerced Debts Incurred in Relation to Human Trafficking Act. This law prohibits creditors from collecting coerced debts resulting from human trafficking. However, a framework is still being developed to establish which cases qualify under this protection.
A spokesperson from the Ministry of Children, Community and Social Services indicated that regulations are being formulated to create mechanisms for survivors to seek relief from debts incurred through coercion or manipulation by traffickers. Once implemented, these provisions aim to alleviate the financial pressures that hinder recovery and reintegration into society.
Saskatchewan has also introduced similar laws with the Protection from Human Trafficking (Coerced Debts) Amendment Act, designed to strengthen existing legislation by preventing creditors from factoring coerced debts into credit evaluations or reports.
As provincial governments work toward actionable solutions, Drydyk emphasized the necessity of ensuring that survivors receive comprehensive support to navigate the complex systems surrounding these issues, prioritizing their well-being and recovery. However, she cautions that not all provinces have yet established complete strategies to tackle coercive debt.
“We often refer to trafficking as a low-risk, high-reward crime. Providing survivors access to economic, social, and legal justice is critical in addressing the root causes of these exploitative situations,” Drydyk concluded.
Survivors seeking assistance in managing fraudulent debts can explore the resources available through the Reclaim program at Victim Services Toronto or reach out for help via the Crisis Line at 416-808-7066. Furthermore, support is accessible across Canada through The Canadian Human Trafficking Hotline, operational 24/7 at 1-833-900-1010.
Source
globalnews.ca