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Alberta Court Dismisses Pseudolegal Debt Elimination Scheme

In Gacias v. Equifax Canada Co., the Alberta Court of Queen's Bench summarily dismissed a claim against Equifax Canada, a credit reporting agency, in which the plaintiff claimed that Equifax had improperly reported his debts. The plaintiff sought for Equifax Canada, which produced a credit report for the plaintiff, to "expunge" or "remove" allegedly inaccurate information in his credit report, and the plaintiff also sought information from Equifax pertaining to the underlying debt, which the Court found that Equifax did not appear to have. The crux of the claim was the plaintiff's claim that he had "arranged" or "settled" his debt with an unnamed "Private Creditor".

The Court found that on the face of the claim it appeared that the plaintiff had subscribed to an "Organized Pseudolegal Commercial Argument" (OPCA), specifically the "Three/Five Letters" OPCA debt elimination process sold by the "Get Out Of Debt Free" UK website, which previous courts had considered. The Court adopted a previous definition of OPCA schemes as:

"...ideologically driven litigation...from persons who subscribe to and employ pseudolaw, a set of legal-sounding but false concepts that are marketed commercially by "gurus". These purport to provide free money, "get out of jail free cards", and allow one to ignore legal obligations. ...Pseudolaw promoters claim it is the true, superior, but concealed, law. In reality, pseudolaw has no positive effect whatsoever. It is nonsense."

The Court found that the plaintiff's claim contained hallmark features of OPCAs, including that he demanded that all debts be proven by a "wet ink signature", and challenging that he had any debt liability because his debts may have been sold. The Court held that these similarities with the "Three/Five Letters" rendered the claim abusive on its face. The Court held: "The Three/Five Letters is one of the OPCA schemes which is so notoriously bad that simply employing these concepts creates a presumption that a person is engaged in abusive bad-faith litigation for an ulterior purpose".

Pursuant to Alberta Civil Practice Note 7 (which is similar to other summary processes to deal with abusive claims, like Ontario's Rule 2.1), the Court summarily struck the claim, finding that the claim on its face was unmeritorious, abusive, and had no prospect of success.

This decision is helpful for any organizations in the retail lending business who encounter debtors attempting to employ similar schemes in legal proceedings, as the Court helpfully reviews the extensive body of caselaw that has developed in this space, and provides a roadmap for striking such abusive claims.