Dozens of lives ruined after answering job ad

Countrywide operates like a franchisor, attracting investors that it calls "partners," who pay $12,000 to start their own small cleaning companies under the trademark name…Today, both cleaners and former partners who lost money are convinced they were duped by a sophisticated job scheme that preys on low-paid workers and the unemployed, many of them immigrants, and profits from lax consumer and labour protection laws in Ontario.

The Toronto Star
July 28, 2007

Dozens of lives ruined after answering job ad
Janitorial company's founder acknowledges problems regarding refunds to cleaners but says they've been fixed
Rita Daly

When Douglas Adams walked out of the offices of Countrywide Maintenance Systems Inc., he thought he had a cleaning job and a ticket to a stable future.

Instead, that day in 2005 sparked a chain of events that ended with no job, no money and nowhere to turn for help.

He had paid $7,500 – his life savings plus money borrowed from a friend – for work that never materialized. Devastated and destitute, Adams thought he was alone. But Countrywide, a Mississauga-based web of janitorial companies, has left a trail of debt and broken dreams stretching back to 2001.

Twenty-one individuals and families, tracked down by the Star, told near-identical stories of how they answered an employment ad, signed a contract with Countrywide, paid the business up to $12,000 for the promise of steady work, then lost their investment.

In desperation, many turned to small claims court. In Brampton alone, Countrywide companies have been sued at least 45 times since 2002, mostly unsuccessfully.

The experience has left the cleaners bitter and resentful. But as upset as they are with Countrywide, their greatest distress is how little anyone else has cared.

In the past five years, they have complained about Countrywide to the province's consumer protection branch, the Ontario Labour Relations Board, Industry Canada, Toronto and Peel Region police, the Better Business Bureau, Mississauga politicians, the bank where Countrywide does its business, the newspapers that have run the ad (which include the Star) and, finally, the courts.

Not one fully investigated, dismissing each complaint as a contractual dispute.

Countrywide operates like a franchisor, attracting investors that it calls "partners," who pay $12,000 to start their own small cleaning companies under the trademark name. They're supposed to find cleaners or "subcontractors" like Adams, who currently pay an administration fee equal to three times the amount they wish to earn monthly.

Today, both cleaners and former partners who lost money are convinced they were duped by a sophisticated job scheme that preys on low-paid workers and the unemployed, many of them immigrants, and profits from lax consumer and labour protection laws in Ontario.

Countrywide president Thomas Morrissey said in a recent interview there is nothing illegal or unethical about how his business operates. He acknowledged past refund problems but said changes he made a year ago make it easier for cleaners to get their money back.

Last week, Morrissey was again in court fighting a refund claim. He filed a notice of appeal after a Brampton small claims court judge this month ruled he was "personally liable" for a couple's loss of $9,630 paid with a Visa card in 2005 for cleaning jobs they never got.

In his ruling, Justice Ian Latimer said Morrissey "negligently misrepresented" the way his group of companies operates, noting the husband, Premkumar Seenivasagam, has difficulty understanding English and was not told that while one Countrywide corporation was signing him up, another was getting his money and was obliged to find him cleaning work.

"The facts of this case cry out for relief as it would be unfair and unjust if Countrywide Systems and Morrissey could wash their hands of the entire affair," Latimer wrote.

ONTARIO HAS a host of laws designed to protect its citizens against illegal or unethical business practices in and outside the workplace. The Consumer Protection Act, for instance, makes it an offence to deceive consumers. The Employment Standards Act guarantees low-wage employees a minimum wage and statutory benefits. And the province's franchise law, called the Arthur Wishart Act, is supposed to protect franchisees from fraudulent or unfair practices and root out questionable franchise operations in the booming service industry of restaurants, retail and cleaning.

But the Countrywide story raises questions about how useful the laws are, how well they're enforced and ultimately who they protect.

Advocacy and labour groups have long warned that years of inattention to an increasingly unregulated workforce, where according to Statistics Canada one in three jobs is temporary, part-time, contractual or independent due to a decade of corporate outsourcing, would yield an underclass of workers unprotected by minimum government standards and exploited by illegal, unethical or unscrupulous employers.

"We've moved into this increasingly competitive environment where more and more ingenuity goes into finding out ways of operating businesses without incurring responsibility for people," said Osgoode Hall law professor Eric Tucker, an expert in labour and employment law.

Many workers today fall in a grey area beyond the protection afforded such traditional concepts as consumer, employee or franchisee: Paying to get work – as Adams did – doesn't merit the same protection as paying for a condo or car repairs. Likewise, workers who are self-employed or independent contractors don't net the same protection or benefits as an "employee." And while Countrywide denies it is a franchise operation subject to regulations, there is no entity set up to police the industry under Ontario franchise law.

While some Countrywide cleaners were given no work, others said they did receive a few odd jobs but nothing approaching the total amount promised in their contract. So labour-intensive was the work, they earned about $6 to $7 an hour, less than the province's $8 minimum wage and what Morrissey said is Countrywide's $15-an-hour policy. As "subcontractors" they had no legal job protection anyway, no paid public holidays or sick days, no health or pension benefits.

They had to purchase their own cleaning supplies, in some cases from a Countrywide company. Some had to buy or lease a vehicle.

"I no longer know who to complain to and, unfortunately, the government isn't doing much," said Adams, who paid his $7,500 fee, including GST, to Countrywide on July 6, 2005.

The 38-year-old forklift operator moved to Canada from Ghana in 1991. About to lose his job in a company layoff and desperate to find work, he paid the required "administration fee" to Countrywide.

It was a lot of money, but he had no reason to doubt the company's integrity. During an interview with Morrissey, Adams signed a contract promising $2,336 a month in cleaning jobs for three years, about $30,000 a year. The contract, also signed by Morrissey, guaranteed a refund if work wasn't offered within 120 days.

Four months went by with no jobs. When he called for a refund, he was repeatedly put off or his calls weren't returned. Finally, Countrywide told Adams to go to court.

He filed a claim in April 2006. In February, Adams won an $8,300 judgment, including court costs and interest, in Brampton small claims court. Adams was confused to learn the judgment was not against Morrissey but against a "partner" he had met only once. (Morrissey's company retains 50 per cent ownership of all partner companies, but the partners sign contracts accepting full liability.)

Adams, who lives in a cramped apartment on the second floor of an inner-city house, still hasn't received his money and continues to struggle with debt. He lived off his credit card for months after losing his forklift job and his savings to Countrywide. Eventually he landed a job, driving a forklift again.

"I have not recovered from that loss and the financial troubles it got me into. That was all the savings I had."

THOMAS MORRISSEY, founder and president of Countrywide Maintenance Systems, oversees a complex network of incorporated cleaning companies as seemingly impressive as it is confusing. Some cleaners lost after suing the wrong Countrywide entity – court and corporate records indicate more than 50 related cleaning companies have been incorporated since 2003.

A former real-estate broker and franchisor who owned the province-wide Countrywide Real Estate Group before selling to Prudential in 1998, Morrissey, 60, is a burly man who easily turns on the charm and, according to cleaners and partners, delivers a convincing sales pitch about the big money to be made scrubbing office and factory floors. He can just as easily tell them to get lost. He and his core staff frequently tell unhappy cleaners seeking a refund to "go to court."

On any given day you can watch people come and go from the Countrywide offices on Tranmere Dr., in a barren industrial park in Mississauga, north of Highway 401. It's here that people come for an initial interview with Morrissey, usually after spotting an ad offering cleaning contracts worth $1,000 to $10,000 per month.

Countrywide's office is also where those who sign up come for training. Cleaners' training consists of watching an hour-long video. The partners' training involves being escorted to a few surrounding businesses and shown how to give a cleaning quote.

Eventually though, the Tranmere office becomes the focal point of anger by cleaners and partners alike demanding their money back. Some say they return many times without success.

This continual procession must by now seem routine to Morrissey, who formed the first of his cleaning companies in 1999. There's Countrywide Gleam Masters Inc., Countywide Maintenance Systems Inc., Countrywide Admin Inc., Countrywide Janitorial Supplies Inc., not to mention Countrywide Financial Services Inc. and Countrywide Mortgage Services Inc., moneylending firms to which Morrissey's white Cadillac is leased.

In addition, Morrissey says there are currently 22 partner-operated Countrywide cleaning companies.

Several former partners interviewed by the Star said they complained to Morrissey that they couldn't find enough jobs for the cleaners, and that by the time the cleaners demanded a refund Morrissey had depleted the partners' bank accounts with an array of charges including a $500 basic monthly fee plus advertising, administration, insurance, bonding and secretarial service fees. One partner was alarmed to see more than $1,000 a month coming out of his account. All said they lost money in the venture.

Morrissey shrugs off queries about the number of lawsuits and complaints. "We have a lot of very happy subcontractors (cleaners) out there, believe it or not, who do a great job," he said, adding hundreds have been given their guaranteed amount of work and more.

He agreed to provide names, but failed to do so.

In an earlier interview he said his company's multi-layered "partner" and "subcontractor" structure was adopted in part because "pride of ownership is a big motivator."

Morrissey said no partner has ever complained to him personally – although several told the Star they had complained, and at least one sued Morrissey – nor does he bear any responsibility for the troubles they run into with cleaners. If cleaners did not get refunds, he said it's because they refused jobs, did a poor job cleaning or the partner failed to refund the money. If former partners are complaining they lost money in the business, he said it's because they didn't work hard enough to find jobs for the cleaners.

Morrissey insisted each partner's company is independent, yet he exercises extensive control. His office handles all the training, accepts all payments from businesses for any cleaning carried out and co-signs the cleaners' paycheques. It also has authority to withdraw money from each partner's business account; the partner doesn't.

Although partners are supposed to find cleaners for their business, Morrissey often signs cleaners up onto their company. He immediately takes a 10 per cent to 30 per cent cut, and then expects the partner to find the promised amount of jobs or pay the full refund. (He said his cut is now a flat 20 per cent.)

In Adams's case, Morrissey signed the contract on behalf of a partner named Anna Begovska and her company, Countrywide 24/7. Adams and Begovska met once, at his video training weeks later.

Four months later when Adams asked for a refund, the Countrywide office said Begovska had his money. He also received a letter from Begovska, though signed on her behalf by Countrywide's office manager, saying his money would be refunded in six to eight weeks. It didn't happen.

Tracked down at her Mississauga apartment, Begovska looked at the letter and denied ever seeing it or allowing anyone to sign on her behalf. "First, this is not my signature; second, I never see this letter."

The letter would never have been sent without her authorization, Morrissey countered.

Begovska acknowledged Adams's money was deposited into her company bank account, but said she couldn't access it and that the Countrywide office kept withdrawing $500 a month in fees.

She spent much time, gas and money but could not find Adams any cleaning work, she said. She stopped looking when lung cancer forced her into treatment.

Begovska, the mother of a 4-year-old girl, said she was too sick to attend Adams's court hearing in February. Morrissey attended, however, and the letter was seen by the judge as proof Begovska, not Morrissey, had Adams's money.

An $8,300 judgment was awarded against Begovska, who died last month. The claim against Morrissey was dismissed.

The Workers' Action Centre, a Toronto worker-based organization, and Parkdale Community Legal Services are filing claims with the labour ministry and the courts on behalf of seven cleaners who received work from Countrywide, but earned less than minimum wage and the amount of promised jobs. They will argue they are employees entitled to protection under the Employment Standards Act.

Following queries by the Star, the Better Business Bureau conducted its own investigation and last month revoked the membership of four Countrywide companies.

The Star has not run any Countrywide ads since last October.

The devil is in the loopholes

Covers: Mediates complaints between consumers and businesses in Ontario. Covers collection agencies, credit repair, consumer reporting, loan broker fraud, car repairs, renovations, door-to-door sales, health clubs, modelling contracts and condos.

Loophole: Does not address contractual disputes involving fees paid for the promise of work, considered a business dispute.

ARTHUR WISHART ACT (Franchise Disclosure – 2000)
Covers: Franchisors must provide full financial disclosure to franchisees, including a list of franchisees that closed in the previous three years, or pay a refund.

Loophole: There is no regulatory body to enforce the act, no rules governing contractual relationships and no penalties. Franchisees can demand a refund for no disclosure, but their only recourse is to go to court.

Covers: Sets minimum workplace standards in Ontario, including the current $8 minimum wage, eight paid public holidays, vacation pay and termination pay.

Loophole: To be covered, a person must be deemed to be an employee, not a self-employed person, franchisee or independent contractor.

Covers: Federal legislation defines what is an act of bankruptcy, who may file for bankruptcy, the role of a trustee and the repayment of debts.

Loophole: There is no regulatory agency to police the law

Risks: Small Claims Court no solution, Police can’t/won't investigate losses less than $250,000, Franchise law being ignored, Canada: white-collar crime haven, Can't afford to sue, Immigrants as prey, Sold during time of psychological vulnerability, especially u, Canada, 20070728 Dozens of

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