Fraud victim compensation program is costly but money isn’t going to victims

In the auditor general's spring report she found one person received $50, 000 in compensation, while the cost to operate this fund was over $1 million. Courtesy: Quebec National Assembly

If you’ve been the victim of fraud you can apply to Quebec’s financial watchdog for compensation, but don’t get your hopes up you’ll receive any cash.

A recent report discovered the authority paid 24 times more in administrative costs than it actually paid out to victims.

High-profile cases of fraud — like the Ponzi scheme masterminded by Earl Jones to swindle seniors out of their life savings — are still fresh in many Quebecers’ minds.

READ MORE: Earl Jones victims to receive class action settlement cheques

In 2004, a government authority was created to help victims financially with a special fund.

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“The fonds is there to compensate people who were victims of fraud. That’s the law,” explained Quebec’s auditor general, Guylaine Leclerc during a news conference on Wednesday.

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Except in 2015/2016, only one out of 34 claims was paid out. In the auditor general’s spring report she found one person received $50, 000 in compensation, while the cost to operate this fund was more than $1 million.

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The Autorité des marchés financiers (AMF) acknowledges its compensation plan is too restrictive.

“You can ask for compensation only in the year that you know that there is a fraud,” Leclerc gave as one example.

This 12-month deadline is ironic considering in a large percentage of cases, it took the AMF more than 600 days to process them.

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An AMF spokesperson, Sylvain Theberge, told Global News, “A lot of requests are automatically refused…Our will is to see the compensation plan expand and to be able to give more money to victims of fraud.”

In order for that to happen, the government needs to relax the rules around who is eligible for compensation. The government says they will table a bill within the next two weeks.

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