Alberta man with cognitive challenges given credit card, racks up $8,000 debt

An Alberta man with cognitive impairments racked up$8,000 in credit card debt, leaving his friend and advocate to ask how he was given the card in the first place.

Henry Herbst, who goes by the nickname Tigger, has an IQ of below 70. He lives independently in Whitecourt, Alta., with some supports from a non-profit society in the town.

For years, the arrangement seemed to work well and Herbst, 54, was able to keep on top of his rent paymentsand other bills. He receives about $1600every month from the province's Assured Income for the Severely Handicapped program.

Several years ago, Herbstwas signed up for a Canadian Tire Options Mastercard. His last bill listed his debt as $8,127.54. The minimum paymentwas set at more than $600, and the interest rate was 26 per cent.

"I think with Mr.Herbst'scognitive abilities he should never have got a credit card. He would never willingly have got it if he understood the ramifications," said Dennis Watson, a long-time family friend and advocate.

"I don't even think his reading ability is such that he could fill in the form by himself. I was mortified."

Herbstalsounderstands his debt had got out of hand.

"It's gone kaplooey. Now my card is way too high."

Debts build up

According to Herbst, he went to the local Canadian Tire store a few years agoand was asked if he was interested in a credit card. Herbst said he provided identification to a saleswoman who filled out the application form. He signed it.

"Then I had to wait one...two...three...Three weeks. Then it was in the mail," he said.

Herbst bought groceries, and booked his first trip, to see friends in Nova Scotia. He spent money on gifts and souvenirs, and a fresh cod dinner. He also started to borrow money on the credit card.

As time went on, the bills started to add up. And, according to Watson, Herbst's limit was increased.

By last November, Herbst was getting phone callsto repay the debt. That's when Watson learned of the situation and tried to work out a paymentscheme with Canadian Tire Financial Services.

Initially, the company would not budge.

"Obviously he got some benefit out of this. And so we're looking to cut the interest and give him payments that he can afford to make on his very limited government disability. They were not willing to do anything," Watson said last week.

One day after an inquiry from CBCNews, Watson saidCanadian Tire had agreed to a payment plan that Herbstcould afford, with no interest.

In a short email to CBCNews,a spokesman for Canadian Tire Corporation wrote that "this issue has been resolved."

Re-payment plan established

In Alberta, people with intellectual disabilities sometimes have friends or relatives who formally oversee and manage their finances. But not always.

A trustee is someone with authority to manage a person's investments and bills. But it can take up to six months for a trustee to be appointed by the courts. In the case of Watson and Herbst, their friendship has been enough for almost 40 years.

Herbstconsiders Watson to be his uncle, even though there is no official guardian or trustee relationship between them.Herbsthas no biologicalfamily with whom he is in contact.

But without a formal trusteeship in place, neither Watson nor the worker from the social service agency who helpshim with basic bill payments has direct oversight over his money and what he does with it.

"If there's nothing in place, the advocate can't make him do anything. He can talk to him, based on the relationship, the individual might listen he might not," said Meloney Patterson, executive director of Voice of Albertans with Disabilities.

Watson said Herbst's credit card is now destroyed. He called the settlement "extremely fair."

"It does give him the payments that he has to make but he did get benefit out of [the card]. So it's a really nice balance."

Still, Watson thinks peopletook advantage of his friend from the saleswoman who signed him up for the credit card, to whoever approved credit increases.

"For someone to purposely give him a credit card and then up the limit when he meets the [first] limit -- knowing he's on a disability pension is predatory, in no uncertain terms in my world, that's exactly what that is."