It’s difficult to know who to trust with our children’s education savings.
That was why so many parents chose RESP’s. We believed it was a government savings account for our children’s future and their money was safe.
Now we learn that a parent in Quebec has launched a class action lawsuit against RESP companies when he found that he lost over $11,720 out of his $20,000 in deposits for enrolment fees (sales charges) charged by C.S.T. for two RESP plans he’d opened for his two kids RESP’s.
And that wasn’t the only time. These scandals (rip-offs) by RESP companies happen again and again.
Just look at this article in 2018 where other parents also lost a lot of money to sales fees that weren’t disclosed.
As if planning for our children’s futures isn’t complicated enough.
As a parent, I always thought my RESP was managed by the Government of Canada.
However, the lawsuit filed by the parent in Quebec has revealed that the RESP is not a Government managed children’s education savings account, it’s only a Government program administered by banks and group RESP companies who can charge our children’s education savings whatever sales and management fees they want.
And it adds up to billions of dollars a year in sales fees and management fees when you think that the RESP companies and banks manage over $60Billion dollars of education savings.
In 2018 Montrealer Qing Wang launched the lawsuit when he learned that he was charged $11,720 in RESP enrollment fees when he tried to terminate his children’s RESP. The fees represented 59% of the $20,000 he contributed to their RESPs.
In June 2021, a Quebec Superior Court approved that the class-action lawsuit against the companies can proceed against the following group RESP companies.
- Canadians C.S.T. Consultants Inc. and Canadian Scholarship Trust Foundation
- Kaleido Growth (previously Universitas Management) and Kaleido Foundation (Previously Universitas Foundation Of Canada)
- Knowledge First Financial (previously Heritage Education Funds Inc.) and Knowledge First Foundation
- Heritage Education Funds and Heritage Educational Foundation
- Children’s Education Funds Inc. and Children’s Educational Foundation Of Canada
- Global RESP Corporation along with Global Educational Trust Foundation.
The lawsuit includes all Quebec residents who signed an RESP contract on or after July 19, 2013, with any of the six firms named in the class action and were charged a fee that exceeds $200. Not $200 per credit which was how they present it to parents but over $200 in total sales fees and that pretty much represent every parent in Quebec who signed up for RESP with these companies.
According to Montreal lawyer Joey Zukran, the lawsuit could cover up to several hundred thousand parents in Quebec alone and up to several hundred million dollars in damages.
And that’s for Quebec only. Lawyers in Ontario and British Columbia are closely monitoring the situation.
You can learn more about the Class Action Lawsuit here.
As parents, we want security, transparency and simplicity when saving for our children’s futures.
Child Plan is a participating whole life insurance plan the fastest growing alternative to the RESP, and the ONLY tax-free education savings plan parents and grandparents can open for their children and grandchildren in Canada.
With Child Plan your child has complete freedom to use their plan for any education anywhere in the world without restrictions and even to buy their first house.
No strings attached!
Participating Whole Life insurance plans have been used to save for children’s future and education since 1847 (yes 20 years before confederation) without missing one annual dividend.
To learn more about Child Plan, request an illustration.
If information is power, then education is empowerment!
Child Plan – the fastest growing alternative to the RESP.