Many visitors to hoyes.com are experiencing problems with collection agencies. While there are rules and regulations in Ontario that govern the behavior of collection agencies and their agents, we still hear from clients some particularly worrisome stories.
Hints of Legal Action
Collection agencies have been warned by a Registrar with the Ministry of Small Business and Consumer Services Debt Recovery Regulation Unit to stop using the “trick” of sending “draft” legal documents with their cover letters and claims to people they were contacting. These draft legal documents made it appear that the collection agency was just about to initiate legal action against the person receiving the letter – the truth was it was a simple computer template designed to scare people into making payments.
The letter from the Registrar goes further and warns collection agencies using lawyers to ensure that the lawyers comply with all of the legal requirements and restrictions placed on the collection agencies themselves. That means the lawyers must clearly disclose who they have been retained by (who they are working for). For example, just stating that they are collecting for Visa is not sufficient, the letter must state if the lawyer is working directly for Visa or for a collection agent. Similarly, the lawyers are not permitted to attach “draft” Statements of Claim that give the impression that a lawsuit is pending. Again this trick is designed solely to scare people into making payments.
Not Disclosing Who They Are
Many collection agents fail to mention the fact that they are a collection agent working on behalf of someone else. When they call they simply tell you they are calling on behalf of “Big Bank” Visa. The impression they give is that all of your dealings with the bank are in jeopardy and that if you don’t clear things up immediately the bank will take actions against you. Well, the bank has already taken action – they’ve assigned the debt to a collection agency. The collection agency is in fact supposed to advise you in writing BEFORE they start calling that the bank has assigned your debt to them. In fact this written notice must say:
- who they are and a statement that the creditor asked them to collect the debt
- who the creditor is that they are contacting you about
- the amount of money you owe.
Providing A False Sense of Urgency
By law collection agencies are not allowed to use undue, excessive or unreasonable pressure to encourage you to make a payment. Many collection agencies will tell you over the phone that if you don’t make a payment by “Friday” they are going to garnishee your wages. Well, in order to garnishee someone’s wages the agency first must take you to Court. This involves opening a file at the Small Claims Court and you will receive a notice from the Court. Once you receive the Court notice you have 3 weeks to respond. After that it takes another few weeks to obtain a Court Order – none of this can be done quickly, certainly not by Friday.
Using Impolite or Rude Behaviour
This is probably the thing that gives collections agencies such a bad reputation. Many of the people in the industry think that by yelling at you, by degrading an insulting you, that by making you feel guilty about your inability to pay they can motivate you to give them some sort of payment. Never, ever let these people get under your skin. Never, ever yell back at them or become impolite yourself. If someone is treating you in an unprofessional manner on the phone politely inform them that you don’t have to listen to them and end the phone call.
If you have experienced actions from collection agencies that you think breaks Ontario regulations, contact Consumer Protection Ontario to file a complaint.
Stop the Calls: Eliminate the Debt
Having said all of that, the truth is if you have collection agencies calling you and sending you threatening letters then it’s time you spoke to a professional about dealing with your debts. Collection agents only contact people that are having payment problems – if you are experiencing this kind of problem then you should probably contact one of our professionals for a free initial consultation. 80% of the people that contact our office don’t need to file bankruptcy – they just need to talk to someone knowledgeable that can point them in the right direction to deal with their debts.