I am writing about one of the issues people deal with on a daily basis in my Credit Counselling world and that is...Collection agencies. You may have or you may know someone who has had dealings with these beings from another world. I am speaking of the typical tactics people experience when dealing with Collection agencies plus the legislated rules that the majority of people are not aware exist. Simply put, Collection agencies and agents get away murder (well not quite but you get my drift) when it comes to collecting money owed.
This applies to Canadian rules and regulations so please look up any laws in your Country or State when it comes to the Wonderful World of Collections(please insert Disney music). When it comes to finances, have you ever felt like this:
You have fallen behind with your payments to the point where the creditor has now sent the debt to a collection agency. The Collection Agency calls and the usual banter ensues:
Mr. Hasslebastle: "Am I speaking to Jane Moneytight"
Ms. Moneytight: "Yes, may I ask who's calling?"
Mr. Hasslebastle: "I'm calling on behalf of Bank of Money, you owe them $3,560.
Ms. Moneytight: "I know I do but it has been so difficult. You see my child got sick and I had to take time off work with no pay. The next thing is I lost my job and I am still waiting for Employment Insurance so things fell behind. I am trying..."
Mr. Hasslebastle: (interrupting) " Why don't you go to a bank and borrow the money or go to a family member? You know, If you give us $2.800 we will consider this debt paid"
Ms. Moneytight: "I tried going to the bank but they turned me down and my family doesn't have this money..."
Mr. Hasslebastle: "If you don't pay this amount owing by 5p.m. today, we will garnish your income! You better come up with this money or else!"
Ms. Moneytight: "I am trying to work with you, I can send you $100 per month?"
Mr. Hasslebastle: "Not acceptable! I better see this money or else."
Ms. Moneytight: (crying) "I'm trying the best I can. I have found it so difficult...please can you...
Mr. Hasslebastle: (interrupting yet again) " I am calling the courts to make sure we sue you.
He hangs up and Ms. Moneytight is left crying and in fear. This is typical, unfortunately, and also typical that people, like Ms. Moneytight have no idea of their rights.
What are their rights? Well here we go!
1. A collection agency must state who they are, where they are calling from and the amount you owe.
2. They must confirm they are speaking to the person who owes the debt. They can not speak to anyone else about your debt unless you give them written permission to do so. The collection agent can only say who he/she is and leave his/her number to call back.
3. The Collection agents all have registration numbers, so you can ask for their number and they must give it.
4. If all they do is call, you do not know, truthfully, who they are, they must send one of their form letters to confirm they are collecting on the debt.
5. They can call between 7am and 9pm but not before or after or on a Statutory holiday. They can call on a Sunday but only between the hours of 1pm and 5pm.
6. They can only call 3 times per week! If they talk to you, someone else or leave a voicemail, that does constitute 1 call.
7. If you give them your number but they continue to call you at work or any other number, it is considered harassment.
8. If they scream, yell on the phone, are demeaning or give misleading information, it is considered harassment.
9. They can not give excessive, undue or unreasonable pressure. (Insert laugh here since this is their norm)
They break these rules and regulations on a constant basis but you have rights! You can contact the Ministry of Consumer Services at www.sse.gov.on.ca. follow the links for Collection Agencies and make a complaint right on line if necessary. The Ministry must follow up each complaint. The Collection agencies can be find up to $25,000, they can lose the license to operate and the collection agent can lose their job. The last has certainly happened more than once.
Collection agents can make bonuses on top of their regular income which is an incentive....sad but true. How does one combat these calls?
1. Document every call! Get their name, registration #, where they are calling from and what was stated in the call. If you can tape the call-Tape the call and tell them that!
2. Never promise something you can't do no matter how obnoxious they become. If all you can pay is $5 per month, then don't promise $10
3. Remain as calm and business like as possible. If you can, talk like a Robot-Data like (for all Star Trek fans out there). Talk in the same monotone voice, say ""I am" or "I have" instead of "I'm" or "I've". Pronounce every letter ie: I am going to Toronto tomorrow" instead of "I'm goin' to Turono temorro". Collection agents are on the phones daily so they can sense fear in one's voice-don't let them sense it.
4. If you promise a certain amount, follow the call up with a letter to them and state how much you can send, in what manner and what time of the month you can send it and then stick to it! Send the money! Almost every single time, they take the money and, if they take it, they have accepted it.
5. Place, in the letter, where you can be reached and that you will keep them posted because they can't call any other number or it can be considered harassment.
6. If you actually get court papers, you have the right to defend yourself so go to the court house and file a defense with Small Claims Court. It costs $45 but you will stop any garnishments. If a hearing is set, you can show all the information including the payments you sent to them, the judge usually sides with you. If you are on Employment Insurance, CPP or Disability, they can't garnish your income.
Always be careful when someone calls saying they are a collection agent as there are many fraud cases out there who claim to be Collection agencies and they are not. I have had clients who have paid only to find out that the so-called collection agency is an empty lot. Make sure you have something in writing from their agency first before sending any payments. Remember, too, that there are always wonderful services like our non-profit agency that can help and assist.
This is lengthy but I felt the need to write this information since so many people are dealing with financial stress. Collection Agencies can become a real stress to many, many people. The more knowledge you attain, the better prepared you are.