Monday, November 23, 2015

The Wonderful World of Collection Agencies

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.

52 comments:

  1. Good information. I've heard horror stories about these.

    ReplyDelete
  2. Hi, dear Birgit! This is an excellent time to post these facts and tips because the holidays put a strain on the budget. Phone pros who work for collection agencies realize that few people they call know their rights and even fewer are bold enough or have the time to work the system and stand up for those rights.

    Thank you for a very informative post on an important subject, dear friend BB!

    ReplyDelete
    Replies
    1. Thank you and it is a time since people are spending now

      Delete
  3. Good info. I've never had to deal with them personally, but I've had them call my home asking if I know someone. I know nobody and nuttin'. I can't believe that is even allowed.

    ReplyDelete
    Replies
    1. Oh...they will try and often. I have heard them say they are looking for their childhood friend and the person then gives away the phone #. It is misleading info which they are not supposed to do but they do it

      Delete
  4. I once managed a jewelry store and was responsible for collecting on delinquent accounts. It was terrible, and to think people don't need jewelry to survive.

    ReplyDelete
    Replies
    1. Imagine if you were just a collection agent? Many take the job and then leave because it is not a nice job at all.

      Delete
  5. You make that really clear. I bet a lot of people you have counselled have good reason to be thankful to you.

    ReplyDelete
    Replies
    1. Thank you very much. I like to educate

      Delete
  6. If they started yelling at me I'd just turn off the phone and block them lol not that I have cause to have any after me, so if I get a call I'll know it's the parking lot fraudsters

    ReplyDelete
    Replies
    1. Oh yes, hanging up is fine but they have so many different numbers they call from that it is hard to block them.

      Delete
  7. Many years ago I got messed up with credit and started getting harassed by collection agencies. I wanted to work with them but they weren't willing to help much. I eventually got everything cleared up and they left me alone until...

    At some point I started getting calls about my ex-wife and even her boyfriends. It was annoying but I was able to get them off my back. I guess my ex and her exes were using my address and phone number or something for their credit accounts. I'd get one collector straight on the deal and they'd stop the calls, but then another would start up. They haven't bothered me for many years now.

    Arlee Bird
    Tossing It Out

    ReplyDelete
    Replies
    1. This is so typical and I bet you anything you have something legislated that you could have looked up to stop this harassment. Also, in Ontario, if the person has no recognised the debt (made a payment) in 2 years and the collection agency has not taken the person to court, the Statute of Limitations to take a person to court, is ..2 years. After that, all a collection agent can do is huff and puff but they can no longer take a person to court.

      Delete
  8. I used to do some of this collecting from hospitals who are notorious about buying medications and then not paying maybe I should say not being able to pay. Not a very pleasant business to be involved in, on either side.

    ReplyDelete
    Replies
    1. No you are so right because the person who does the collecting will also get threats and be treated horribly by people who have not paid. It is not good to try to collect either unless you have the stomach for it...and some do and relish in it

      Delete
  9. I did hear that some collection agencies pay on commission, that's why the aggressive tactics. I am glad there are laws with what they can and cannot do, albeit there are some who don't follow the laws and take matters into their own hands.

    betty

    ReplyDelete
    Replies
    1. They make commission, bonuses and once, I saw a report, where if they met their quota for the month they were going to win a trip! This was a few years ago and the collection industry has taken a nose dive since then in the amount of money they can make. I have heard from clients, especially women, where they were told they (collection agent) can take their children away. They threaten that what the person did was fraud and end up in jail or they can "go to Bridge St and work it off" (This is a street in Niagara Falls notorious for prostitutes).

      Delete
  10. You're great for spelling this out, Birgit. Only an insider, and an honest, caring one, would be so helpful. Thank you. I hope I don't have to apply this info, but you never know.

    Happy Thanksgiving week.

    ReplyDelete
    Replies
    1. Thank you-Yes people need to know this information even if it means to tell someone else about it

      Delete
  11. Ooh, good to know.
    Thanks for sharing! :)

    ReplyDelete
  12. Great post, Birgit. A few years ago I received a letter from a "collection agency" that said I had gotten a parking ticket in Orlando, and because I hadn't paid it, it had been turned over to the agency. I wrote a very assertive letter to them stating that I had not been in Orlando, and they had to provide evidence, including copies of the ticket and photos of my car. I never heard from them again. I'm sure they weren't a collection agency.

    Love,
    Janie

    ReplyDelete
    Replies
    1. You are probably correct-scary isn't it how they try and many do fall for this

      Delete
  13. My cousin's son is a "Repo Man." He once told me how he had to repossess a family's furniture ON CHRISTMAS EVE! When, aghast, I asked him how he could do that, he said he told the kids that he was Santa Claus and was taking the furniture back to the North Pole to get fixed.
    Heaven help me, it wasn't funny, but I laughed.

    ReplyDelete
    Replies
    1. Oh my goodness. I can say that is just wrong but if he is a repo man they have to get the stuff but I could not do that.

      Delete
  14. Its surprising the types of conmen that use clever rhetoric to gain your confidence and I've been fooled by the best. One guy who I thought was acting in my best interests turned out to be a double agent, LOL.

    ReplyDelete
    Replies
    1. Yikes! People can be devious in all sorts of ways

      Delete
  15. Good for you for posting this. I'm sure it will help a lot of people. I've thankfully never been in that situation, but I've heard horror stories.

    ReplyDelete
    Replies
    1. I feel that if someone who reads this can pass it along then it can help someone else-you never know who will confide in you

      Delete
  16. Wow! That is quite interesting, especially that frauds might claim to be collection agencies. Thanks for visiting my blog. I just returned from an art week you would have enjoyed. One artist I met makes wonderful collage papers that she incorporates into her work. Her papers made me think of your cards!

    ReplyDelete
    Replies
    1. This is why written confirmation is a must. The art week sounds great and I love to see collages. I am going to the One of a Kind show this Sunday

      Delete
  17. I went through this kind of nightmare after my first husband died when I was 27. What a mess. I had two small kids and no money to even pay the funeral. But I eventually was able to settle some of the bills and paid what I could when I could and some even wrote off the bills after I sent them letters with a copy of the death certificate but I dreaded when that phone rang at night. Ugh. This was before the laws about debt collection calls were passed.

    ReplyDelete
    Replies
    1. Yes, it can be such a nightmare and so very, very stressful. I have had clients who had to deal with the death of a spouse and the decrease in income. The stress of losing someone you love is hard but add young children and finances and that is just too much. Glad you were able to work out of that dilemma.

      Delete
  18. Great post, Birgit. We all need these tips and advice. Getting something in the mail from collection first is really good to know.

    ReplyDelete
    Replies
    1. Oh yes-always! I had one person who was receiving calls and threats that he panicked and paid. A couple of months later another collection agency called and he informed them that he paid it. The collection agent listened and believed he was scammed and informed him what to do. He was scammed and when the police got involved, it turned out to be an empty lot in Texas!

      Delete
  19. This is excellent advice for anyone caught in the credit nightmare. Decades ago, after hubby and I both lost our jobs in the same year, we experienced some of these tactics. I researched the law to find out what our rights were and we straightened everything out, but it took quite awhile.

    ReplyDelete
    Replies
    1. Glad you researched because so many people don't and don't even know where to begin. What you had to deal with is difficult and I have had so many people lose their jobs (one couple on the same day as they moved into their new home and they both worked at different jobs) due to the word "restructuring" that I know dislike that word intensely.

      Delete
    2. That sure is a sad story about the couple and the new home. Yes, "restructuring", "downsizing", whatever you want to call it is always traumatic.Good thing there are people like you to help those in need of good advice, Birgit.

      Delete
  20. I think it's great that you're offering this resource because you're right - people don't always know their rights, and are often too cowed by these people to think of it. Glad to know you're fighting the good fight.

    ReplyDelete
    Replies
    1. Thank you. Yes many have no idea and I believe in education and that knowledge is power

      Delete
  21. This is great information Birgit! I've heard horror stories about how some collection agencies resort to threat tactics to scare people into paying. And I've heard of them being so hateful and mean on the phone. People should definitely know their rights when it comes to dealing with collection agencies and you've done a great job here educating. Great post.

    Michele at Angels Bark

    ReplyDelete
    Replies
    1. Thank you very much and what you have heard is pretty much spot on sadly so

      Delete
  22. People will take advantage at every turn! Great info, girl!

    Happy Thanksgiving, even though you're Canadian! Ha ha ha. Canada needs a neighbor, right? God bless!

    ReplyDelete
  23. Never miss one payment on a credit card here in the US because the next day Amazon will call you asking why you were late. They will start calling at eight in the morning on Sunday, and then you get a late charge of 35 dollars. They are less aggressive than in the old days, but I remember people who were late on credit cards in the 90s here in the US had some pretty scary calls. One time the man just hung up because he did not have the money to pay, and the collector called back and literally said "Well we will start right where we left off," in a scolding voice. They are not allowed to do that here anymore. However, I have just decided I am done with credit cards, and will only buy what I need and can afford. No big Christmas spending for me.

    ReplyDelete
    Replies
    1. The secret is to pay on time. I use my credit card for everything and they pay me 2% back on things like gas, medications, and groceries and 1% on everything else. I just got my annual refund of $382. Don't know if they do that in the States.

      Delete
    2. Haha, an American credit card company give back money :). Well if you use your card a lot here you might get a 25 dollar credit, but that was when I had charged several thousand dollars. I even put my root canal because I did not have dental insurance, but I have since paid that off.

      Delete
  24. What a helpful post! I am going to pass it on to a friend who could really use this advice and will hopefully have a good idea what to look up in his area. Thanks! :)
    ~Jess

    ReplyDelete
  25. Excellent info... and right up my alley.... well, sort of. I deal with white collar crimes, mainly fiscal where everyone is innocently treading the fine line between evasion and avoidance! :)
    x Asha

    ReplyDelete