In a letter addressing 176 collection agencies in Ontario the Registrar of Collection Agencies appears to be making a change in the way Collection Agencies in Ontario can do business.
In the past collection agencies in Ontario and their lawyers have been successful at collecting money from debtors with “draft” statement of claims. This tactic was effective because it is inexpensive and scary to most people that don’t know any better.
A statement of claim is a court document you must complete and register with the court to start a legal proceeding against someone.
Usually the drafted claim is accompanied by a letter typed on a lawyer’s letterhead and signed by the lawyer. The covering letter will often suggest that the debtor has 10 days to pay their debt by certified funds otherwise a Sheriff may serve the claim upon them. The consequences of a judgement are usually spelled out and it often includes wages being garnished, bank accounts seized and your other property being seized or sold.
“Draft” statement of claims are frightening to people in debt because they look like an official court document suggesting the debtor is about to be sued; but in reality they aren’t worth the paper they are written on because they aren’t registered with the court and in draft form only. It’s basically an empty threat.
At Total Debt Freedom we negotiate a reduction in our client’s debt by 40-70% so we often deal with collection agencies and their attorneys when settling a debt. Draft statement of claims have been a huge concern for many of our clients and we have seen every possible version used. In our experience, only a very small portion of statement of claims sent to debtors are ever actually registered with a court, the majority are in draft form only.
Brian Pitkin, the registrar of the Collection Agencies Act in Ontario states “the practice trades on the expectation that debtors will be unknowledgeable about court processes, and interpret the “draft” statement of claim as a greater commitment to pursuing the matter in court then actually exists; it relies on the debtors not recognizing that the document enclosed with the demand letter is little more than a boiler plate with little investment in time and thought”.
Pitkin finds this collection tactic objectionable and stated that “the practice of enclosing a draft statement of claim is both deceitful and misleading”
This issue is clearly on his radar screen and he warns that further complaints on the matter could result in an order to the collection agency to stop under subsection 2 of section 21 of the Collection Agencies Act by the Registrar himself.
Will the practice of draft statement of claims stop? Maybe; collection agencies are crafty and may find a way to continue using a modified version of these effective collection tactics.
Dealing with collection agencies can be quite stressful if you are unfamiliar with their collection tactics. If you are using a debt help company be sure they are competent enough to differentiate misleading and deceptive collection tactics from the real threats.
Showing posts with label Bill Collectors. Show all posts
Showing posts with label Bill Collectors. Show all posts
Tuesday, November 4, 2008
Thursday, October 30, 2008
How Facebook Can Get You in Serious Trouble with Bill Collectors
We recently discovered that bill collectors are using popular social networking sites like Facebook and Myspace to dig up very personal information on people in debt.
Recently a bill collector from a collection agency purportedly discovered new employment information published on a Facebook profile they didn’t originally have. Soon enough collection calls and threats of garnishing wages followed at this individual’s place of employment.
It’s probably a good idea to set your social networking profile to “private” in all areas, if a bill collector learns something about you through a social networking site you have no one to blame but yourself for publishing it.
Anyone with a Facebook profile is familiar with status updates; we had a bill collector contact us as we were in the midst of negotiating a massive reduction in an unsecured debt for our client. The bill collector discovered our client was boasting in their status update that they were “thrilled to have a new home”. The bill collector interpreted this as a home purchase; our client was actually intending to tell their friends that they rented a new apartment.
Their argument then became: Why should we take a settlement on our debt if the debtor has money to buy a home? Needless to say it had a crippling effect on our negotiations with that particular creditor and stalled our progress in finalizing a settlement.
Be careful with the internet. If you are using social networking sites, make sure your profile is kept private and keep those nosey bill collectors out of your personal life.
Recently a bill collector from a collection agency purportedly discovered new employment information published on a Facebook profile they didn’t originally have. Soon enough collection calls and threats of garnishing wages followed at this individual’s place of employment.
It’s probably a good idea to set your social networking profile to “private” in all areas, if a bill collector learns something about you through a social networking site you have no one to blame but yourself for publishing it.
Anyone with a Facebook profile is familiar with status updates; we had a bill collector contact us as we were in the midst of negotiating a massive reduction in an unsecured debt for our client. The bill collector discovered our client was boasting in their status update that they were “thrilled to have a new home”. The bill collector interpreted this as a home purchase; our client was actually intending to tell their friends that they rented a new apartment.
Their argument then became: Why should we take a settlement on our debt if the debtor has money to buy a home? Needless to say it had a crippling effect on our negotiations with that particular creditor and stalled our progress in finalizing a settlement.
Be careful with the internet. If you are using social networking sites, make sure your profile is kept private and keep those nosey bill collectors out of your personal life.
Wednesday, May 14, 2008
How to Stop Collection Calls
Harassing collection calls when you owe debt can be a nightmare. People tell me all the time how relentlessly the phone can ring when they owe money. There is a way to minimize this and actually stop it in most cases.
Adopting these techniques is also effective in stopping the horrible telemarketers that call you every evening offering windows, doors, lawn care and the like.
The first thing you must understand is most collection agencies, telemarketers and banks have adopted predictive dialing systems for making outbound calls. They are highly effective because each agent doesn't have to manually dial a number each time they call out. Instead they will hire 300 collectors for every 1,000 lines that are dialed out. The computer actually dials more numbers then agents available to take the calls. This minimizes time spent dialing numbers and getting disconnected numbers or no answers.
The way it works is when the computerized dialer recognizes a human voice on the receiving end of the call, it immediately connects the call to the first available bill collector. Sometimes there is a delay in the connection because the collectors are busy wrapping up another call, which is why you can sometimes end up saying "hello" several times before you talk to a human.
Your first step you should take is ordering a call privacy feature from your phone company. This feature essentially prompts the inbound caller with a message like "the person you are trying to reach does not accept calls from unknown or private numbers, please state your name before we attempt to connect you". The computer isn't able to state a name so the call drops and the call is not connected. Your phone doesn't even ring.
This feature is offered by almost every phone company and goes by names like: call privacy, anonymous caller ID or anonymous caller rejection. I have looked at several phone providers' websites and the price seems to range from $2/m to $5/m.
The other preventative step you should take is a telezapper. I have tested this myself and they work well. This is a device you attach to your phone. Essentially when you or your answering machine pick up it detects a predictive dialer calling and it plays a tone that tricks the dialer into believing your telephone number is disconnected. The predictive dialer removes the number from its calling list to limit wasting its calling resources at a later date. It is a very effective tool for $39.99 on the telezapper website; I got mine off eBay for $15.
Since the majority of the debt collection calls you will receive are made by a predictive dialer, you will stop collectors and even telemarketers in their tracks. I am not advocating hiding from your payment obligations to your creditors, but adopting these tips will let you fight back and at least give you an opportunity to minimize the collection harassment while you work out a debt elimination strategy.
If you need help getting out of debt, take 15 minutes and get a free consultation from our debt settlement specialists by calling (866) 833-1992 or fill out the form on our website at http://www.totaldebtfreedom.ca to learn more about debt settlement.
Adopting these techniques is also effective in stopping the horrible telemarketers that call you every evening offering windows, doors, lawn care and the like.
The first thing you must understand is most collection agencies, telemarketers and banks have adopted predictive dialing systems for making outbound calls. They are highly effective because each agent doesn't have to manually dial a number each time they call out. Instead they will hire 300 collectors for every 1,000 lines that are dialed out. The computer actually dials more numbers then agents available to take the calls. This minimizes time spent dialing numbers and getting disconnected numbers or no answers.
The way it works is when the computerized dialer recognizes a human voice on the receiving end of the call, it immediately connects the call to the first available bill collector. Sometimes there is a delay in the connection because the collectors are busy wrapping up another call, which is why you can sometimes end up saying "hello" several times before you talk to a human.
Your first step you should take is ordering a call privacy feature from your phone company. This feature essentially prompts the inbound caller with a message like "the person you are trying to reach does not accept calls from unknown or private numbers, please state your name before we attempt to connect you". The computer isn't able to state a name so the call drops and the call is not connected. Your phone doesn't even ring.
This feature is offered by almost every phone company and goes by names like: call privacy, anonymous caller ID or anonymous caller rejection. I have looked at several phone providers' websites and the price seems to range from $2/m to $5/m.
The other preventative step you should take is a telezapper. I have tested this myself and they work well. This is a device you attach to your phone. Essentially when you or your answering machine pick up it detects a predictive dialer calling and it plays a tone that tricks the dialer into believing your telephone number is disconnected. The predictive dialer removes the number from its calling list to limit wasting its calling resources at a later date. It is a very effective tool for $39.99 on the telezapper website; I got mine off eBay for $15.
Since the majority of the debt collection calls you will receive are made by a predictive dialer, you will stop collectors and even telemarketers in their tracks. I am not advocating hiding from your payment obligations to your creditors, but adopting these tips will let you fight back and at least give you an opportunity to minimize the collection harassment while you work out a debt elimination strategy.
If you need help getting out of debt, take 15 minutes and get a free consultation from our debt settlement specialists by calling (866) 833-1992 or fill out the form on our website at http://www.totaldebtfreedom.ca to learn more about debt settlement.
Wednesday, March 12, 2008
Bill Collectors - The 7 Biggest Lies Exposed
1. I am from the Legal Department and you are being sued. From my experience less then 2% of all debts listed to a collection agency ever result in formal legal proceedings and in most cases legal costs required to initiate a lawsuit have to be advanced by the collection agency. From a business perspective, it makes no sense to throw good money after bad hoping to recover the legal costs and the debt if you do not have enough assets available to satisfy the judgment being sought after. It's just not worth it to the collection agency. Bill collectors use the "legal department" threat only because it is scary and most people don't know better. The fact is that most bill collectors sit in a tiny 3"x 3" cubicle and pretend to be someone they really aren't on the phone.
2. I am going to garnish your pay cheque. In order to get any piece of your pay cheque, the bill collector needs a judgment from a court in their favour but the collectors will not seek a judgment unless they have reason to believe that you have enough assets to satisfy a judgment. Pursuant to Section 7(2) of the Wages Act (Ontario), no more than 20% of your wages may be garnished. A creditor can bring a motion to increase the amount of wages that may be garnished but a debtor also has the right to bring a motion to have such amount decreased. I have heard Collectors tell people they will garnish 50% of their pay but the truth is that even if they get a judgment, garnishments rarely exceed 15-20% of pay. Again they only use the threat because it scares people and most don't know any better.
3. If I don't have payment by 4 p.m. today, we are (Insert threat here).Bill collectors are paid a commission to do their job and so are the managers that are breathing down their necks in order to hit their targets. Some aggressive bill collectors can make six figures annually if they push people hard enough. They will tell you anything if they feel that it will result in a payment and a bigger commission cheque for them.
4. Pay in full, monthly payments are not an option.They want full payment from you because they make more money off you when you pay in full. Payments are always an option; in most cases going directly to the creditor will get you a monthly payment plan. It won't fix your credit but you will at least be able to stop the demand for full payment.
5. Collectors can call you as much as they like. Pursuant to Section 22(6) of R.R.O. 1990, Regulation 74 to the Collection Agencies Act (Ontario), there are restrictions on the frequency of calls that collection agencies can make to you. Despite what they may tell you a bill collector cannot harass you. If you register a letter requesting the collection agency to communicate with only in writing the calls should stop otherwise you can escalate their behavior to their ombudsman or provincial ministry to take further steps.
6. Collectors can call and harass your family, friends and neighbours. A collection agency can only contact a third party to confirm your home address and telephone number or your employer to confirm your employment, title and business address; that's it (Section 22(3) of Regulation 74 to the Collection Agencies Act). If the collector divulges details about the debt or tries to embarrass you, there are steps you can take to deal with and stop this behavior.
7. Bill collectors can talk to you any way they feel. Bill collectors can be obnoxious and rude; many think that insulting people will get the debt paid. Collection laws prevent this type of behavior reoccurring if you escalate it and deal with the issue. If you feel that they have mistreated you by using profanity, intimidating or coercive language, you can certainly stop it. They will most certainly deny the activity so a tape recorded conversation or voice message will be your best friend here.
Collection agencies and bill collectors have a bad reputation because they are a business like any other whose goal is to generate profits for its shareholders; its their job to push you hard to pay. There are ways to deal with the debt and their behavior but it takes time and a certain investment in researching your rights. Try not to avoid the debt but find a way of dealing with it. The only way to stop the collection activity is to pay the bill or go bankrupt. If you can pay the bills in full, do so as soon as possible.
If payment of your bills is not an option due to extreme financial hardship, you may wish to explore bankruptcy by consulting with a Trustee in your local yellow pages. Going bankrupt will most certainly deal with the debt but since it's detrimental to your credit rating, it should only be used as a last resort. Also, a Trustee is a court appointed agent for your creditors so even though you pay them for their service, the Trustee is looking after your creditors' best interests. Your debts are wiped out but so are most of your assets subject to certain limited exceptions and your credit report shows the effect for 7-10 years.
Debt settlement should be considered as an alternative to bankruptcy since it is quickly becoming one of the newest and best options in Canada to retire debt quickly and ethically. A debt settlement company will act as your agent, and negotiate a settlement with your creditors. Once the settlement is paid, the balance is written off and your credit report is updated to reflect that the debt is finalized. The time frame to settle debt can be anywhere from 1 month to 36 months depending on your ability. This is often the least expensive, least damaging to your credit and the fastest path to debt freedom.
Remember that bill collectors make a living off of trying to scare and intimidate people so they can earn a big commission cheque. Consider the source when they call and don't let bill collectors push you around, you have rights and can fight back and win!
2. I am going to garnish your pay cheque. In order to get any piece of your pay cheque, the bill collector needs a judgment from a court in their favour but the collectors will not seek a judgment unless they have reason to believe that you have enough assets to satisfy a judgment. Pursuant to Section 7(2) of the Wages Act (Ontario), no more than 20% of your wages may be garnished. A creditor can bring a motion to increase the amount of wages that may be garnished but a debtor also has the right to bring a motion to have such amount decreased. I have heard Collectors tell people they will garnish 50% of their pay but the truth is that even if they get a judgment, garnishments rarely exceed 15-20% of pay. Again they only use the threat because it scares people and most don't know any better.
3. If I don't have payment by 4 p.m. today, we are (Insert threat here).Bill collectors are paid a commission to do their job and so are the managers that are breathing down their necks in order to hit their targets. Some aggressive bill collectors can make six figures annually if they push people hard enough. They will tell you anything if they feel that it will result in a payment and a bigger commission cheque for them.
4. Pay in full, monthly payments are not an option.They want full payment from you because they make more money off you when you pay in full. Payments are always an option; in most cases going directly to the creditor will get you a monthly payment plan. It won't fix your credit but you will at least be able to stop the demand for full payment.
5. Collectors can call you as much as they like. Pursuant to Section 22(6) of R.R.O. 1990, Regulation 74 to the Collection Agencies Act (Ontario), there are restrictions on the frequency of calls that collection agencies can make to you. Despite what they may tell you a bill collector cannot harass you. If you register a letter requesting the collection agency to communicate with only in writing the calls should stop otherwise you can escalate their behavior to their ombudsman or provincial ministry to take further steps.
6. Collectors can call and harass your family, friends and neighbours. A collection agency can only contact a third party to confirm your home address and telephone number or your employer to confirm your employment, title and business address; that's it (Section 22(3) of Regulation 74 to the Collection Agencies Act). If the collector divulges details about the debt or tries to embarrass you, there are steps you can take to deal with and stop this behavior.
7. Bill collectors can talk to you any way they feel. Bill collectors can be obnoxious and rude; many think that insulting people will get the debt paid. Collection laws prevent this type of behavior reoccurring if you escalate it and deal with the issue. If you feel that they have mistreated you by using profanity, intimidating or coercive language, you can certainly stop it. They will most certainly deny the activity so a tape recorded conversation or voice message will be your best friend here.
Collection agencies and bill collectors have a bad reputation because they are a business like any other whose goal is to generate profits for its shareholders; its their job to push you hard to pay. There are ways to deal with the debt and their behavior but it takes time and a certain investment in researching your rights. Try not to avoid the debt but find a way of dealing with it. The only way to stop the collection activity is to pay the bill or go bankrupt. If you can pay the bills in full, do so as soon as possible.
If payment of your bills is not an option due to extreme financial hardship, you may wish to explore bankruptcy by consulting with a Trustee in your local yellow pages. Going bankrupt will most certainly deal with the debt but since it's detrimental to your credit rating, it should only be used as a last resort. Also, a Trustee is a court appointed agent for your creditors so even though you pay them for their service, the Trustee is looking after your creditors' best interests. Your debts are wiped out but so are most of your assets subject to certain limited exceptions and your credit report shows the effect for 7-10 years.
Debt settlement should be considered as an alternative to bankruptcy since it is quickly becoming one of the newest and best options in Canada to retire debt quickly and ethically. A debt settlement company will act as your agent, and negotiate a settlement with your creditors. Once the settlement is paid, the balance is written off and your credit report is updated to reflect that the debt is finalized. The time frame to settle debt can be anywhere from 1 month to 36 months depending on your ability. This is often the least expensive, least damaging to your credit and the fastest path to debt freedom.
Remember that bill collectors make a living off of trying to scare and intimidate people so they can earn a big commission cheque. Consider the source when they call and don't let bill collectors push you around, you have rights and can fight back and win!
Subscribe to:
Posts (Atom)
