Dealing with Collection Agencies
Posted by Gail | Filed under Credit Wise
If you’re behind in your payments, no doubt you’ve been getting a few calls from collection agencies. I’ve received letters from people who have completely stopped answering their phones because they can’t stand the calls. Hey, if there are people to whom you owe money, your “creditors” have a right to try and collect that money. Even so, there are definite rules that collection agencies must follow. If you know what collectors can and can’t do, you’re in a better position to deal with them.
The legislation governing collection agencies is provincial, so the rules are slightly different from one provance to the next. I’m using the Ontario rules as my examples.
Collection agencies can’t start calling until they’ve notified you in writing that they’ve been assigned to the account. I’ve received more than a few complaints from people who say that some agents won’t say who the creditor is or how much is owed. They aren’t allowed to do this. And if you claim to not owe the money, they can’t demand payment from you unless they have proof that you do owe the money.
Collection agencies aren’t allowed to harass you. Believe it or not. That means they can’t call and abuse you verbally or call you so often as to make you crazy. What constitutes harassment? Agents can’t contact you by any means including phone, voicemail, or e-mail more than three times in any seven-day period on behalf of the same creditor. They’re not allowed to call on a statutory holiday, on a Sunday before 1 p.m. or after 5 p.m., or on any day before 7 a.m. or after 9 p.m. And they may not contact your friends, relatives, neighbors or employer for any information other than your address or telephone number.
Feel like you’re being harassed? Keep a record of the time, date and frequency of the calls your receiving. Remember each call for a separate debt is considered a separate call, so if an agency calls you six times in a day for six different bills that have gone to collections, they’re not offside.
The best way to deal with a collection call is to speak to the agent straight-up and professionally. Remember, they’re doing a job, and no matter how much you hate the job they’re doing, they’re just people like you. The sooner you pay the bill, the sooner you’ll make the collector go away. Can’t pay the bill off all at once? Explain why and offer some alternative method of repayment, like a series of monthly payments. Follow up in writing and make sure you send a good-faith payment.
Do I actually have to say that you should never ever send cash. You need to have some proof of payment; a canceled cheque or a receipt from the collection agency works fine.
Don’t let them bully you. Yes, some do try. You don’t have to make any commitment you don’t think you can keep. And you should only say yes to things you’re actually going to do. Saying yes to get them off the phone just means they’ll step up their calls. Ignoring a collection call won’t make the problem go away. If a collector gives up on trying to work out a plan with you, they’ll simply take the next step, which is legal action. And judgements against you show up on your credit history, and stay there for a looong time.
One question I get quite often is this:
“Do I have to deal with the collection agency or can I deal with the company I owe the money to directly?”
I have some bad news for you. Once the account has been turned over to an agency, they are the only ones you can deal with. If you try to contact the original creditor, you’ll just create confusion. The exception: if there’s an error in the account you need to deal with both the creditor and the collection agency, and you should do it in writing so you have a paper-trail.
January 14, 2009 at 9:06 am
What a timely post… although my husband and I have been solvent for many years (not always in our foolish and fancy free youths, but we learned our lessons!) we have recently received a gargantuan bill from 407, which I’m 100% sure is in error, but they won’t send us any paperwork beyond an ever increasing bill. I don’t know how to prove to them that we didn’t drive that car on that highway 10 years ago. They are threatening to send it to collections if we don’t pay at least 25%. Obviously I want to protect the credit rating we have worked hard to build, but it really burns me to pay something we don’t actually owe. I’m tempted to pay this portion just to get them off our backs. Does anyone know if it will reflect poorly on my husbands’ rating if we make this deal? Or does anyone have any tips on dealing with the 407 people? We have had numerous circular conversations, but never get anywhere, despite asking for supervisors etc.
January 14, 2009 at 9:25 am
I have in the past had a cell phone bill that i thought I had paid off (and cancelled) go to “collections”. I first noticed when I got my credit report (the debt wasn’t on there) but a collection agency had accessed my report and I had no idea why since I was current on all my accounts. LAter, when they finally did contact me, I called Bell to see what the heck was going on and I was able to pay off my bill directly and not through the collection agency. Do some companies have internal agencies? I was able to do that again with one of those mail order CD companies back in the 90’s. So although I had been contacted through a collection agency, I’ve never actually paid one off, always paid the creditor directly, and my credit report is as clean as a whistle.
January 14, 2009 at 9:29 am
I don’t know about ten years ago, but I would suggest showing up at the 407 centre on Steeles if possible. The reps can pull up the pictures of the plate capture to verify if the bill was correct. I had to go there to dispute a double bill when they charged me separately for the car and an attached trailer. In my case, once the rep saw the pic was indeed a trailer, she waived the fee.
Good luck.
January 14, 2009 at 10:13 am
I post here regularly, but have tight rules on writing work-related blog, so I changed my name this time around. I work in collections for a large credit card company, and from my time there, I have some tips to make the painful, not so painful. I am not from a collection agency, but you would likely hear from in-house collections before you’d hear from a collection agency.
* Be nice. It sounds stupid, but being nice can vastly improve your situation when dealing with collections, or anyone in general. Someone is more likely to try and go out of their way to help you out if you are nice to them, than if you are yelling and screaming. That is more common-sense than anything. And be honest, are you mad at the collector themselves, or just mad at the financial situation you’ve put yourself in?
* Let collections know what’s going on. Different types of collections sometimes have programs available depending on how far in debt you are. It can be awkward to tell a complete stranger what’s going on, but they are trained to work with that information, and figure out a solution for you.
* Be honest. If you promise you are going to send a payment and you don’t follow through, the calls will just start coming in again. If you can’t make the minimum for another two weeks, just tell them that.
I guess these things just seem more common-sense than anything now that I write them out, but it’s not suprising how often they are not followed. If you are in collections, try following those guidelines, and you might be suprised at how far a couple of manners could benefit you.
January 14, 2009 at 10:23 am
psychsarah… I also agree with Arthur. Deal directly with the 407 directly at the centre on Steeles Ave. They will treat you better as you are actually showing up and not talking to them over the phone. They are reasonable if you do show up. Make sure you bring proof that you didn’t drive the car.
January 14, 2009 at 12:43 pm
psychsarah… that sucks. I hope that the suggestions here from Arthur J and Emiliano work. Btw is it for your plate number or someone elses? Good luck.
January 14, 2009 at 1:03 pm
Great advice guys… I’m wondering if anyone could answer a question for me. I recently gained full benefits at my workplace and they were supposed to be paying my provincial medical bills (the monthly installment). They paid the first one, then not the second one. I called the benefits centre and was told it was sorted out by my call, then received another bill the next month. This went on for three months, every time I would call my benefits centre and be assured that “this time” it had been sorted out. I didn’t realized that after only three months the province would send me a collections notice! I was surprised because I have ALWAYS paid on time. I called my benefits centre again and this time it did get sorted out, as well as calling the province and ensuring that the collections action didn’t go through. It all ended well. However… I’m wondering what impact this has on my credit rating? Does any kind of collections involvement instantly mean you have a mark on your record? Or can they go back and erase things that result as a misunderstanding? Just wondering as I have always maintained a spotless credit record otherwise, and I dont’ really want to pay for a credit report just to check this. Thanks!
oh, and Gail – great info here! I had no idea that there were limitations on the calls creditors can make to you. I have one friend who needs this information (well, they need ALOT of your information…)
January 14, 2009 at 1:35 pm
Lea:
You can obtain a free credit report relatively easily. On each of the credit agency websites, there is an option to send in a mailed request (they ask for a few pieces of ID, to prove you are who you are the correct person) and have them send you a report in 8 to 10 weeks.
January 14, 2009 at 5:40 pm
Excellent advice from Gail and all of you.
Lea – you probably have already been doing this, but just in case you don’t when reporting discrepancies with companies, creditors, etc. try the following:
- Document the date/time of the call, who you spoke to, what was said and get a reference number.
That way when they make another mistake you can refer to these details. It tends to cut through some of the red tape and get them to ‘really’ correct the error. And if this feels like too much of yet another ‘job’ to be on top of these irritating problems, consider it like ‘watering a plant’. Helps you detach your emotions from the situation a bit.
Good luck!
January 14, 2009 at 5:56 pm
As far as I can recall for collection agencies in Ontario, you can ask that they only contact you in write. They are also not allowed to harass your other family members: parents, siblings, etc. I believe they can contact them only if they are co-signers.
I suspect that we will see a lot of bankruptcies this year, unforunately. People still don’t know or ignore where to turn to get help.
January 14, 2009 at 10:39 pm
Thanks for the tips everyone-now I have to decide if its worth taking a day off work-I live a few hours away from the 407 office. It was a charge on a plate that we possessed at one point in time, but not at the time when they say the charge was made. In fact, the plate did not exist at the time that they say the charge was incurred. It’s absolutely crazy-making!!
January 15, 2009 at 9:54 am
Hi, I recently was told by a friend that a large communications company sent a PERSON to her house to collect the $62.00 she owed them. Can they do this?
January 15, 2009 at 10:35 am
This is interesting, as I have a similar story about collections agency and Rogers. My husband had a phone with Rogers and an unpaid bill of $700.00 and it went to collections. We made and fulfilled a 5 month payment plan with the collections agency. Recently, we requested our credit reports be sent to us free by mail (it took about 2 weeks to receive) and his credit report is showing the collections agency’s notes about the debt being paid but Rogers is showing it as a bad debt still outstanding. I am wondering if this is a problem that occurs frequently when the debt is settled with the agency and not the original company? Any insights would be appreciated as the debt was settled over a year ago and it’s affecting his credit horribly. Thanks!
January 16, 2009 at 3:44 pm
The EXACT SAME 407 thing happened to us!!! And we were able to clear it up without too much problems.
Here’s what happened to us
The actual charge was for less than $10, on a plate belonging to a car we then traded in, and we subsequently moved, so we never got any bills for that charge. For almost 10 years that charge accrued interest that we knew nothing about. We had a new 407 account on our next car. It took them almost 10 years to realize we were the same people. And of course we never clued in, assuming that they would have the technology to check an account holder name to see if they exist on the system with different plates (apparently not). They are administratively challenged over there! When we got this massive bill and freaked out, we called and spoke to a managerial type person who explained they have a ‘good faith’ plan for instances where this happens – obviously it’s not rare. We had to request all the bills, once they sent us all the bills we paid a certain percentage, then they credited us all the rest, on our current account. So we did have to pay something – I think about $90, but in the end our $300+ bill was cleared and the $90 minus the original charge of something like $7 was credited to us. So it’s possible to deal with, but it did take a lot of calls and paperwork.
January 16, 2009 at 3:46 pm
PS to the 407 story – the huge drag is that they couldn’t cash us the rest of the good faith payment, so we can ride the 407 free for probably years, since we rarely use it
I don’t think there’s an actual formula over there for dealing with stuff, you just have to work it out on a case-by-case basis with a person – and being kind and polite really does help in these situations! It was a mistake all around, and not really anyone’s fault (except for whoever is in charge of their business process).
January 18, 2009 at 6:27 pm
My husband and I used to live with a whole bunch of people. As they left, by and by we became the payer of the phone bill. I only got a call from one person regarding the debt of one of the people who had left… I’ll call her Sally. He asked if I was Sally. I said no, she moved out a month ago. He asked if I knew her new address. I said no. He asked AGAIN if I was Sally. I said, nope, not Sally. Never heard from him again.
… It was a very odd experience.
April 21, 2009 at 9:30 am
Three years ago i had a rogers cable account with some roomates. When we decided to all move out i called and had the account cancelled and paid off the account and returned the cable boxes. The funny thing is that about a month agoi recieved a call from a collections agency telling me that i have an oustanding bill because i did not return the two boxes?! they want a receipt showing it was returned but that was 3 years ago? And the fact that this has been sitting on my credit for 3 years burns me to. Any suggestions on what i should do about this to get this off my credit? and who i should call??
NEED HELP!!!!!!
November 3, 2009 at 5:49 am
[...] the collection calls, there are rules about when and how often a collection agency can call. Read this. Lisa wrote: Okay, my husband and I make good money (130,000)annual. I have been giving the [...]
January 13, 2010 at 1:51 am
I have paid off a debt owed in full to a collection agency and they are refusing to report my payment to equifax and they tell me they are going to send me a letter of release so i can report it myself but it has already been almost a month and i still havent recieved the letter…i thought they were lying about sending it since it shouldn’t take this long to get it in the mail..so i spoke to a “manager” there today who said he would email me the letter of release later today…well the email never came either so now that really makes me believe they just lie about anything just to get you off the phone…is this legal for them to refuse to report my payment to equifax? I also asked them to email me something stating they have sent out the letter of release so i have proof of the letter being sent in writing, which they also didn’t do for me…where do i go from here?..how can i force them to provide proof of payment?
January 13, 2010 at 7:23 am
Dee: There is information online that you should read: http://www.gs.gov.nl.ca/cca/tp/collection-agencies/
If you want to make a complaint, you can here:
Trade Practices and Licencing Division
Confederation Building, West Block, 2nd Floor,
P.O. Box 8700
St. John’s, Newfoundland and Labrador
A1B 4J6
Tel: (709) 729-2660
Fax:(709) 729-3205
Email: info.gsl@gov.nf.ca
Or online here: http://consumerinformation.ca/app/oca/ccig/main.do?language=eng
February 10, 2010 at 12:00 pm
Hoping someone can help me with this question…
In Ontario, once an account is sold to a collection agency does interest continue to accrue at the same rate as the original debt or does the interest stop all together?
July 14, 2010 at 10:29 am
This site states that if you do not deal with a collection agency the next step that the creditor will take is going to court. I was too stubborn to go bankrupt when my affairs had an abrupt turn for the worse. I could not pay anything for two years and I had collection agencies calling me literally continuously. No amount was for over 10K mind you. However, what happens in real life on the accounts I had experience with (CIBC, BMO and similar) after the agency fails to collect they go away and a few weeks later a NEW agency calls on the same debt. This can go on literally for years. I even had BMO get a judgement against me in small claims (I was not even in the country when they ’served’ me!!). I have been through three (!!) collection agencies with them since and NO collection agency has ever been told that there is a judgement outstanding. One needs to recall that most consumer debts are very small and the cost to collect is very high. Frequently, however much they harass you there is little incentive for the creditor to go to court. So…if you don’t like an agency (watch out for CollectCom and TCR!) just don’t pay they will go away. When you get someone you can deal with, do a deal with them if you can. Unfortunately, good front line staff at collection agencies vanish fast. Also, another point, if you have a strong will – go through an agency or two and you will start to get ’settlement’ offers – do not accept anything under 50% off. If they are not offering 50% wait for another agency. Obviously, these are aggressive tactics and assume that a) you would like to pay and b) you can not pay the debts as they stand and c) you do not wish to go bankrupt. Always remember the agencies get paid a commission (a large one) for results and you owe them nothing, zip, de nada. If the original creditor chooses to put you in collection and not deal/settle with you that is THEIR choice. Make a budget and stick to it – it will help when these people call. Look for humour too – some collections people will tell you the strangest things – so just laugh. IF they really harass you, send them a letter about what their front line person said/did. This sometimes makes an agency go away for months! Remember, in Canada, if you are in collection your credit is RUINED so take your time, follow your budget and keep smiling. Also remember, just because you are paying an agency they do not report this to the credit bureau! So…even if you are paying your credit score is not positively impacted.
Good Luck!