This webinar is brought to you by
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for community workers and advocates who
work with low-income and disadvantaged
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About our presenter…
Margaret Capes, B.A. (Hons.), LL.B., M.Ad.Ed, is Legal Education
Coordinator of Community Law School (Sarnia-Lambton) Inc. She also
acts as Review Counsel for Community Legal Services, as an adjunct
professor in the clinical law program, and as faculty advisor for Pro Bono
Students Canada and the Dispute Resolution Centre, all at the Faculty of
Law, University of Western Ontario. She is the former Executive Director
of Community Legal Assistance Sarnia.
Hot Topics in
Consumer Protection
Collection Agencies
Regulating Collection Agencies
• Governed by the Collection Agencies Act.
• Regulated by the Ministry of Consumer Services
• Notorious for abusing people in debt
• The most common complaint received by the
Ministry
2009, Community Law School
(Sarnia-Lambton) Inc.
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Why People Get into Debt
• General financial setback such as loss of
employment
• Poor repayment habits
• Lack of money-management skills
• Overspending
• Dissatisfaction with a product or service
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(Sarnia-Lambton) Inc.
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Communication is Key
• Most creditors want to talk to the consumer
• Creditors are more likely to work out a payment plan
if they can discuss the matter with the consumer
• Consumers who do not cooperate often find their
accounts turned over to collection agencies.
• Once this happens, the best opportunity for a
reasonable repayment schedule has already been lost.
2009, Community Law School
(Sarnia-Lambton) Inc.
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What is a Collection Agency?
• An independent business that attempts to collect
debts on behalf of others
• Must register with the Ministry of Small Business
and Consumer Services before starting business
• “What You Need to Know about Collection
Agencies” brochure available on the Ministry’s
website
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(Sarnia-Lambton) Inc.
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Exceptions to the Collection Agencies Act
• The Act only regulates third-party debt
collectors
• Regulated/licensed professions are exempt:
•
•
•
•
•
Lawyers
Licensed Insurance Agents
Registered brokers
Credit unions and banks
In-house collections agencies such as Ford Motor Credit
or GMAC
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(Sarnia-Lambton) Inc.
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When the Collection Agency
Comes Knocking
• If the consumer agrees that the debt is owed:
• Contact the collection agency and, if possible, pay the debt
• Deal only with the agency when making payment
arrangements
• If immediate payment is not possible, contact the agency to
explain and to discuss alternative payment arrangements
• Confirm payment arrangements in writing
• Get a receipt for all payments (cancelled cheque, written
agency receipt)
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(Sarnia-Lambton) Inc.
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If the Consumer Disputes the Debt:
• Immediately notify the collection agency and the original
creditor of the mistake, in writing
• Explain the error in the amount owed and why you don’t owe
it
• Follow up to confirm that the debt has removed from your
record
• Never make a payment if there is a genuine dispute over the
amount owed
• A collection agency may not continue to demand payment
once it knows the consumer disputes the debt
2009, Community Law School
(Sarnia-Lambton) Inc.
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Consumer Rights and
Prohibited Collection Practices
•
The Collection Agencies Act identifies prohibited practices for collection agencies,
including:
• A consumer must be notified in writing at his or her when a creditor
assigns their account to an agency for collection
• A collection agency may not start legal action to collect a debt without first
notifying the debtor of the intention to do so
• Before a collector demands payment, the debtor must be given enough
information to ensure him or her that the account information relied upon
by the collector is correct
• Neither the collection agency’s charges, nor the creditor’s charges to
retain the agency, may be added to the consumer’s debt, and neither the
agency nor the creditor may collect or attempt to collect them from the
consumer.
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(Sarnia-Lambton) Inc.
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Prohibited Collection Practices, Cont.
• A collection agency may not communicate with a debtor using any means
by which the cost of that communication may become payable by the
debtor.
• A collection agency may not attempt to collect any amounts in addition to
the amount owed by the debtor to the creditor.
• A collection agency may not make telephone calls of a nature or frequency
that constitutes harassment. This includes repeated calls to a consumer’s
workplace.
• A collection agency may not imply or give false information in an attempt
to collect a debt, and may not use threatening, profane, intimidating, or
coercive language with a consumer.
• A collection agency may not contact a debtor more than three times in any
seven-day period.
2009, Community Law School
(Sarnia-Lambton) Inc.
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Prohibited Collection Practices, Cont.
• Collection calls may only be made between the hours of 7:00 a.m. and 9:00
p.m., Monday to Saturday, and between the hours of 1:00 p.m. and 5:00
p.m. on a Sunday. Collection calls may not be made on statutory holidays.
• A collection agency may not contact a consumer if it is notified by
registered mail that it is to communicate only with the consumer’s lawyer.
• A collection agency may contact someone other than the debtor only if the
person being contacted has individually guaranteed to pay the debt and the
contact is in respect to that guarantee, or if the contact is for the sole
purpose of obtaining the debtor’s home address or telephone number.
2009, Community Law School
(Sarnia-Lambton) Inc.
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Prohibited Collection Practices, Cont.
• A collection agency may contact a debtor’s employer only if:
• The employer has guaranteed to pay the debt;
• The contact occur only once and for the sole purpose of confirming
the debtor’s employment; or
• The contact is regarding payments pursuant to a wage assignment
given to a credit union or an order or judgment made by a court in
favour of the collection agency.
• Consumers should note that there is no regulation specifying the
length of time for which an account must be overdue before it can
be turned over to an agency for collection
2009, Community Law School
(Sarnia-Lambton) Inc.
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Collection Agency Harassment
•
There are a number of avenues open to a consumer who
believes that he or she has been harassed by a collection
agency, including:
•
Investigation by the Ministry of Small Business and Consumer
Services: If a consumer believes that a collection agency has
violated the Collection Agencies Act, they should contact the
head of the agency. If the agency does not resolve the matter to
the consumer’s satisfaction, the consumer should contact the
Ministry of Small Business and Consumer Services to file a
complaint.
•
Criminal Code Charges: If a collection agency is harassing a
consumer with telephone calls that are particularly abusive and
threatening, an individual may contact the police for potential
violations of the Canadian Criminal Code
•
Private Lawsuits: There have been a number of recent decisions
where collection agencies have been successfully sued for
engaging in abusive practices in violation of the Act.
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(Sarnia-Lambton) Inc.
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Credit Counselling
• Consumers experiencing serious financial problems
should consider contacting a credit counselling
service for help.
• Credit counselling services can help consumers create
repayment plans that will proactively address debts
and cover living expenses.
• Consumers can contact the Ontario Association of
Credit Counselling Services for information about
nonprofit credit counselling services in their area.
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(Sarnia-Lambton) Inc.
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Helpful Resources
•
Ontario Ministry of Small Business and Consumer Services website at:
www.ontario.ca
•
Ontario Association of Credit Counselling Services (OACCS) website at:
www.oaccs.com
•
Community Legal Clinics – Ontario website at: www.legalaid.on.ca
•
Members of Provincial Parliament website at www.ontario.ca (click on “MPPs”
under “Contacts”)
•
Community Law School (Sarnia-Lambton) Inc. website at:
www.communitylawschool.org (click on Bulletin Board)
•
Lawyer Referral Service (Ontario). In Ontario, the Law Society of Upper
Canada provides a service for people looking for a lawyer. It is called the Lawyer
Referral Service and can be reached at 1-900-565-4577
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(Sarnia-Lambton) Inc.
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Sample Complaint Letter (Collection Agency) to the
Ministry of Small Business and Consumer Services
November 30, 2009
Ministry of Small Business and Consumer Services
Consumer Protection Branch
5775 Yonge St. Suite 1500
Toronto, ON M7A 2E5
Dear Sir/Madam:
Re: ABC Collection Agency, Ltd.—Consumer Complaint
Please be advised, I was contacted by ABC Collection Agency, Ltd. by telephone on June 10, 12, 13, and
July 10, 11, 12, 2009. Each time, they asked to speak to Mr. James Smith. I explained that I was the only
person living at this address and that my name is Mr. Jerry Smith. I also asked them to stop calling as they
clearly had the wrong person.
They have continued to call at all hours of the day and night, including 6:00 a.m., 11:00 p.m., 12 Noon, and
6:00 p.m. I have stopped answering the telephone because they have used threatening language suggesting
that my employer would be advised of the $15,000 owing on my credit card bill. Please note, I do not have
an outstanding balance on my credit card.
Kindly consider my request for an investigation of the actions of ABC Collection Agency, Ltd. and for
assistance in having the harassing telephone calls stopped. I can be reached at:
1234 Johnston St., Summerville, Ontario, N0P2X0, phone: 519-555-1200
Yours truly,
Jerry Smith
2009, Community Law School
(Sarnia-Lambton) Inc.
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