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The Secret To Getting Debt Collectors Off Your Back

On August 26, 2014, Yahoo Canada! posted a Money Minute video titled “The secret to getting debt collectors off your back” in which Mark Silverthorn, lawyer, and author of The Wolf At The Door:  What To Do When Collection Agencies Come Calling, was interviewed by Ashleigh Patterson, Senior Finance Editor.

Under what circumstances can collection agencies call people?

During this interview, Ashleigh Patterson talked about when a collection agency could phone people in their efforts to collect an outstanding account.  All provinces place restrictions on the hours when collection agencies can make collection calls and some provinces limit the number of calls a collection agency can make during a 7-day period.  Some provinces require that a collection agency send a debtor a written notice before collection calls to a debtor are permitted.  Consumers have no legal obligation to speak to collectors.  Furthermore, in most provinces, a consumer can send a registered letter to a collection agency after which it is illegal for a collection agency to make further payment demands by telephone.

Collection agencies spend a significant amount of time attempting to locate debtors and they will often call a debtor’s family members, friends, workplace, and even former landlords, in order to obtain a debtor’s current contact information.  It is, however, illegal for collection agencies to disclose the existence of a debt to anyone other than the debtor.

Collection agencies use the internet to locate debtors

Today creditors and collection agencies routinely use the internet to locate debtors and they can be very creative in using the internet to collect monies from debtors.

Ms Patterson gave an example of how a creditor, using a fake Facebook profile of a woman in a bikini, sent a debtor a message to lure the debtor into opening the message enabling the creditor to serve the debtor with court documents electronically.

Use of harassment, threats and intimidation by collection agencies

Collection agencies generate more complaints than any other industry and it is common for collectors to use harassment, threats, and intimidation.

Mark Silverthorn gave a few examples of intimidation used by unprofessional bill collectors:

  • New Canadians might be told that they will be deported if they don’t pay their bill
  • Parents might be told that they will be reported to the authorities for non-payment of their account and they might lose custody of their children

None of these actions will actually take place if a consumer does not pay an outstanding consumer account.

It is not common for collection agencies to sue debtors

Collection agencies do not routinely sue debtors.  In fact, it might be illegal for collection agencies to threaten to sue people where the creditor has not given them the authority to do so or they have no intention of doing so!

Mark Silverthorn, a former collection industry insider, observed that “Collectively, collection agencies across Canada only sue about one out of 10,000 accounts that are placed with them for collection.  Basically, what they do is call people and they hound them and they send nasty letters but collection agencies are not in the business of suing people because they would lose money if they did that in large volume.”

Creditors might be prepared to accept a one-time discounted payment as a settlement in full

Ms Patterson stated that some creditors, and their authorized collection agents, might be prepared to accept a payment equal to less than the full amount owing as a settlement in full of a debtor’s unpaid account.  The number of months or years debt has been outstanding is important.   The longer a debt has been unpaid the more likely a creditor might be willing to accept a discounted payment and the more generous a creditor might be prepared to be.