Update: see previous posts – February 18, 2011 Newfoundland and Labrador Determined to Collect on Unpaid Traffic Ticket Fines, May 18, 2010 Traffic Violators Owe Taxpayers $1,048,607,020.80 in Unpaid Traffic Fines, May 17, 2010 1 Billion Dollars in Unpaid Traffic Tickets (Ontario), February 1, 2010 Toronto wants to Rake in Millions from Motorists, January 5, 2010 Alberta, Montreal, Nova Scotia & Ontario collect on unpaid tickets, January 1, 2010 Alberta to Target Calgarians on 25 Million Dollars of Unpaid Tickets
Collecting unpaid fines for provincial offences involves much more than just making phone calls and waiting for the cheques to arrive.
“There are a lot of factors, a lot of challenges that we see,” said Chris Scott of the Woodstock Oxford Collections agency (located at 13 Light Street, Woodstock, ON N4S 6G7 and employs 6 people) during a presentation to Perth County council Thursday.
Transients, insolvent corporations, individuals with no fixed address and those who simply can’t pay are some of the hurdles the agency faces in chasing down unpaid provincial offences fines on behalf of the county.
Currently, there are about $5 million worth of unpaid fines on the books in Perth.
The process, which often ends up in small claims courts, involves “walking a fine line” between being polite and assertive, he said.
“Sometimes we’re the good, sometimes we’re the bad, and sometimes we’re the ugly,” quipped Scott.
Marketplace has investigated the behaviour of abusive and harassing bill collectors, who work for collection agencies. Collection agencies are prohibited from performing the following actions, while collecting outstanding bills, or in this case, fines.
Since 2005, the agency has collected more than $1 million on behalf of the county and has a recovery rate that currently stands at just over 19%. The agency charges a 32% fee, which is added to the cost of the fine, so someone with a $100 unpaid traffic ticket would be forced to pay $132 (plus an administrative charge) if it goes to collection.
While that recovery rate may seem low, it’s actually a respectable number when it comes to collections, and at the high end of the spectrum for similar-sized agencies in the area, noted Hardman.
“I’m absolutely thrilled on our recovery compared to the others,” he said.
According to a report prepared by Perth County director of corporate services and treasurer Renato Pullia, there are currently more than 4,000 active files in Perth County relating to unpaid Provincial Offences Act fines.
The majority of them (42%) are from Stratford, but there are more than 50 Ontario communities on the list, as well as some from other Canadian provinces, 62 from the U.S. and even a dozen from Europe.
Greater Sudbury city officials estimate there are nearly 13 millions dollars in unpaid fines owed to the city. Greater Sudbury city turned to collection agencies in 2010 to get that money.
Collection Agencies in Ontario
Statistics Canada (StatsCan) has just reported that net income of Canadians has fell 0.3% to $184,300 in the second quarter – the first decline since the same period last year.
StatsCan says the ratio of credit market debt to personal disposable income also crept up to 148.7 per cent in the second quarter, that is higher than the old record of 147.3 set in the earlier quarter.
Canadians are experiencing record levels of debt – Canadian owe over $1.5 Trillion Dollars. Ontarians are carrying an amazing level of debt and that debtload will ensure that some bills won’t be paid on time, if they are paid at all.
If a debt isn’t paid, then companies or municipalities will call in collection agencies to collect those unpaid debts.
There are rules about what collection agencies can and cannot do, while in the pursuit of an unpaid debt. The legislation that covers the “do’s” and “dont’s” of debt collection by collection agencies, are laid out in the Collections Agencies Act.
Prohibited Practices and Methods in the Collection of Debts
20. In sections 21 to 25,
“contact” includes communication by e-mail or voice mail;
“debtor’s employer” includes any and all of the employer’s employees;
(a) a spouse as defined in section 1 of the Family Law Act, or
(b) either of two persons who live together in a conjugal relationship outside marriage.
21. (1) No collection agency or collector shall demand payment, or otherwise attempt to collect payment, of a debt from a debtor unless the collection agency or collector has sent the debtor, by ordinary mail, a private written notice setting out the following information:
1. The name of the creditor to whom the debt is owed.
2. The balance owing on the debt.
3. The identity of the collection agency or collector who is demanding payment of the debt.
4. The authority of the collection agency or collector to demand payment of the debt.
(2) No collection agency or collector shall make a telephone call to or a personal call on the debtor before the sixth day after mailing the written notice required by subsection (1).
(3) Subsection (1) does not require that the written notice be sent before a written demand for payment but is satisfied if the written demand for payment is contained in the written notice.
(4) If a debtor states to a collection agency or collector that the debtor has not received the notice required by subsection (1), the collection agency or collector shall send the notice to the debtor at the address provided by the debtor, and no demand for payment, or other attempt to collect payment, of the debt shall be made before the sixth day after the day the notice is sent.
22. (1) If a debtor sends a collection agency or collector, by registered mail, a letter stating that the debtor disputes the debt and suggests that the matter be taken to court, the collection agency or collector shall not thereafter contact or attempt to contact the debtor, unless the debtor consents to or requests the contact.
(2) If a debtor or his or her lawyer sends a collection agency or collector, by registered mail, a letter requesting that the collection agency or collector communicate only with the debtor’s lawyer and setting out the lawyer’s address and telephone number, the collection agency or collector shall not thereafter contact or attempt to contact the debtor other than through the debtor’s lawyer, unless the debtor consents to or requests the contact.
(3) No collection agency or collector shall contact or attempt to contact the debtor’s spouse, a member of the debtor’s family or household, or a relative, neighbour, friend or acquaintance of the debtor unless,
(a) the person being contacted has guaranteed to pay the debt and the contact is in respect of that guarantee;
(b) the debtor has requested the collection agency or collector to discuss the debt with the person being contacted; or
(c) the collection agency or collector does not have the debtor’s home address or home telephone number and the contact is for the sole purpose of obtaining the debtor’s home address or home telephone number.
(4) No collection agency or collector shall contact or attempt to contact the debtor’s employer unless,
(a) the employer has guaranteed to pay the debt and the contact is in respect of that guarantee;
(b) the debtor has given the collection agency or collector written authorization to contact the debtor’s employer;
(c) the contact occurs only once and is for the sole purpose of confirming one or more of the debtor’s employment, the debtor’s business title and the debtor’s business address; or
(d) the contact is in respect of payments pursuant to,
(i) a wage assignment given to a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994, or to a caisse populaire within the meaning of that Act, or
(ii) an order or judgment made by a court in favour of the collection agency or collector or of a creditor who is a client of the collection agency or collector.
(5) No collection agency or collector shall,
(a) collect or attempt to collect a debt from a person who the collection agency or collector knows or reasonably ought to know is not liable for the debt; or
(b) contact or attempt to contact a person for the purpose of collecting a debt if the person has informed the collection agency or collector that the person is not who the collection agency or collector intends to contact, unless the collection agency or collector first takes all reasonable precautions to ensure that the person is, in fact, who the collection agency or collector intends to contact.
(6) No collection agency or collector shall engage in conduct described in any of the following paragraphs with respect to the debtor, the debtor’s spouse, a member of the debtor’s family or household, a relative, neighbour, friend or acquaintance of the debtor, the debtor’s employer, a person who guaranteed the debt or a person mistakenly believed to be the debtor:
1. Make a telephone call or personal call at any of the following times, except at the request of the person being contacted:
i. On a Sunday, other than between the hours of 1 p.m. and 5 p.m. local time of the place where the contact is being made.
ii. On any day of the week other than a Sunday, between the hours of 9 p.m. and 7 a.m. local time of the place where the contact is being made.
iii. Despite subparagraphs i and ii, on any holiday listed in subsection (7).
2. Contact the person more than three times in a seven-day period on behalf of the same creditor, subject to subsections (8) and (9).
3. Publish or threaten to publish the debtor’s failure to pay.
4. Use threatening, profane, intimidating or coercive language.
5. Use undue, excessive or unreasonable pressure.
6. Otherwise communicate in such a manner or with such frequency as to constitute harassment.
(7) For the purposes of subparagraph 1 iii of subsection (6), the following days are holidays:
1. New Year’s Day.
2. Good Friday.
3. Easter Monday.
4. Victoria Day.
5. Canada Day.
6. Civic Holiday.
7. Labour Day.
8. Thanksgiving Day.
9. Remembrance Day.
10. Christmas Day.
11. December 26.
12. Any day fixed as a holiday by proclamation of the Governor General or Lieutenant Governor.
(8) For the purposes of paragraph 2 of subsection (6), the following types of contact shall not be counted:
1. Contact made by ordinary mail.
2. Contact consented to or requested by the person being contacted.
3. Contact of a person other than the debtor where the purpose of the contact is to locate the debtor.
(9) The prohibition set out in paragraph 2 of subsection (6) does not apply to a collection agency or collector until such time that the collection agency or collector speaks with the person being contacted either in a telephone call or a personal call, but the prohibition applies thereafter.
23. (1) No collection agency or collector shall directly or indirectly threaten, or state an intention, to commence a legal proceeding for the collection of a debt, unless the collection agency or collector has the written authority of the creditor to commence the proceeding, and the proceeding is not otherwise prohibited by law.
(2) No collection agency or collector shall recommend to a creditor that a legal proceeding be commenced for collection of a debt, unless the collection agency or collector first gives notice to the debtor of its intention to make the recommendation.
(3) No collection agency or collector shall commence a legal proceeding for the collection of a debt,
(a) in the name of the creditor, unless the collection agency or collector has the written authority of the creditor to do so; or
(b) as a plaintiff, unless the following conditions have been satisfied:
(i) The creditor has assigned the debt to the collection agency or collector by written instrument and for valuable consideration, and the creditor has no further interest in the debt.
(ii) If a legal proceeding was commenced by the creditor prior to assigning the debt, the collection agency or collector has given written notice to the debtor of the assignment.
(iii) If a legal proceeding was not commenced by the creditor prior to assigning the debt, the collection agency or collector has given written notice to the debtor of the assignment and, either separately or together with the written notice of assignment, has given notice to the debtor of its intention to commence a legal proceeding.
24. No collection agency or collector shall,
(a) give any person, directly or indirectly, by implication or otherwise, any false or misleading information;
(b) misrepresent to any person contacted in respect of the debt the purpose of the contact or the identity of the creditor or of the collection agency or collector; or
(c) use, without lawful authority, any summons, notice, demand or other document that states, suggests or implies that it is authorized or approved by a court in Canada or another jurisdiction.
25. (1) Charges incurred by a collection agency or collector in collecting a debt and charges incurred by a creditor to retain a collection agency or collector do not form part of the debt owed by the debtor, and no collection agency or collector shall collect or attempt to collect any such charges, subject to subsection (2).
(2) A collection agency or collector may collect, as part of the debt owed by a debtor, all reasonable charges incurred by the collection agency or collector in respect of the debtor’s dishonoured cheques if,
(a) the agreement between the creditor and the debtor provides that the debtor is liable for such charges if incurred by the creditor and sets out the amount of the charge;
(b) the creditor has provided information to the debtor, by any method, that the debtor is liable for such charges if incurred by the creditor and the debtor knows or reasonably ought to know of his or her liability for such charges and the amount of the charge; or
(c) the collection of such charges is expressly permitted by law.
Unfortunately, many of the collection agencies in the Province of Ontario do not always follow the rules as laid out in the Collections Agencies Act. When employees of collection agencies (some work on a commission basis – the more they collect the more they get paid) refuse to follow the rules, complaints should be made to the Ontario Ministry of Consumer Services and the Better Business Bureau.
The Ontario Ministry of Consumer Services has received over 100,000 complaints regarding the abusive and harassing behaviour of collection agencies in Ontario over the last five (5) years.
Remember: If a collection agency is calling you, you are entitled to record the phone conversation without informing them that you are recording them and you can later rely on this telephone conversation, or message(s) left by them, as evidence of their illegal behaviour.
Do you feel harassed by a collection agency?
Ontario’s Collections Agencies Act gives you some protections you should know about.
For example, a collection agency may not use language that is offensive or intimidating and they can’t use excessive or unreasonable pressure.
Before the agency can call you, they have to send you a written notice. This notice must explain:
- the name of the company or person claiming you owe them
- the amount of money they claim you owe
- the name of the collection agency and the authority it has to demand payment from you.
Do you dispute the claim? If so, send the collection agency a registered letter saying you dispute the debt and they should take the matter to court. If you do this, they have to stop calling.
Once a collection agency has actually spoken with you, they can’t keep calling all the time. They can send you ordinary mail, but they can’t call more than three times in a seven-day period, unless you agree.
Your Rights When Dealing With Collection Agencies
Right off the bat
The first step a collection agency must take is to send you a written notice through the mail (email doesn’t count). This notice must include:
- the name of the creditor (the person or business that says you owe them money)
- the amount the creditor says you owe
- the name of the collection agency and its authority to demand payment on behalf of the creditor.
After sending the notice, the agency must wait six days before it can contact you in person or by phone.
What if they’re wrong?
The agency cannot continue to contact you if:
- you send a registered letter to the agency saying that you dispute the debt and suggest the matter be taken to court
- you (or your lawyer) send a registered letter to the agency providing your lawyer’s contact information and notifying the agency to communicate only with your lawyer
- you have told them that you are not the person they are looking for, unless they take reasonable precautions to ensure you are that person.
How often can they contact you?
The agency has to observe a number of restrictions about how often their agents can contact you and how they communicate with you. For example, after their first conversation with you, the agents cannot contact you more than three times in a seven-day period without your consent, except by regular mail. “Contact” means the agents must actually speak with you, email you or leave you a voice mail. If you don’t answer the phone and the agents don’t leave a message, it doesn’t count as a contact.
In addition, the agency cannot:
- contact you on Sunday, except between the hours of 1 p.m. and 5 p.m.
- contact you on any other day of the week between the hours of 9 p.m. and 7 a.m.
- contact you on a statutory holiday
- use threatening, profane, intimidating or coercive language, or
- use undue, excessive or unreasonable pressure.
Can they ask other people about you?
In general, a collection agency can contact your employer once to obtain your employment information. Otherwise, they cannot contact your employer unless:
- your employer has guaranteed the debt
- the call is in respect of a court order or wage assignment given to a credit union
- you have provided written authorization to contact your employer.
A collection agency cannot contact your spouse, a member of your family or household, or a relative, neighbour or acquaintance except to obtain your address and telephone number, unless:
- the person contacted has guaranteed the debt
- you have given permission for the person to be contacted.
In addition, a collection agency cannot:
- give false or misleading information to any person
- recommend to a creditor that a legal action be commenced against you without first sending you notice.
Can a collection agency charge you extra?
No. Collection agencies cannot add any charges. They are allowed to collect only what you owe your creditor. But remember, the amount you owe could continue to grow if interest charges are piling up. This depends on the terms of your contract with your creditor.
Exercise your rights
If you believe a collection agency has violated any of these practices in dealing with you:
- send the agency a letter outlining why you believe they have acted inappropriately and notifying them that you expect them to comply with the law
- if their behaviour persists, file a complaint with the ministry.
Solve the problem
If you are contacted by a collection agency, it’s important that you deal with them to resolve your debts as soon as possible. Otherwise, the problem won’t go away and could very well get worse. Your creditor might:
- report you to the credit bureau
- take you to court and get a judgement against you, allowing them to seize your goods or claim part of your pay cheque
- sell your debt to a third party. In this case, the rights available to you under the Collection Agencies Act may not apply.
It’s always best to deal with debts before you get to this point