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Abuse of Non-existent Power: Collection Agencies in Canada

Moved recently? If so you know it's not uncommon to receive someone else's mail, telephone messages and sometimes their headaches.

Collection Agencies have a debt to collect - usually for a third party. Sometimes the third party, say a bank, will sell the debt to the collection agency. That means the agency has spent an initial outlay of funds, in the 10 percent range, in order to get what they might see as a big payout.

Whether you are the 'right' person - or not they can be a real pain to deal with. Most important of all, know what they can and can't do.

Never provide information over the telephone to someone that you don't know. Certainly don't provide copies of your identification to anyone without considering the ramifications: is it a collection agency or is it a con artist with an identity theft scam planned. Some collection agencies, like CBV Collections, don't identify themselves on the telephone. One of their call back numbers 1-877-328-9930, claims to be "American Express After Hours". As of publication this is still the message on this number provided by CBV Employees.

Lauren Dineen-Duarte, American Express Canada, confirmed that American Express is 7/24. Why would they need an after hours line? Because American Express, or Bank of Montreal has a certain cachet - you might feel you are dealing with a legitimate company who will follow the rules or there is some redress available.

That's true of collection agencies. Given their horrible reputation of calling constantly, in the wee hours of the morning, contacting everyone who may ever have met the person they feel owes them money - the government had to step in. It's a provincial concern.

In Ontario the Ministry of Small Business and Consumer Services are the first point of contact when you are being harassed by a collection agency.

If you are not the person they want then send a registered letter to the Collection Agency. The letter must state "that you dispute the debt and suggest the matter be taken to court." Once you do this the Collection Agency can not contact you again. Their choice is sue you or leave you alone.

The risk is you could be sued - but if you're not the person it should be easy to resolve - and if you are the person that owes masses of money; you can't get blood from a stone. Small Claims Court in Ontario have a maximum of $10,000 and most people represent themselves. You aren't expected to hire a lawyer.

If the debt is in the thousands and you have some large asset that can be targeted this probably isn't a good idea - contact a legitimate credit counseling bureau to help manage your debts and arrange a repayment plan.

Now collection agencies are not supposed to contact you; if you aren't the person they want. However The Toronto Tribune is well aware from our readers that many agencies don't play by the rules.

The Ministry spells out what they can and can't do. If you are bothered and being treated unfairly it's there job to step in and stop the Collection Agency from harassing you.