Mark gives an overview of the types of bill collectors and key guideposts for dealing with collection calls, including what to share, what to ask, and the options if a collector misbehaves.
Transcript
If you are receiving collection calls, then you should watch this video. I am going to share with you my insider's tips gained working 12 years as a collection agency lawyer. If you watch to the end of this video, then you will learn how you can have some fun with the bill collector demanding payment of your account. I'm Mark Silverthorn, the founder of Debt Coach Silverthorn. This video should be helpful to people receiving collection calls regardless of the country where they reside.
I don't know anyone who enjoys receiving collection calls. They can be very unpleasant. After I spent 12 years working as a collection agency lawyer, I spent nine years working as a consumer lawyer assisting Canadians struggling with debt. I can recall listening to some of my clients crying on the phone because a collector was verbally abusive towards them. Today I'm going to provide you with a few critical guideposts for dealing with collection calls. Before I share these guideposts, I'm going to provide you with some helpful background information about bill collectors.
The two main types of bill collectors
There are two major categories of bill collectors. The first category is one employed by the company that owns your debt. If you have not paid your account for less than three months, then invariably you are going to receive collection calls from the in-house collection department of your original creditor. Your original creditor is the firm that provided you with goods, services or credit. Sometimes an original creditor will sell a significant number of unpaid accounts to a firm known as a debt buyer. A list of the largest debt buyers in Canada would include CBV Collection Services.
There are a few creditors in Canada that sell their unpaid accounts when they are only six months old. Most creditors in Canada that sell their unpaid accounts will not do so until the accounts are at least 12 months old. A debt buyer steps into the shoes of your original creditor. It then owns your debt, and it will attempt to collect it from you. Most debt buyers have their own in-house collection departments, and they employ their own collectors. Sometimes your creditor, regardless of whether it is your original creditor or a debt buyer, will hire a collection agent to attempt to collect your unpaid account. The most common type of collection agents are collection agencies. In some instances, a creditor will hire a law firm to attempt to recover monies from you.
Guidepost one: you don't have to speak with a collector
Now I would like to provide you with some key guideposts for dealing with collection calls. Number one, you have no legal obligation to speak with a bill collector. If a collector gets you on the phone, you can simply hang up on them. Alternatively, you can suggest that they call you back at another time. I would describe a collector's first collection call as an ambush. The collector's objective is to persuade you that it is necessary for you to pay 100 percent of your outstanding account in the next few days. You will, however, almost always be able to obtain a better result dealing with your debt situation if you decline to do so and take a few days to research your alternatives.
In some instances, your debt might be so old that you are in a position to avoid paying it. Alternatively, you might be a renter who supports yourself on social assistance or pension income, in which case you are likely judgment proof and you can avoid paying the unpaid account. If your account is more than six months old, then your creditor might entertain a settlement offer from you for a one-time lump sum payment for significantly less than what you owe, as settlement in full. Finally, depending upon your situation, you might want to contact a Licensed Insolvency Trustee to explore the merits of making a consumer proposal or filing for personal bankruptcy.
Guideposts two and three: what to share and what to ask
Number two, avoid providing the collector with information about yourself. With a few exceptions, if you provide the collector with information about yourself, then it will result in a worse result for you. It is especially important that you do not tell the collector the name of your employer or the financial institution where you do your banking.
Number three, there may be scenarios where you will want to speak with a bill collector. This is particularly the case where you want to obtain information. If you receive a collection call, you may want to confirm the name of the creditor, the account in question and the current outstanding balance. You may also want to make a note of the collector's name, the name of their employer and their telephone number. If you obtain this information, then this will put you in a better position should you wish to do any one of the following: make a payment in full, make a settlement offer, make a complaint against the collector and his or her employer, sue the collector, his or her employer and possibly its collection agent, or attempt to have criminal charges laid against the collector.
What collectors can and cannot do
It is illegal for a bill collector to disclose the existence of your debt to anyone other than you. This means that a bill collector cannot legally tell anyone other than you about your debt. Your bill collector is not even permitted to disclose the name of his employer to anyone other than you. A bill collector is, however, permitted to contact your family and friends, as well as your employer and landlord, current and former, solely for the purposes of obtaining your current contact information.
There are different scenarios where collection calls might arise. A bill collector might call your workplace. These calls have the potential to be very awkward, because if a collector makes repeated phone calls to your workplace, this might harm your reputation with management or your co-workers. If a rude collector makes repeated phone calls to your workplace, then your co-workers might come to the conclusion that these are collection calls. In some circumstances, it is possible for a Canadian resident to take action to stop collection calls from bill collectors. This involves either you or your legal representative sending what is known as a cease and desist letter to the entity making the collection calls.
If you are receiving collection calls but not at your workplace, then you might be better off focusing on avoiding collection calls. If you are able to avoid collection calls, then a bill collector will not have the opportunity to both get you on the phone and start a collection call with you.
Complaints, lawsuits and criminal charges
There are laws regulating the conduct of bill collectors, particularly collection agencies. If a collection agency has violated the law regulating collection agencies in the province where you live, then you might want to make a written complaint to the government agency responsible for regulating collection agencies in your province. In certain instances, a collector might have engaged in misconduct that would entitle a consumer to money damages in court. For example, this might arise where a bill collector called a debtor's workplace and disclosed the existence of a debt, and the debtor was subsequently fired or had their employment adversely affected. A debtor might also be entitled to money damages where a collector made repeated harassing phone calls to a debtor and as a result the debtor's health deteriorated.
It is also possible that a collector's behaviour is so egregious that it might be possible to have criminal charges laid against the collector. If a collector is speaking with you and you want to have some fun with them, then you can inform the collector that you are a client of Mark Silverthorn. In many, but certainly not all, instances, this might have the effect of making the collector less aggressive towards you.