Tag Archive for collection agencies

Complaints of a collection agency owner

In the past three months I arranged to meet with the owner of a collection agency over a coffee.  This individual has worked in the collection industry for more than three decades.  For the remainder of this post I will simply refer to this person as Hal.

 

Creditors have been squeezing collection agencies for years

Hal’s number one beef is that creditors have been squeezing collection agencies for years.  Over the past three decades commission rates paid by creditors to collection agencies have declined dramatically.  Costs associated with operating a collection agency, however, have not declined.  The only way for collection agencies to overcome declining commission rates is to increase the number of files worked.

Creditors endless pursuit of better returns is encouraging bad behavior in the collection industry

Hal pointed the finger at creditors when it comes to the rising tide of consumer complaints against collection agencies.  The fact that creditors have increasingly been treating collection agencies as a commodity has placed tremendous pressure on collection agencies to meet certain benchmarks or risk losing business.  This, in turn, has lead collection agency management to place pressure on front-line collection staff.

Relationships with creditors are becoming less important

In the past relationships between a creditor and a collection agency might have counted for something.  Today many creditors are simply looking to find the lowest cost collection agency.  Hal cited the emergence of bidding websites including Merx and Biddingo.

 

Government regulators have made life tougher for collection agencies

Hal also raised concerns about how government regulators were making it more difficult for collection agencies to be financially viable. At one point collection agencies were contacting consumers using automated messages.  The federal government ruled that those making these automated messages had to disclose on whose behalf these calls were being made.  This decision meant that these automated messages were illegal under provincial law which prohibited collection agencies from disclosing the existence of a debt.

Collection agencies operate under a tough business model

Unlike most businesses, 100 percent of the revenues of a collection agency are commission based.  Most of a collection agency’s expenses, however, including rent, overhead, and labour costs are fixed.  This means that a collection agency that has some rough months faces the prospect of closing its doors.

 

How to file a complaint to the Ontario Government against a collection agency or a debt settlement firm

 

It is possible to file a complaint against a collection agency or a debt settlement firm to the Ontario Government. In order for you to file a complaint it will be necessary for you to go through a two-step process.

 

Step One:   Send a written letter of complaint to the business

The Ontario Government will decline to process your complaint unless you first write a letter of complaint to the business in question.  In this letter you should describe the nature of your complaint against your business.  Furthermore, you should also state what actions by the business, if any, would resolve your complaint.

 

Step Two:   Submit a completed Complaint Form to the Ontario Government

Once you have made your written complaint to the business in question then you can file a written complaint to the Ontario Government using the Ontario Government’s Complaint Form which can be found online at the following link:

https://www.consumerbeware.mgs.gov.on.ca/esearch/compform/english/complaint.jsp

You can also find a copy of this 4-page Complaint Form reproduced at the end of this post.

You should also include copies of any relevant documents in connection with your complaint.  For example, if you are complaining about the conduct of a debt settelement firm, you might want to include copies of your debt settlement agreement as well as copies of correspondence between yourself and the debt settlement firm.

You have a number of options in terms of how you submit your Complaint Form.  You can submit your completed Complaint Form onlineYou can also print a Complaint Form and then submit it via e-mail, by fax, or by regular mail:

  • via e-mail to consumer@ontario.ca
  •  by fax, to (416) 326-8665
  • by mail to the following address:

Ministry of Government and Consumer Services

Consumer Protection Branch

Box 480

1201 Wilson Avenue, Building A

North York, ON  M3M 1J8

 

 

What happens to your complaint after it is submitted?

After your complaint is forwarded to the Ontario Government it will be be processed.  Complaints are input into the Ontario Government’s computer system and the complaint will be assigned a unique file number.   Complaints go through triage to determine the priority in which a particular complaint should be dealt with.  Those complaints which are deemded sufficiently serious are forwarded to an Investigations Unit.  Complaints alleging that a business is contravening Ontario law is more likely tobe  forwarded to an Investigations Unit.

 

Ontario Collection and Debt Settlement Services Act and Regulation 74

The conduct of both collection agencies and debt settlement firms is governed by the Ontario Collection and Debt Settlement Services Act and Regulation 74 enacted pursuant to the Act.  A complaint to the Ontario Government against a collection agency or a debt settlement firm alleging a violation of either the Ontario Collection and Debt Settlement Services Act or Regulation 74 will likely be treated more seriously than a complaint which does not involve conduct contravening these provisions.

You can find the Ontario Collection and Debt Settlement Services Act at the following link:

http://www.ontario.ca/laws/statute/90c14

 

 

Contact me if you would like to make a complaint against a collection agency or a debt settlement firm

You are welcome to call me at (866) 996-9941 or (519) 827-5513 if you have made a complaint, or you wish to make a complaint, regarding a collection agency or a debt settlement firm.  You can also contact me, via e-mail, at mark@comprehensivedebtsolutions.ca.

 

You are welcome to contact Mark Silverthorn if you have, or if you wish to file, a complaint against a collection agency or a debt settlement firm.

You are welcome to contact Mark Silverthorn if you have, or if you wish to file, a complaint against a collection agency or a debt settlement firm.

 

 

Complaint Form

The 4-page document reproduced below is the Complaint Form that must be completed by an Ontario resident who wishes to make a complaint against a collection agency or a debt settlement firm.  The Ontario Government will decline to process a Complaint Form unless a consumer first writes a letter of complaint to the business in question.

 

p1ComplaintForm

p2ComplaintForm

 

p3ComplaintForm

 

p4ComplaintForm

 

 

 

 

 

Three Debt Settlement Firms to Watch

It is going to be very interesting watching developments in the Ontario debt settlement industry in July of this year.

It is going to be very interesting watching developments in the Ontario debt settlement industry in July of this year.

 

July 1, 2015, Canada Day, marks the first day of a new era in the debt settlement industry in Ontario.  Debt settlement firms will be subject to a significant number of obligations and restrictions.  Furthermore, starting July 1st firms providing debt settlement services to Ontario residents face draconian restrictions regarding the fees that they can charge  A consumer cannot be charged a penny in fees until such time that a settlement is actually paid out. This means that a debt settlement firm will likely not generate a nickel in revenues on a significant percentage of its files–files on which it has provided services and incurred expenses.

On any debt settlement services agreement signed after June 30, 2015, the maximum fee that a debt settlement firm can charge a client is equal to 10 percent of the amount of the consumer’s outstanding debt on the date he signed the agreement.  For example, if a consumer with one debt–a $10,000 credit card debt–signed a debt settlement agreement and at some later date a settlement was paid out then the maximum fee that the consumer could be charged is $1,000 or ten percent of the original $10,000 debt.

These punitive restrictions on fees will make it difficult for any debt settlement firm which is not exempt from being licensed as a collection agency under the Ontario Collection and Debt Settlement Services Act to be financially viable.  Last week I received a phone call from a gentleman who operates a small one-man debt settlement firm in Ontario and he advised me that he intended to surrender his collection agency license in the next two weeks.  I anticipate that in the next few weeks and months that more debt settlement firms operating in Ontario will seriously consider doing the same.

 

Exemption for lawyers must be incredibly attractive

Certain organizations providing debt settlement services to Ontario residents are exempt from the new regulatory regime for debt settlement services in Ontario–including the punitive restrictions concerning fees.  The most important exemption is for lawyers.

I foresee two developments in the near future.  Firstly, I see law firms providing debt settlement firms taking market share away from firms providing debt settlement services which possess an Ontario collection agency license. Secondly, I anticipate that some existing debt settlements firms, particularly the larger ones, will be tempted to find a lawyer who will agree to permit their debt settlement services to be offered in the name of the law firm.  I can also foresee that these debt settlement providers transforming their operations in-house at a law firm will discover the transition much rockier than they anticipated.

 

Three debt settlement firms to watch

Today there are fewer than a dozen debt settlement firms which possess a collection agency license in Ontario.  Of these firms I anticipate that more than 70 percent of all existing debt settlement clients in Ontario are clients of three firms–listed below in no particular order of size:

  • Consumer Debtor Protection of Canada Ltd.
  • Ontario Consumer Credit Assistance (OCCA)
  • Total Debt Freedom Inc.

The $64,000 question is which business model will these three major players in the Ontario debt settlement industry be using by the end of July?  I see four options for these firms:

status quo:   These firms could simply retain their existing business model in which case their revenues will drop substantially because of the new restrictions on fees for any new client signing a debt settlement agreement after June 30, 2015.

status quo plus addition of new revenue streams:  These firms could retain their existing business model but try to offset the drop in revenues caused by the new fee restrictions by adding new revenue streams from additional goods or services, or business partnerships.

new clients will be clients of a law firm:  The principals at these debt settlement firms might join a law firm and new clients will become clients of the law firm in which case they can avoid the draconian fee restrictions imposed on those debt settlement providers holding an Ontario collection agency license.

exit the debt settlement marketplace:  It is possible, but very unlikely, that any of these three firms will exit the debt settlement marketplace in the immediate future.

If you have any insights as to what the debt settlement industry will look like in the near future I would invite you to contact me at (866) 996-9941 or (519) 827-5513.  Alternatively, you can e-mail me at mark@comprehensivedebtsolutions.ca

The names of individuals who provide me with information are kept confidential.

The names of individuals who provide me with information are kept confidential.

 

Mistake for frontline collectors to be sending e-mails to consumers

 

In most large collection agencies the only staff with the authority to communicate with consumers via e-mail are senior managers and possibly collection supervisors.  As a general rule, large collection agencies do not permit frontline collectors to communicate with consumers via e-mail–only by telephone.  There is a good reason for this self-imposed restriction.  Some frontline collectors can, and often do, act in a very impulsive, immature manner which sometimes crosses the line into socially unacceptable and even illegal behavior.

A recent example involving an Ontario resident and a collection agency licensed to operate in that province illustrates what can happen when a collector communicates with a consumer via e-mail

In the past few days I came into possession of a redacted copy of an e-mail that was sent by a collector on April 24, 2015, to an Ontario resident.  Here is a copy of this e-mail.  Some content has been blacked out, or “redacted”, to protect the anonymity of the consumer.

This is a redacted copy of an e-mail dated April 24, 2015, sent from a collector at a collection agency to an Ontario resident.

This is a redacted copy of an e-mail dated April 24, 2015, sent from a collector at a collection agency to an Ontario resident.

 

Most people reading this e-mail would find it disturbing.  Since a collector at a collection agency sent this e-mail to an Ontario resident then we should look at the Ontario Debt Collection and Debt Settlement Services Act, the relevant law regulating the conduct of collection agencies operating in Ontario, to get some sense as to whether or not any provincial laws have been broken.

 

Illegal for a collection agency to threaten legal action unless it has express written authority to commence legal proceedings

In this e-mail the collector threatens to commence a lawsuit against an Ontario resident in connection with an unpaid account.   The collector in question has contravened subsection 23(1) of the Ontario Collection and Debt Settlement Services Act by sending this e-mail unless her collection agency-employer had written permission to sue this file on April 24, 2015, the date that the e-mail was sent to the consumer.

 

Illegal for a collection agency or a collector to provide a consumer with false or misleading information

This e-mail would appear to be full of statements which would contravene subsection 24(a) which reads as follows:

24.    No collection agency or collector shall,

(a)  give any person, directly or indirectly, by implication or otherwise, any false or misleading information.

This e-mail contains a number of statements which, directly or indirectly, contain false or misleading information:

  • That if the consumer is sued the creditor will automatically obtain a judgment against the consumer
  • Those entities regulating nurses in a number of provinces will become aware of the existence of a judgment against the consumer
  • The existence of a judgment against a nurse for an unpaid debt would mean that the nurse is no longer bondable in Canada
  • The existence of a judgment against a nurse might result in the revocation of the consumer’s nursing license

I would be very surprised if the collector who wrote this e-mail, and the collector’s collectionagency- employer, have not contravened subsection 24(a) of the Act.

 

Repucussions of this collector’s adventure with e-mail

If I were the president of the collection agency employing this collector I would be very concerned that the creditor on whose behalf my agency is attempting to collect this account–as well as my existing client base, and my future clients– might learn of the existence of this e-mail.  A creditor has legal  liability for the misconduct of its authorized collection agent.  This means that if a collector does something stupid then a consumer can sue not only the collector, as well as the collection agency, but also the creditor on whose behalf the account was being collected.

As a result of this incident this collector should have had her e-mail privileges revoked.  I would imagine that many collection agencies would write up a collector for this type of behavior and some collection agencies would fire a collector for this unprofessional conduct.

If you have received an e-mail from a bill collector which you believe is unprofessional then I would invite you to share it with me.  You can call me toll free at 1 (866) 996-9941 or at (519) 827-5513.  You are also welcome to send your e-mail to myself at mark@comprehensivedebtsolutions.ca.

You might want to call Mark Silverthorn and learn more about how to stop workplace collction calls.

You might want to call Mark Silverthorn if you have received an unprofessional e-mail from a bill collector.

 

TCR largest collection agency in Canada

 

It’s Official!  At Comprehensive Debt Solutions, we are naming Total Credit Recovery Ltd. the largest collection agency operating in Canada.  This announcement is based upon the fact that our sources indicate that the Toronto-based Total Credit Recovery Ltd. employs more collectors making collection calls to Canadians, excluding purchased debt, than any other collection agency–by a signficant margin.

 

Comparative sizes of collection agencies based upon number of collectors

In our view, the only practical yardstick for measuring the comparative size of collection agencies in Canada is the number of collectors they employ making third party collection calls to Canadian residents.  Since many of the largest collection agencies operating in Canada are privately-owned there is no financial information available to shed light on the collection agency’s size.  While the number of collectors that a collection agency employs is not a precise yardstick for measuring the comparative size of collection agencies, it is the best method for measuring the size of collection agencies.

 

23 collection agencies in Canada employ more than 50 collectors

Our research indicates that 23 collection agencies in Canada employ more than 50 collectors making third party collection calls to Canadian residents.  Comprehensive Debt Solutions has a webpage titled “Largest Collection Agencies Operating in Canada” dedicated to these 23 collection agencies and lists the addresses for each of the company’s locations, as well as their telephone and fax numbers and website addresses. Here is the link for this webpage:

http://www.comprehensivedebtsolutions.ca/largest-collection-agencies-in-canada.html

 

Photographs of locations for the largest 23 collection agencies operating in Canada

We are also in the process of posting photographs of each and every building where the largest 23 collection agencies in Canada operate from.  I recently posted a Youtube video asking for the public’s help in obtaining phtotographs of the buildings in Canada where these collection agencies operate from.

 

I recently shot a 60-second Youtube video requesting the public’s help in obtaining photographs of buildings where the largest collection agencies in Canada operate from.  Video footage courtesy of Emilie van Gent.

 

Our initiatives to provide Canadians with more information about the collection industry 

At the present time Comprehensive Debt Solutions Inc. is involved in a number of initiatives to provide consumers with more information about the collection industry as well as the “debt help” industry–those entities that hold themselves out as assisting consumers with debt problems.

Earlier this year we announced that we have compiled a comprehensive list of collectors in Ontario which we call our Ontario Collector Database.  You can learn more about the Ontario Collector Database at the following link:

http://www.comprehensivedebtsolutions.ca/canadian-collector-database.html

Earlier this year we published our complimentary online Ontario Debt Collection Industry Directory, a list of every collection agency, debt settlement firm, and credit counselling agency with offices in Ontario.  You can view the Ontario Debt Collection Industry Directory at the following webpage:

http://www.comprehensivedebtsolutions.ca/ontario-debt-collection-directory.html

We recently began compiling information in connection with the Who’s Who of the Canadian Collection Industry.

For more information about the Who’s Who of the Canadian Collection Industry you can visit the following webpage:

http://www.comprehensivedebtsolutions.ca/who-s-who-of-the-canadian-collection-industry.html

 

Our firm has an extensive network of contacts to draw on for our sources of information.

Our firm has an extensive network of contacts to draw on for our sources of information.

PIAC report author downplays collection agency misconduct

 

On Tuesday, March 30, 2015, CTV’s Canada AM aired an interview with Jonathan Bishop, the author of a new report on the Canadian collection industry.  The report was prepared for the Public Interest Advocacy Centre (PIAC), an Ottawa-based  non-profit organization which promotes the interests of consumers.  The report contains nine recommendations for improving the debt collection industry in Canada.

 

You can watch the Canada AM interview with Jonathan Bishop, author of PIAC’s report on the Canadian collection industr, on the following link:

http://canadaam.ctvnews.ca/video?clipId=578764

 

I found one statement that Jonathan Bishop, the report’s author, made during this Canada AM interview to be quite disturbing in which he downplayed the level of misconduct by collection agencies in this country.

When the interviewer on Canada AM asked how collection agencies, in general, were conducting themselves, Mr. Bishop gave the following answer:

This is a very small number of consumers that are affected by the collection agencies’ tactics of this nature.  For the most part collection agencies do their job in a very courteous manner.  However, it only takes a few small … a few bad apples to spoil the bunch.

I take issue with this statement made by Mr. Bishop during this recent interview on Canada AM.  This comment by Mr. Bishop understates the level of illegal and socially unacceptable behavior by collection agencies in this country today.

Why did the Public Industry Advocacy Centre commit time and resources to the preparation of a 96-page report on the Canadian collection industry, and make nine recommendations for improving the industry, when according to the report’s author a “very small number of consumers” are affected by collection agency misconduct?

The PIAC report contains nine recommendations, one of which, is that all phone calls between collection agencies and debtors be recorded.  You can read this 96-page report, titled “All Along The Watch Tower:  A Review of the Canadian Consumer Debt Collection Industry” by visiting www.piac.ca, the website for the Public Interest Advocacy Centre (PIAC).

You can also read my response to the PIAC report on the Canadian collection industry by reading my blog Post on The Mark Silverthorn Blog on March 30, 2015, titled “Report on the Canadian Collection Industry Misses the Mark”.

Global News runs story on Canadian debt collection report

 

On March 30, 2015, Sean O’Shea of Global National News did a story following the release of a report on the Canadian collection industry by the Ottawa-based non-profit group Public Interest Advocacy Centre (PIAC), a group which promotes the interests of consumers.  Two individuals were interviewed for this Global National News story, Jonathan Bishop, the report’s author, and myself, whose book, The Wolf At The Door, is cited 57 times in the report.

screenshotglobalinterview

You can watch this Global News story by clicking on the following link:

Global National News runs story on PIAC report on Canadian collection industry

Anyone who wishes to read the 96-page report titled “All Along The Watch Tower:  A Review of The Canadian Consumer Debt Collection Industry” can visit www.piac.ca, the website for the Public Interest Advisory Centre.

You can read my comments regarding this report by reading my blog Post dated March 31, 2015 on The Mark Silverthorn Blog.

 

Are you a collection industry insider?

 

Please feel free to contact me and provide me with information on an anonymous basis, unless you desire that your identity be made public.

Mark Silverthorn has confirmed the accuracy of the list set out below by speaking with his network of contacts in the collection industry.

 

How well do you know the collection industry in Canada?

If you can identify the missing title for the following list then you can call yourself a Canadian collection industry insider:

 

The ***  #### in Canada

Total Credit Recovery Ltd

Affinity Global

CBV Collection Services Ltd.

NCO Financial Services Inc.

Allied International Credit Corp.

ARO Inc.

Gatestone & Co. Inc.

MJR Capital Services Inc.

EOS Canada Inc.

D & A Collection Corporation

Credit Bureau of Canada Collecitons

Iqor Canada Ltd.

Metropolitan Credit Adjusters Ltd.

Tricura Canada Inc.

Commercial Credit Adjusters Ltd.

Credit Risk Management Canada Ltd.

Financial Debt Recovery Ltd.

Common Collection Agency

Allianceone Ltd.

Partners In Credit INc.

GECG Collections Co/Society de Recouvrement GECF

St. Catharines Credit Corporation Ltd.

General Credit Services Inc.

International Credit Experts Inc.

City Collection Company Ltd.

Suite Collections Canada Inc.

CCL Financial Inc.

North American Receivable Management Services Company

ARM Collection Agency Ltd.

Action Collections and Receivables Management

A-1 Credit Recovery & Collection Services Inc.

Bond Street Collections Inc.

Excel Collection Services Ltd.

Pomer & Boccia Professional Corporation

Collectrite of Hamilton Ltd.

Kingston Data and Credit Inc.

Groupe Solutions Credit

C.G.C. Collection Group of Canada Inc.

C.B. Cameron & Associates

Credit Bureau of Timmins

Mac Financial Recovery (Canada) Inc.

Skylink Receiveables Inc.

Groupecho Collection Canada Inc.

National Credit Recovery Inc.

Contract Resources Services Inc.

National Recovery Corp.

Canadain Credit Corporation

Northstar Location Services, Inc.

Advanced Collection Services Ltd.

Go Beyond Collection Agency Inc.

Collectrite Ontario Inc.

Unik Collectrite Inc.

Crelogix Portfolio Services Corpoation

Carfinco Inc.

Canada Bonded Attorney and Legal Directory Ltd.

Phillips & Cohen Associates (Canada) Ltd.

Collection Service of Windsor Ltd.

Case Receivable Management Inc.

CTL-WDW Ltd.

Canada Legal Referral Inc.

Priority Credit Recovery Inc.

Credit Bureau Collections Ltd.

Integrated RM Inc.

Collection Recovery Systems

Credit Bureau Collections

Credit Central Control Ltd.

Continental Legal Services Corporation

Shellco Credit Systems Ltd.

Northumberland County Collection Service Inc.

GCQ Canada Inc.

Icollect.com Corp.

 

If you want confirmation that you can identify the correct title for the above-noted list then you are welcome to send an e-mail to Mark Silverthorn at mark@comprehensivedebtsolutions.ca

If you would like to learn more about the Ontario Collector Database, a list of more than 4,000 collectors employed by third party collection agencies in Ontario then you are weclome to contact Mark Silverthorn by calling toll free (866) 996-9941 or (519) 827-5513, or via e-mail at mark@comprehensivedebtsolutions.ca..

 

You are welcome to call Mark Silverthorn and to speak to him on a private and confidential basis.

You are welcome to call Mark Silverthorn and to speak to him on a private and confidential basis.