Collection agencies gear up for busy season
Tiny Iceland found itself at the center of a financial controversy this week when it reneged on a decision to repay $5 billion to the British and Dutch governments, which had used the money to backstop domestic depositors in failed Icelandic bank, Icesave.
They better hope the account doesn’t go to collection, warns Mark Silverthorn, whose new book The Wolf At The Door details just how intimidating and stressful being hounded by a collection agency can be.
Predicting that more and more Canadians will start to default on consumer debt and be forced to seek relief through debt settlement, a consumer proposal or personal bankruptcy, Silverthorn is a sharp critic of the industry he once represented.
Most people are unaware of their rights when it comes to collection agents, he says, with the result that those agents who choose to break the rules often get away with it.
For instance, collection agencies can’t start calling until they’ve notified you in writing that they’ve been assigned to the account. Nor can they call at all hours of the night. But some do anyway.
Others are using social networking sites or cell phones to get overwhelmed consumers to pay up.
To protect yourself, deal with bill collectors in a forthright and professional manner, he suggests. But don’t allow them to bully you into making commitments that you know you can’t keep.
Have you had problems with a collection agency? Were you treated fairly?
By Gordon Powers, MSN Money
Posted by: Lisa | Jan 6, 2022 3:55:09 PM
No, gladly I've never had a problem with a collection agency. However, I was taught you DON'T spend money you don't have. I believe that if things are so bad that collection agencies ARE calling, you deserve just what you get. Simply put, NOTHING in life is free and they TRUSTED YOU in good faith...so pay up!!
Posted by: Joanne | Jan 7, 2022 12:56:56 AM
That is wonderful advice Lisa...for those people who are gainfully employed and able to meet the monthly requirements that it takes to run a household..not to mention the cost of items we need daily is skyrocketing out of control. I am in the collection business and know first hand that we have tons of customers who have defaulted on things like Hydro...this isn't careless spending..it's Hydro. I think it's time our government looked at debt in a new light. Sure, consumer debt may be a problem and should be dealt with, however, when a family has to decide between paying Hydro or buying food...this is an even bigger problem in my opinion. I think if given the chance to pay up over a long term, the majority of people would eventually pay the debt. However, most companies will not hold the debt that long and it's passed to an agency to collect. Money matters needs to be part of the education process too. We need to start educating our young people on how to handle money. I had collection agents calling me before. I had a dispute with one of the big three cell phone providers in Canada, but instead of trying to resolve the problem (after me being a customer for 10 years) they sent my account to a collection agency!!! OUTRAGEOUS! Anyhow, just wanted to clarify that collection agencies don't just collect credit debts. I am forced to pay for that cell phone service that I shouldn't have had to pay for! And there is nothing that I can do about it. Take them to small claims court for the $400...doesn't nearly seem worth it. I guess being a good and faithful customer for 10 years doesn't mean much these days!
Posted by: James | Jan 7, 2022 1:33:09 AM
Joanne wrote: "I am in the collection business and know first hand that we have tons of customers who have defaulted on things like Hydro...this isn't careless spending..it's Hydro."
And what crystal ball do you have that allows you to know they didn't spend their money on a lot of frivolous nonsense and that was what made them short for the hydro?
I know human nature too well and if there's a way that people will try to shirk their own responsibilities, they'll do it.
Based on what you wrote, I highly doubt you're in the collections business. Your entire tone when you related your own experience with the cellphone just screams, "It's not MY fault!!!"
I'll tell you something. If I had a dispute with a cellphone company, I would get it resolved long before it affected my credit or went to an agency. More than likely, you just decided that the cellphone company could "deal with it" and did nothing yourself to try to resolve anything, except for maybe screaming at them. If it was a contractual issue that I was wrong about, I'd have to eat the loss, pay my bill (even if it took several months) and move on. That's called being an adult and it's something in short supply these days, from what I can see.
Posted by: Big_Pimp_Daddy | Jan 7, 2022 5:16:44 AM
Collection agents are societies leaches and maggots feeding on others misfortunes...James seems to get aroused by portraying himself to be better then everyone else...but truth be told 19% interest rates are excessive and the industries greed is what put most be people in debt.
Posted by: Mattie | Jan 7, 2022 7:55:44 AM
Have any of you heard the term usury? Do you know what it means? Do you realize our entire economic system was created by usurers and legalized by governments?
The real leeches in our society are bankers and investors and stock traders and such, basically anyone that makes a living doing effectively nothing except handling and playing with money. This is really making money off of the hard work of the rest of us.
I know, 'That's the way the system works', and 'We need these people to keep the economy going'. This may be true at the moment, but where will these people be when North America's economy completely collapses in the next 20 - 30 years? What skills will these people have to sustain their own lives and those of their families besides effectively stealing from the rest of us? How long will the general public put up with this legalized thievery? (A good while, based on some of the comments above)
I agree that people should be taught to only spend what they have. Some of you are actually effectively taught this by your parents, and good for you. The fact is, there is a lot of pressure out there to buy, buy, buy all sorts of new and useless junk (ie. new clothes every season, new cars every 2 years, new computers once a year, etc.) and there are plenty of usurers willing to finance you to up to 60% of your earnings, in some cases more. This will and does get people in trouble.
This also does not just go for everyday people. Car manufacturer bailouts, bank bailouts, money is actually made up out of thin air for these things, and given by governments that themselves are in debt up to 5 times what their GNP is! This is the general public's education, people! It's not about being an adult, it's about being educated from a good foundation instead of a 'do as I say, not as I do' mentality.
Posted by: SP | Jan 7, 2022 7:57:32 AM
The government provides the banks our societies money at 0.5% --> 1% which the bank then offers out to consumers at 12% on a credit card (which is used by responsible consumers for items such as rental cars which cannot be rented without them). The banks then (because of their wall street etc gambling) raise credit card rates from 12% --> 25% or higher to cover their losses in other areas etc. Said responsible consumer (through no fault of their own) now has their expenses spike while their recession affected income drops. I understand that James and Lisa would never have to borrow money to buy a house, get their degree's or use a CC to rent a car but the rest of the people who aren't living off mummy & daddy's wallet do and these things can cause arrears.
As that as long as banks use fractional banking they should be barred from using collection agencies. Personally, I believe that all banks worldwide should be locally nationalized which would still allow recessions but minimize excess swings in either direction. Sadly though, as long as the Rothschilds offer Yacht parties in the Med that won't ever come to pass.
Posted by: Big_Pimp_Daddy | Jan 7, 2022 8:30:41 AM
Ya ... what Mattie and SP said
Posted by: Lisa | Jan 7, 2022 8:30:47 AM
Hey everyone! I agree with James, and Mattie too, for the most part.
I also agree "SP" that interest rates are ridiculous. This all comes back to "money rules."
As far as "SP" saying..."I lived off mommie and daddie."...I did! However, what you don't know is, when I left home, the door was getting slammed behind me by my own mother.
I lived, in the beginning, in a one bedroom apt. My boyfriend (which turned into my husband) and I made up new words to Rod Steward's song..."Who's going to bring me...(and we changed the words to a busted $20.) We had to make jokes, things were so bad.
There were times we DID go without MEALS (basics) because the HYDRO (basics) had to be paid first. Again, I was raised, you ALWAYS pay back what you owe.
And...by the way...if you DON'T like the interest rates on your cards, bargain with them. You can do that if you have GOOD CREDIT RATINGS.
What REALLY makes me mad now is...my husband and I have spent nearly 20 years working our way up...and it's been VERY hard but we've done it...and we're doing o.k. now. BUT...EVERYTIME I want something from my bank or even the grocery store now...I have to show ID. Why???
Well, too many idiots HAVEN'T paid up...and now I'M not trustworthy...even though I've had a clean record my whole life. THAT makes me mad.
Posted by: Don | Jan 7, 2022 8:44:52 AM
Well James, you must be in the collection business or just better than everyone else. Most likely have your own problems somewhere in your life though? Certainly many items that go to collection are the result of "lifestyle" choices. Never the less there is far too much lattitude with companies turning over items in dispute to Collection Agencies. The impact on your credit record is far too severe for the sake of $400.00 as was the example. So most people just pay it. If you've ever had to deal with some creditors on an error you will know what I mean. You get someone who will only deal with the information in front of them (the same incorrect information they sent you) who insists that you owe the money. They may get back to you but you know they still didn't listen to you about the error or where it may have originated. I know people will create a problem too, but for the sake of those with a legitimate complaint it shouldn't be as simple as sending it to the collection agency.
Posted by: Jimmy James | Jan 7, 2022 9:26:02 AM
**Note: The following is not legal advice**
Everyone should know that you don't have to pay a cent to a collection agency. You never signed any deal with a collection agency. The agency made a contract with the people you originally were in debt to, not with you. The collection agency buys the debt for pennies on the dollar so that the original debt holder at least gets something, and the collection agency covers the probability/risk of not getting paid. However that is a private deal between those two parties that has nothing to do with you the debtor - as long as you dont make any agreement to pay a collection agency you owe them nothing. Read that again people. If you dont agree to pay them (i.e. forming a new contract with the collection agency) then you dont owe them anything. As soon as you indicate that you really know your rights, the collection agency will leave you alone. Remember, you dont owe any money on a deal that you werent a party to. The original debt has been paid off by the collection agency when they purchased the debt from the original debt holder so when a collection agency calls you all you have to do is indicate that you do not wish to contract with them and thank them for being so helpful. Then tell them that you will not accept any further verbal communication and anything they wish to send you should be done through registered mail for your records.
Once again, this is not legal advice and please dont take it as such. If you require legal advice speak to your attorney.
Posted by: Rick | Jan 7, 2022 9:35:24 AM
Although I would admit that there are many true hard luck stories about having to choose between one essential or another, I have seen all too many cases where the sad truth of the matter is not that the people are broke, but it's a matter of where they choose to spend their money.
To give you an example, I have spent the last 20 Christmas seasons delivering Christmas hampers of food & gifts to families who are supposedly poverty stricken. They would be living in the rented basement of a house and you'd see them all sitting in the cold air wearing their winter coats because they didn't have much in the way of heat, but yet you'd see a pile of empty beer cases in the corner along with several cases waiting to be consumed (most admit to drinking at least a case per day), both parents smoked at least a pack of cigarettes per day, and they had a big screen television with the deluxe cable package. On top of that, many were regular bingo players because I also worked those for my service club and saw them there all of the time. Many of them play more than once per week as well.
Work out what they're spending... A case of beer per week, even at $30/case comes to $1500, two people, each smoking a pack of cigarettes per week at $50 (for round figures - it's probably higher), per carton of 10 packs comes to $3650, bingo (weekly, but many go even more often, excluding the nevada tickets that many buy there) for an average of $40 spent per couple on the basic bingo sheet and "specials" (i.e. not spent, but lost - it's gambling after all) amounts to approximately $2000 per year.
These three un-necessary items alone would save them over $7000 per year AFTER TAXES! That would pay for alot of hydro, heat and food if you ask me.
And this doesn't include a very common addiction to lottery tickets, which many of these people have admitted to as well.
I'm sorry if I seem callous, but from what I've seen, this is not an uncommon occurrance.
Posted by: burnitdown | Jan 7, 2022 10:04:18 AM
18-35% intrest rates should not even be legal. The bookie or loan shark in the pub will almost always charge less than 15% to borrow. Even if you don't pay and he shoots you it would be more pleasant than dealing with a collection agency.
Posted by: sg | Jan 7, 2022 10:45:43 AM
beer is good...
God is great...
people are crazy...
Posted by: Barry | Jan 7, 2022 10:51:20 AM
Sorry but the people defaulting shoulld stop smoking,drinking,eating out,wasting money they dont have. Stop asking for handouts and live within your means. More people need to get working and stop sitting on their asses!!!
Posted by: Soozee | Jan 7, 2022 11:50:30 AM
You'll all pardon me when I say this but if you have EVER been on the end of the collection agency then your opinion about MY carefree spending and not bothering to make a payment would not have even entered your mind.
I had impeccable credit just over 7 yrs ago. Such impeccable credit that I bought a house for myself and 2 children to live in after my separation. As well, 9 months after my move, I also financed a $20 000 vehicle to replace the one that was written off in an accident which was NOT my fault. What happened after that? Insurance company takes their time but the bills don't care, nor do the CC companies. I had to make the first payment on my new truck with my line of credit. I did this thinking the insurance company would have gotten their crap together in 7 mere weeks!!! I lost my job, I lost my good credit, I had to resort to various charities for help with food and Christmas that year. They hounded me HUGE! I tried to explain the situation. I tried to make restitution. They would have no part of it. They wanted their money (rightly so) but they wanted ALL of it at one time! I ask you, Do you have a spare $5000 just KICKING around for such an event??? Most, I am sure, would say HECK NO! I am still trying to clean up the mess. I had that card for 17 yrs! I missed one, yes ONE payment! Oh and I DID NOT DRINK IT, SMOKE IT OR TAKE IT OUT TO DINNER EITHER!!!
Posted by: Dee | Jan 7, 2022 12:28:17 PM
Soozee, right on the money. James... you must either work for a collection agency or you are God... or you think you are.
I was raised in a very poor household by a mother who ALWAYS found the money to pay her Mastercard off. We collected bottles in the 80's as a child to pay it. I didn't have everything given to me, but what was given to me was the moral obligation to pay my bills. Then, I had to move out on my own at 16 years old. I was the only person in my graduating high school class that was working full-time at 2 jobs while attending high school. I refused to get the credit cards they were throwing at teenagers, and only paid cash. Then, something truly pathetic happened. My bank account was $50 short of my rent cheque, and the bank I had been dealing with my whole life high me with a $30 NSF fee and bounced my rent cheque. Because I got the place on a prayer to begin with because of my age, I got booted. (even after my grandpa gave me the money to pay it back, the landlord decided they didn't want a high school student there that was "obviously" not trust worthy) My grandpa and I went to the bank to fight for my NSF fee back, and what led to that was me getting calls because the landlord (a large company) sent me to collections. Because I didn't give 30 days notice on my eviction. Yes... makes perfect sense.
The point I am trying to make here: I am now a 33 year old mom of 2 kids, my credit is impeccable, but back then, because of one misunderstanding and the lack of understanding on the bank's part, they tried to ruin my credit. Don't EVER assume that everyone that doesn't pay their Hydro is hard up, and don't EVER assume that all people that can't make their credit cards payments are just spendthrifts. Stereotypes are what make nations ignorant, and ignorance causes wars.
Posted by: Rick | Jan 7, 2022 1:28:56 PM
Soozee: As I said, I am sure that there are many cases of hard luck and hard times - to assume otherwise would be foolish. I have great compassion for people who go through that and I hope that I never have to. My wife, before we were married can attest to dishonest insurance companies. Her father had a very high end restaurant in Miami, FL and when it was burned to the ground with a bunch of other businesses in a streak of arson, the insurance company paid one of his relatives to testify in court that they had seen the son set the building on fire. The "witness" even came clean once he discovered that he has terminal cancer. My wife's father had a large staff and paid them all a very generous severence (he wasn't rebuilding due to his age), which basically amounted to all that he had, including his assets. In a nutshell, he went from being a millionaire to being on the street.
What I am saying that in my experience though (I don't know what else to go on), I have seen more cases where people have lived beyond their means but complain about being broke, and my experience delivering 4000+ Christmas hampers over 20 years and my observations while doing so speak for themselves.
Heck, even my sister who makes alot more money than I do complains about not being able to pay off her credit cards (I constantly hear things like... "I'm broke, I'm broke, but we just spent the weekend in a wonderful suite at the Chateau Laurier hotel in Quebec at over $1000 and we even tipped the wonderful staff over a hundred bucks... but I'm broke now.")
Posted by: bill | Jan 7, 2022 1:38:28 PM
Jimmy James and everyone else: Debt collectors are just people who needed a job like the rest of us so answer the phone and roll with it. Call centres are also a major Canadian employer so everyone just treat everyone with respect. Yep. Whatever happened to the concept of just dealing with things and moving on?
Posted by: bill | Jan 7, 2022 1:40:36 PM
Oh, and I HAVE had collection agents call me. Remember, they're just a random voice on the phone. Who cares? Remember, it's never a personal thing (usually :p)
Posted by: jade | Jan 7, 2022 2:39:43 PM
As a small business owner doing residential construction in this economy; I am subjected to collection calls on a regular biases. I do however agree that, they are entitled to payment. But, when I get a call from some prick who speaks to me as if he/she caught me producing child porn while robing his/her grandmother; I can honestly say that I would rather reach through the phone and slap him in the head then pay! Yes they are just doing a job but, it is unnecessary to treat people in that manner. And for what?... 10.25$ an hour! Due to the economy it has been feast or famine in my house for the past two years! It was blood, sweat and tears to start this company...and "NO" we don't drink away the profits! Everyone falls behind at some point for various reasons (not necessarily due to negligence) Unless you have family to bail you out every time things don't work out; sooner or later you will (for one reason or another) deal with a collections call! Despite the opinions of the first two who commented......it's not something to be ashamed of but, something to work through! and clearly they are among those of us who, have family to bail them out. I would rather "rough it out" and be proud of my accomplishments when it's over.