Often, our office gets asked by consumers how they can deal with collection agents from other agencies that are screaming with them, refusing to take payment arrangements, threatening action they have no right to take, or generally not allowing them to resolve their accounts. When a consumer offers to pay their account to the best of their ability, and the agent is being difficult or unprofessional, this is simply uncalled for!
It might seem odd that a collection agency would offer advice on this, but consumers who want to deal with a difficult collection agent and arrange payment should do the following to resolve their claim in a amicable manner:
1. Return The Collection Agent’s Calls: Often collection agents become frustrated because they cannot maintain contact with a consumer. If the agency has called, get back to them. If you are having difficulty reaching each other, ask for the collection agent’s email address to communicate with them in writing.
2. Offer Something Concrete: Understand that a promise is simply that – a promise. Often collection agents have real deadlines from the creditor to resolve your claim, and actions speak louder than words.
a. Offer a payment schedule – this payment schedule should be realistic and timely. Offering your first payment three months from now is not reasonable, but payments starting within two weeks certainly is. And whatever you do, keep your arrangements! If your proposal to pay is a huge stretch, or is based on iffy circumstances, failing to keep your arrangements isn’t going to look good.
b. If you can’t pay in full, back up your reasons. Provide a brief income and expense list showing your demands of other creditors.
c. Make a good faith payment to show you are serious about resolving it. The amount isn’t important – the action of making a payment proves to the creditor and the collection agent you have intent to pay.
3. Be Reasonable: Your creditors have probably been awaiting payment for some time, and your file has probably been sent to collections because they have little faith you will pay your account. If you have the means to pay your account in full, do so. If you don’t, make a reasonable offer. If the collection agent pulls your credit bureau and sees you are driving a $60,000 Mercedez-Benz, and you are offering $50 a month, you can understand how that might look unreasonable. That being said, *if* the collection agent takes your claim to court, *if* they get judgment, and *if* they garnish your wages, they can receive 20% of your wages – this can be used as a measuring stick for what is reasonable.
4. Understand the Collection Agent’s Role: Remember that you are listed with a collection agency because the creditor believes you owe money. The collection agent is not customer service for the creditor, is not a credit counseling firm, is not working for you – their job is simply to collect the account or follow through with consequences. If you need something from the creditor, call them directly. If you have proof you paid the account, the onus is on you to find it and present it to the agency. Remember that the creditor has instructed the agent to collect the account in full, immediately, and if you are looking for anything different, you need to provide proof, or documentation why the circumstances should be changed.
5. Don’t Panic! You would not believe the number of times I am told by debtors who are utterly distraught that the collection agent threatened to take them to court … over a small debt such as $300. This is a sign of an inexperienced collector, and is completely unreasonable. The chances of someone taking you to court for any amount less than $600 is slim. See our article here that deals with that in detail:
If you are panicking or emotional, you will not make rational decisions about your finances. Take a deep breath, and calm down. If your call with the collection agency is spiraling out of control, tell the collection agent that you are very upset right now and can’t speak rationally, and tell them you will call them back tomorrow (and make sure you keep your promise to call back).
6. Don’t Be Emotional: When you are speaking on the phone, if you are upset about your debt, or your financial situation, it may spur an inexperienced agent into an emotional response (it shouldn’t, but sometimes it does), so keep your voice calm and unemotional, stick to the facts, and don’t get upset. If the agent is being belligerent or raising their voice, do your best to keep calm in the face of it.
7. If You Can’t Resolve Your Own Affairs, Get Help: If you are drowning in debt and can’t handle multiple creditors, heavy compound interest or are intimidated by collection agencies, or are unable to keep your arrangements offered, there are services out there that can help you.
There are non-profit credit counseling firms out there that will assist you. To find one in your area, visit the Canadian Association of Credit Counseling Services at http://www.caccs.ca/.
If your debt load is simply too high for you to address, and you are going backwards, or cannot forsee being out of debt within seven years, filing with a trustee for a consumer proposal or bankruptcy is certainly a viable option – keep in mind a trustee will charge a fee for assisting you in the neighbourhood of $1,500.00 and there are restrictions on filing for bankruptcy more than once. For further information visit the website of the Superintendant of Bankruptcy of Canada at http://www.ic.gc.ca/eic/site/bsf-osb.nsf/Intro.
8. You Can Always Deal With Someone Else: If the collection agent is simply not working with you, there is always the option to deal with someone else at the agency. Often larger agencies have consumer ombudsmen or channels for complaint. However, if that fails, call in and ask for a manager. Collection agents often want to maintain control of a call, so if they refuse to put you through to someone else, politely end the call, and call the main line of the agency, and explain your problem (stating that you want to pay your bill, but the agent is not working with you).
You can always call the client as well, or pay the creditor directly. However, if you do resolve the account, make sure you mail a letter to the collection agency with proof of your payment so they know the matter has been resolved.
9. Get It In Writing: If you receive an offer of settlement from the collection agency, get it in writing! A verbal agreement can’t be proven, and isn’t binding. If you pay your account, get a receipt or keep proof you have paid your account, so if the matter comes up down the road, you can show the account was paid.
10. If All Else Fails: If everything you try prevents you from working with the agency, send them a letter in writing. Furthermore, you can cc (copy) the Ministry of Consumer Affairs or the creditor themselves if you feel you have been treated unfairly – keep in mind this best works if you explain you are trying to pay your account.
Other Information Sources
If you would like to see some information provided by the government about your rights as a consumer, here is a link to the Financial Consumer Agency of Canada that offers tips on dealing with collection agencies:
Sometimes, good people end up in collections. They want to resolve their account, and the collection agency is being an *obstacle* to payment, not a solution. This continues to boggle my brain, and I am not the only one – there are hundreds of complaints against agencies out there if you search the internet.
If you are having problems dealing with an agency, and you need some friendly advice from the collection agency viewpoint, feel free to contact myself at my Cambridge office, at 226-444-5695, or email me at email@example.com.
As well, as a community service, we offer a free monthly Credit Information Workshop to consumers in the Cambridge/Kitchener area on the fourth Monday of each month, offering impartial advice on how to deal with collection agencies, debt, and consumer rights. More information can be found here: http://www.eventbrite.ca/event/4021883562/es2?rank=1&ebtv=C
Kingston Data and Credit