Collection Agencies - debt validation letters - Canada

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RE: debt validation letters

Postby fightback » Sat Mar 20, 2010 01:19:29 AM

From the web, thoughts anyone.

You could try to use debt settlement methods with a collection agency, but you might want to try debt validation first. Why? Because they may not even be legally entitled to collect the debt from you.

Think of it in these terms: Even if you suspected you might owe Joe (original creditor) some money, and Bob (collection agency) came up to you and asked for Joe's money - would you just hand over the cash? No. No one would. These might be some of the thoughts you would have:

1.How do you know that Bob is actually collecting for Joe? What legal documents does Bob have to prove that he is legally authorized to collect?

2.How much is the actual debt? What payments have already been made on the account? Where is the accounting of the debt, including all interest and fees? Are these fees and interest amounts legit?

3.Do you really owe Joe the money? Or was it actually a third party, Sam? Where is the contract showing that you made a deal with Joe and not Sam?

If you keep all the legalese out of it when thinking of legal proof, you'll have an easier time figuring out what to ask a collection agency (Bob) for to validate a debt.

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RE: debt validation letters

Postby Marquisse » Thu Mar 18, 2010 05:00:29 AM

I'm not going to argue the finer points in the law, to which I am not well versed to the point of quoting. However, a C/A, showing reasonableness, would want to validate the fact that this debt is collectible by them, and such things include their license to practice in the province (which they need to provide, otherwise little would be available to the debtor to determine a scam operation versus legitimate collection activity) - especially if the matter goes to court.

This letter is a debt validation letter, a cease and desist, and a dispute pending backup, failing which it does recommend commencing legal action. All of the ingredients are present in accordance with legislation to end contact (as defined).

It's an attempt to haul off their brutish ways in which they violate the laws, demand backup (which would be provided at court in any case), and show them that the debtor is aware of the legislative requirements incumbent upon them to practice in the province. It does not provide, nor is it meant to provide, a watertight defense against future attempts at collection, and it does not prevent an agency from collecting monies owed by the debtor. What it is, is a letter requesting all of the evidence to show that this isn't some illegitimate debt, that they are collecting legally, and is the first step in the disclosure process. It is also a strategic letter, drafted on the basis that court proceedings may follow. If the C/A provides the debtor with this information, negotiation based on the evidence they have may result. If it doesn't, then the C/A has the paperwork, sent to the debtor as well, to initiate proceedings. If they do not provide the backup requested, they disparage themselves if an action is commenced and the debtor can show an attempt to resolve the dispute prior to wasting court time. If they fail to provide the information requested, in good faith, by the debtor, then an argument can be made that the C/A made little attempt to cooperate with the debtor to resolve the claims, and, in some cases (depending on the action of the C/A) harassed the debtor.

It is up to the debtor to correct their bureau information, and the demand to remove disparaging information was included only to drive the point home that proof of legitimacy is required.

This advice I received was from a litigation lawyer, well versed on tactic, and the requesting of validation from a debt settlement/management professional. For me, it's worked. And, for what it's worth, I would like the original contract because I want a copy of the fraudulent use of my credit, complete with fraudulent signature, because with that information I will go to the police to report the inlaw who did this to me. Once I have the police report, I will produce a copy to the C/A, the bureaus, and go from there.
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RE: debt validation letters

Postby Ottawa_Chap » Wed Mar 17, 2010 08:04:26 PM

Monty, not trying to trump you here, but I've had this in my database for sometime now, and as many know, have benefited from various sections of this act on several occasions - most notably when I've quoted it in the Cease and Desist letter I use.

http://www.e-laws.gov.on.ca/html/source/regs/english/2006/elaws_src_regs_r06103_e.htm

ONTARIO REGULATION 103/06
made under the
COLLECTION AGENCIES ACT
Made: March 29, 2006
Filed: March 31, 2006
Published on e-Laws: April 3, 2006
Printed in The Ontario Gazette: April 15, 2006
Amending Reg. 74 of R.R.O. 1990

Various sections removed - See above link for full Act

22. (1) If a debtor sends a collection agency or collector, by registered mail, a letter stating that the debtor disputes the debt and suggests that the matter be taken to court, the collection agency or collector shall not thereafter contact or attempt to contact the debtor, unless the debtor consents to or requests the contact.
(2) If a debtor or his or her lawyer sends a collection agency or collector, by registered mail, a letter requesting that the collection agency or collector communicate only with the debtor’s lawyer and setting out the lawyer’s address and telephone number, the collection agency or collector shall not thereafter contact or attempt to contact the debtor other than through the debtor’s lawyer, unless the debtor consents to or requests the contact.
(3) No collection agency or collector shall contact or attempt to contact the debtor’s spouse, a member of the debtor’s family or household, or a relative, neighbour, friend or acquaintance of the debtor unless,
(a) the person being contacted has guaranteed to pay the debt and the contact is in respect of that guarantee;
(b) the debtor has requested the collection agency or collector to discuss the debt with the person being contacted; or
(c) the collection agency or collector does not have the debtor’s home address or home telephone number and the contact is for the sole purpose of obtaining the debtor’s home address or home telephone number.
(4) No collection agency or collector shall contact or attempt to contact the debtor’s employer unless,
(a) the employer has guaranteed to pay the debt and the contact is in respect of that guarantee;
(b) the debtor has given the collection agency or collector written authorization to contact the debtor’s employer;
(c) the contact occurs only once and is for the sole purpose of confirming one or more of the debtor’s employment, the debtor’s business title and the debtor’s business address; or
(d) the contact is in respect of payments pursuant to,
(i) a wage assignment given to a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994, or to a caisse populaire within the meaning of that Act, or
(ii) an order or judgment made by a court in favour of the collection agency or collector or of a creditor who is a client of the collection agency or collector.
Infuriating one C/A at a time..
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RE: debt validation letters

Postby montyloree » Wed Mar 17, 2010 05:51:59 PM

I spoke with Ontario Consumer Protection today.
They indicated that if you send a letter to the collection agency saying that you dispute the debt, and ask them to have the matter judged in court, then the collection agency is required to stop calling.

You need to send this letter by registered mail.
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RE: debt validation letters

Postby fightback » Wed Mar 17, 2010 03:19:07 PM

No I agree with you I don't think this kind of letter can stop the collection of the debt.
I think it can or should be able to stop calls though buy using federal or provincial collection laws in the letter.
As you say could be I am interpreting more broadly,If and when it gets to court probably you would be asking for most of this information in a defense statement anyway.
One thought is as you say "sauce for the goose", the other is the possible escalation by the c/a.
I might be about to find out, complained to the FCAC about a bank calling, the bank has stopped. Now we'll see if they negotiate a settlement or try to ramp things up.
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RE: debt validation letters

Postby RichardC » Wed Mar 17, 2010 02:32:03 PM

I don't see anything that you posted below that references a debt validation letter having any power to stop calls or effect the collection of a debt.

I still think you guys are reading too far into the respective acts and trying to apply a US technique to Canada. The language is very specific and you are interpreting it more broadly. Remember I am a former collection industry insider and was on the other side of the fence for years, I know these acts pretty well.

For example you pasted this below.

(j)attempt to collect payment of a debt before having provided, or having made all reasonable attempts to provide, a written notice containing the following information to the debtor in a manner that ensures the privacy of the notice:
(i)the name of the creditor;
(ii)the balance owing on the account;
(iii)in the case of a collection agency or branch office of a collection agency, the name of the collection agency as shown on its licence;
(iv)in the case of a collector,

You are missing some of the points in this section relevant to it but I "get" what you are looking at; all a collection agency needs to do to satisfy this above is send a letter by snail mail to your last know address with those details. Thats it, as long as their electronic notes reflect that they are fine. And thats done automatically on every new assignment. Trust me on this, most agencies know what you are doing here with this and are totally compliant.

But hey if it works on some of them thats awesome too; I mean draft statement of claims (even though they are not worth the paper they are on) scare people into paying so if this technique achieves the goal of getting some collection agencies off your back, thats cool too.

What's good for the goose is good for the gander.
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RE: debt validation letters

Postby fightback » Wed Mar 17, 2010 01:31:49 PM

(j)attempt to collect payment of a debt before having provided, or having made all reasonable attempts to provide, a written notice containing the following information to the debtor in a manner that ensures the privacy of the notice:
(i)the name of the creditor;
(ii)the balance owing on the account;
(iii)in the case of a collection agency or branch office of a collection agency, the name of the collection agency as shown on its licence;
(iv)in the case of a collector,

(A)the collector’s name, as shown on his or her licence, and
(B)the name of the collection agency for which the collector is attempting to collect the debt, as the collection agency’s name is shown on its licence; and
(v)the authority of the collection agency, branch office of a collection agency or collector in respect of the collection of the debt,

This is from the NB collection Agencies Act, it appears to cover most of the requests in Marq letter.
While not explicitly covering every request for information the ones outside its scope would appear to be minor.
Also

14(2)No collection agency or branch office of a collection agency shall
(a)commence or continue a legal proceeding for the recovery of a debt in the name of the collection agency unless the debt has been assigned to the collection agency in good faith by written instrument for valuable consideration and written notice of the assignment has been provided to the debtor,
(b)commence a legal proceeding for the recovery of a debt in the name of the collection agency if the debt has been assigned to the collection agency, or recommend to a creditor that a legal proceeding be commenced, before having provided the debtor with written notice that the collection agency or branch office of a collection agency intends to commence the proceeding or recommend that the proceeding be commenced, or
(c)notwithstanding any agreement to the contrary between a debtor and a creditor, collect or attempt to collect from the debtor, on behalf of the creditor, any amount of money that exceeds the amount owing by the debtor, including, but not limited to, any charges made or incurred by the collection agency or branch office of a collection agency and any charges incurred by the creditor for the services of the collection agency or branch office.
Where is your area of concern Richard?
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RE: debt validation letters

Postby RichardC » Wed Mar 17, 2010 12:02:25 PM

Marq, actually I was also looking for the specific part of the act that you were relying on for the "validation" of debt letter. Can you copy/paste? I'm just not aware of any debt validation language in any acts.

Letters like yours below have arrived at collection agencies for years, and if the calls stopped it was because they felt it was a waste of time to waste resources on someone who was clearly not interested in paying. Proof would be provided if they decided (or could) go to court.

Other collectors or agencies would actually just escalate their collection efforts out of spite on your letter. Validation in Canada was mostly considered a boiler plate, much like the draft statement of claim lawyers used in connection with collection agencies today. Its a scare tactic used by debtors against creditors.

I'm just not sure you stumbled onto any part of an act that can be relied upon to really cease & deist activity. If you have I would love to be your student and learn from you here.
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RE: debt validation letters

Postby Marquisse » Wed Mar 17, 2010 11:35:37 AM

Thanks. I got some from a letter I found online (maybe even this forum, I think), some from an advisor in debt matters, and the rest of it is mine due to revision. So, I guess it's mine. Together they make a debt validation letter, along with a cease and desist. Fightback, you could send this letter first, as my first letter did not stress the debt validation, but instead stressed the cease and desist from contacting me as is defined in the Collection Agencies Act of Ontario.
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RE: debt validation letters

Postby fightback » Wed Mar 17, 2010 10:48:02 AM

Thanks Marquisse, great to have this. Thats taking control, I think I.d just send that one and forget the cease and desist letter.

Or would that be missing a crucial step?
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