My understanding is that you are dealing with the collection agency acting as agent for the university and are not dealing with the university directly.

Therefore, the letter that I suggested that you send should be sent to the collection agency and NOT to the university. That letter is only valid when it is sent to a collection agency registered in Ontario. It has no force of law sent to a university in the United States.

What a university can or cannot do, no one can answer that question except the university. They have their own internal policies and neither I, you, or the collection agency is privy to that information. You would have to contact the university directly and put the question to them.

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Educating one Consumer at a time

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Fair enough. Can the university then withold my transcript and degree if I send a letter stating that I dispute the balance?

Unless you are a signatory to a contract or agreement with the university regarding unpaid and defaulted tuition fees, the university does not have the right to charge you interest. If this matter ever got to a Pre-Trial Settlement Conference or even a Trial, the university could request the judge to make an order for Post Settlement or Post Trial interest. It would then be up to the judge as to whether to grant an order for interest. If an order was granted, the rate of interest awarded would be the rates set by Regulation in accordance with the Courts of Justice Act.

Please remember, this is an American University and many times, they can do things in the United States that are not allowed or permissible in Canada or Ontario. I'm sure the university has little or no knowledge of the laws in Ontario and are "flying by the seat of their pants".

As I stated in my previous post, "flush out" this debt by writing a letter to the collection agency and send it by registered mail stating that you dispute the balance owing and suggest that the matter be taken to court. That should settle this debt once and for all.

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Educating one Consumer at a time

Thank you for the information.

I have been in touch with the collection agency and they say that their "hands are tied".

Can the university, legally, ask for interest starting from day one, seven months into the repayment? Moreover, can they ask for interest after I have been repeatedly been sent updated balances without interest? I was told there was no interest on my account, and no paperwork shows any interest. Is this allowed, by law?

Please advise.

The collection agency acting as agent for the university in the United States can ask for interest but what they ask for and what they get are two different things. Write a letter to the collection agency and send it by registered mail stating that you dispute the balance and suggest that they take this matter to court.

Pursuant to the Collection Agencies Act, Regulation 74 Subsection 22(1) it reads as follows:

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.

The effect of this letter is that either the creditor has to initiate legal proceedings or cease all further contact with you vis-a-vis the collection agency. Assuming this debt was defaulted in Ontario, any legal proceeding would have to begin in the Small Claims Court in Ontario to which a representative of the university would have to attend to give evidence of the claim. In all probability, this matter will not proceed due to the cost and time involved and any balance remaining on this outstanding debt will "die a natural death".

However, if the university ( creditor ) decides to pursue this claim through the Small Claims Court by issuing you a Statement of Claim, report back on this website for further instructions as to how to proceed.

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Educating one Consumer at a time

Hi,

This past summer I was contacted by a collection agency in Ontario about an outstanding payment I have to a university in the United States. I was informed of my outstanding balance and mailed payment slips by the agency. I was not working at the time so was only able to make small payments on a monthly basis. However, I asked that my debt be negotiated to a payable amount and that I would pay it in a lump sum in January 2011.

I was informed that the university was not interested in negotiating any amont and that I was responsible for the entire $10 000. I made a payment of $8500 in January and requested an updated account balance. I was given a balance that far exceeded what was originally owed (balance of $6700) and not the $1500 it should have been. The person in charge of my account told me that the university has decided that they were going to add interest to the outstanding balance starting from the first day it went to collections! Now, having said that, when I made my first payment in the summer, I asked about interest and was told verbally that no interest was being added. Also, when I received the original payment slips, there was no mention of interest.

Is the collection agency allowed to ask for interest at this time?