New Ontario rules meant to crack down on unscrupulous debt collectors

[SLM]

New Ontario rules meant to crack down on unscrupulous debt collectors

Craig Wong, The Canadian Press
Published Sunday, June 28, 2015 10:21AM EDT

OTTAWA -- New rules in Ontario to better protect consumers from unscrupulous debt settlement companies come into force this week, but bankruptcy trustees says those in financial trouble seeking help still need to be cautious.
Trustee Doug Hoyes says unscrupulous companies that were taking advantages of borrowers in trouble have already closed up shop in anticipation of the new rules taking effect.
However, he says the new regulations set up a possible conflict of interest for collection agencies that will also be able to offer debt settlement services.
"It certainly opens the door for a different form of collection activity," said Hoyes, co-founder of bankruptcy trustee firm Hoyes, Michalos & Associates Inc.
"You're getting a phone call to collect your cellphone bill, and now you feel a lot of pressure because all of a sudden this guy on the phone also says you can deal with your other debts as well. What are you going to do?"
Ontario announced in 2013 that it would join provinces like Alberta, Manitoba and Nova Scotia in making changes to the rules amid increasing complaints about debt settlement companies including unclear or misleading contracts, high fees and a failure to reduce debts as promised.
The new rules that take effect Wednesday will not impact bankruptcy trustees who are already regulated by Ottawa and covered by federal rules that govern their conduct and what they can charge.
The new Collection and Debt Settlement Services Act replaces the Collection Agencies Act.
The rules put an end to upfront payments charged by debt settlement services other than a nominal amount and they place limits on the amount that can be charged.
Debtors also get a 10-day cooling off period during which they can cancel a debt settlement services contract with no reason.
However, Andre Bolduc, a bankruptcy trustee with BDO Canada, says the provincially regulated debt settlement companies aren't a replacement for federally regulated trustees.
"It is important for consumers to still do their due diligence, still do their homework, to do their research and make sure when they do get help that they get help from qualified individuals," he said.
Trustees are obligated to review all the possible options for clients up to and including a bankruptcy filing.
Bolduc said many of the clients he's seen in recent years first tried to get help from a debt settlement company before dealing with him.
"They spent a lot of money for no reason," he said. "Now hopefully maybe they'll come straight to us or they'll go straight to reputable credit counselling industry players."


New Ontario rules meant to crack down on unscrupulous debt collectors | CTV News

 

[B00Mer]

Friggin bunch of Hucksters. I'd rather see the CEO's of these collection companies in jail than on the run to a different jurisdiction.

Next stop Quebec.??

 

[lone wolf]

I wonder how that works with Hydro One and student loan collections?

 

[B00Mer]

I wonder how that works with Hydro One and student loan collections?

Isn't there a statute of limitations on a debt, even for government.. after a certain amount of time if they don't sue and get a judgement they have no real means of collection.

After 7 years it's history on your Credit Report.. well suppose to be, until some shady collection agency that purchased the debt tries to scare an old lady out of her pension check on a 20 year old debt she forgot about..

Just say'in.

 

[SLM]

Friggin bunch of Hucksters. I'd rather see the CEO's of these collection companies in jail than on the run to a different jurisdiction.

They're horrible! I remember a few years back when I still had my land line, I kept getting calls from one place leaving voice mail messages. And it was always, always someone with a very thick and heavy accent asking for someone who's name was unintelligible the way she was saying it, same first letter as my first and last name though with no mention as to what it was about (what debt it was about). Now I promptly checked Equifax (you never know, sometimes you forget an old cell phone account that was closed or whatever) but there was nothing registered under my name.

So now I'm 99% sure they were just fishing. And I wonder how many fall for that and end up paying something to just stop the harassment?

 

[lone wolf]

Isn't there a statute of limitations on a debt, even for government.. after a certain amount of time if they don't sue and get a judgement they have no real means of collection.

After 7 years it's history on your Credit Report.. well suppose to be, until some shady collection agency that purchased the debt tries to scare an old lady out of her pension check on a 20 year old debt she forgot about..

Just say'in.

There was a 6 year statute until 2004 on student loans in Ontario. Now, they can pester til doomsday - just like CRA. In 1999 - and six years after the accident - I applied for loan forgiveness due to disability from a 1986 student loan. They stopped cashing my cheques and I never heard a thing from them again until mid-2006 when Total Credit Recovery called courting. They can play tricky head games, threaten and harass all they want - but they can't get blood from a stone. I keep putting the MPP on them and they leave me alone for a while - until someone hits the harass-me button again. Gets a bit annoying after a while - but I sort of get the idea I may be the prototype obstinate call they try new angles on.

Hydro? They just play extortion games because they can. They'll set up a payment plan with clients then cut you off immediately if, for any reason, you don't keep them paid up. Thankfully, I haven't been that route - even though the bills are getting crazy.

 

[Dixie Cup]

Student loans can be included in a bankruptcy if you have been out of school for at least 7 years. As for not declaring bankruptcy, depending on the size of the debt, it may well be written-off eventually. Then again, it may not.


I suspect if you had a CRA debt, a student loan that was at least 7 years old and you owed Hydo One and you declared bankruptcy, after all your bankruptcy duties were done you'd be debt free!


Oftentimes, CRA will tell someone specifically to declare bankruptcy because they don't have a hope in hell of ever paying their tax debt - this applies mostly to those who are self employed and "hate" paperwork. Seems to me self-employed individuals should be required by law or some regulation to take a one or two day course as to what their obligations are in keeping good financial records and paying their bills before being allowed to even be "self-employed".


JMHO