I live in Vancouver.  I have been receiving collection calls from a law firm in Ontario.  This law firm has also sent me a letter with a three page document enclosed, something the lawyer refers to as a ”draft Statement of Claim“.

Is this lawyer breaking the law sending me this letter?   What should I do?

Answer

This practice might be illegal under the British Columbia Business Practices and Consumer Protection Act (BCCPA).  In most provinces lawyers engaged in debt collection work are exempt from provincial law regulating the conduct of those doing debt collection work.  However, it would appear that the definition of “collector” in s. 113 in the BPCPA is so broad in scope that it includes anyone doing debt collection work; creditors, collection agencies and lawyers.  This means that creditors, collection agencies, and lawyers might all be subject to the identical code of conduct when they are attempting to collect monies from a B.C. resident.

Section 113 of the British Columbia Business Practices and Consumer Protection Act reads as follows:

113.  In this division, “collector” means a person, whether in British Columbia or not, who is collecting or attempting to collect a debt.

I would draw your attention to  section 123 of the British Columbia Business Practices and and Consumer Protection Act which reads as follows:

123.    A collector must not do any of the following, whether on the collector’s own behalf or on behalf of another person, directly or indirectly:

(a)  supply any false or misleading information,

(b) misrepresent the purpose of the communication,

(c) misrepresent the identity of the collector or, if different, the creditor, or

(d)  use, without lawful authority, a summons, notice, demand, or other document that suggests or implies a connection with any court inside or outside of Canada.

Included in a lawyer’s draft Statement of Claim collection letter, as an enclosure, is an imitation of a court form.  Therefore, it would appear that a draft Statement of Claim collection letter sent by a lawyer to a B.C. resident is illegal as a contravention of subsection 123(d) of the Act.

The draft Statement of Claims that I have seen suggest that a consumer, regardless of what province they live in, will be sued in Ontario Small Claims Court or, possibly in the case where monies owing to a creditor is more than $10,000, in Ontario Superior Court.  Suing a consumer in Ontario may not be permitted under the rules of civil procedure in a particular province that determine the specific jurisdiction in which a court action may be commenced.  Therefore, the draft Statement of Claim you have received might contravene subsection (a) of section 123 for providing false or misleading information.

I have reason to believe that one or more lawyers who are sending out draft Statement of Claims might be misrepresenting the identity of their client, something that would appear to be illegal under subsections (a) and (c) of section 123.

You might want to file a complaint with the British Columbia Business Practices and Consumer Protection Authority.  Their website is www.bpcpa.ca and their toll free phone number is 1 (888) 564-9963.  Ideally, you should make a written complaint to their office as opposed to a complaint over the phone.  You should send them a copy of any draft Statement of Claim that you have received, including the lawyer’s letter and the enclosure.

You might also want to forward a copy of your complaint to the British Columbia Business Practices and Consumer Protection Authority to the provincial law societies in both British Columbia and the province in which the lawyer sending you the draft Statement of Claim is licensed to practice law.  You can send your written complaint to The Law Society of British Columbia, Professional Conduct Department, 845 Cambie Street, Vancouver, BC  V6B 4Z9.  You can also call The Law Society of British Columbia at (604) 669-2533, [Toll Free in B.C. at 1 (800) 903-5300].  For more information about making a complaint to The Law Society of British Columbia you can visit their website at www.lawsociety.bc.ca, under ‘Public’, there is a reference to ‘Lawyer Conduct and Complaints’ which provides information on making a complaint, how to contact them, and how a complaint form can be downloaded from their website.

If the lawyer sending you the draft Statement of Claim collection letter has an office in Ontario then you may also want to file a complaint with The Law Society of Upper Canada, Osgoode Hall, 130 Queen Street West, Toronto, ON M5H 2N6, Attn.:  Complaints Department.  The direct line at The Law Society for complaints is (416) 947-3310.

I would ask that you forward a copy of any draft Statement of Claims that you receive, including the enclosure, to Mark Anthony Silverthorn Law Offices, Professional Corporation, 30 Duke Street West, Suite 1001, Kitchener, ON  N2H 3W5.  I would also ask that you send to my office a copy of any written complaint that you send to the British Columbia Business Practices and Consumer Protection Authority or to The Law Society of British Columbia.

I live in Sudbury, Ontario.  I recently received a letter from a lawyer demanding payment on behalf of a creditor I have never heard of before.  When I googled the name of this creditor I discovered it was a company located in the U.S. that described itself as a debt buyer.

The letter from the lawyer demanded payment of my account within 10 days of the date of the letter.  The lawyer’s letter also contained a 3-page enclosure marked “DRAFT” that the lawyer referred to as a draft Statement of Claim.  This enclosure would appear to be a form used in the Ontario Small Claims Court. 

There is something fishy about this letter.  I have been receiving phone calls from this law office demanding payment of my account.  The people working in this office sound and act like collectors at a collection agency and not like employees in a law office.  What do you suggest that I do?

Answer

I share your concerns about lawyers sending draft Statement of Claim collection letters to Ontario residents.  Senior Ontario government officials such as Brian Pitkin, the Ontario Registrar of Collection Agencies, have indicated that they believe a lawyer’s draft Statement of Claim collection letter may be illegal for contravening the Ontario Debt Collectors Act, R.S.O. 1990, Ch. D.4.  Section 1 of this Act reads as follows:

        1.      Every person, whether principal or agent, who prints or publishes a notice or form that is an imitation or a colourable imitation of any court form, and that is calculated to deceive the public by inducing the belief that such notice or form is a notice or form from a court, or is part of the process of a court, or who issues or makes use of such a notice or form in connection with a collection agency or otherwise, is guilty of an offence and on conviction is liable to a fine of not more than $20.

Furthermore, if you have received a draft Statement of Claim collection letter the lawyer might be sending you this letter to you at the request of a collection agency and not the creditor whose name appears on your letter.  Last year Brian Pitkin, the Ontario Registrar of Collection Agencies, wrote a letter dated October 27, 2008, to all collection agencies in Ontario, advising them that it was unacceptable for a collection agency to hire a lawyer to send a draft Statement of Claim to a consumer on the collection agency’s behalf.  Mr. Pitkin also indicated in his letter dated October 27, 2008, that it was unacceptable for a collection agency to hire a lawyer to send a demand letter to a consumer on behalf of a collection agency if the name of the collection agency was not disclosed in the lawyer’s collection letter.

If you have concerns about a draft Statement of Claim collection letter you have received from a lawyer you may want want to raise your concerns with both The Law Society of Upper Canada and Brian Pitkin, the Ontario Registrar of Collection Agencies.  You can make a written complaint to Brian Pitkin, at Brian Pitkin, CD, Registrar of Collection Agencies, 5775 Yonge Street, Suite 1500, Toronto, ON  M7A 2E5.

You can contact the Complaints Department at The Law Society of Upper Canada at (416) 947-3300 and your raise your concerns with them.  The website for The Law Society of Upper Canada is www.lsuc.on.ca   You may want to ask a lawyer in The Complaints Department at The Law Society if it is a contravention of the Ontario Debt Collectors Act or The Law Society’s Rules of Professional Conduct for a lawyer to send a collection letter to an Ontario resident in circumstances where the lawyer is using an imitation of a court document in an attempt to collect a debt. 

You can send a copy of a draft Statement of Claim that you have received, together with a letter setting out your concerns about its use, to The Law Society at The Law Society of Upper Canada, Osgoode Hall, 130 Queen Street West, Toronto, ON M5H 2N6, Attn.: Complaints Department.

If you do make a written complaint to either Brian Pitkin, the Ontario Registrar of Collection Agencies, or The Law Society of Upper Canada, I would ask that you provide my office with a copy of your complaint as well as a copy of the draft Statement of Claim collection letter that you received from the lawyer.

I live in Charlottetown, PEI.  One of my family members recently joined your Facebook page.  They said you are writing a new book on consumer debt issues and the front cover of your book has actually been posted on your Facebook page.  Is that correct?

Answer

Your friend is correct.  I do have a Facebook page.  Anyone who wants to learn more about consumer debt issues, particularly individuals who are interested in saving thousands of dollars eliminating unsecured consumer debt is welcome to join.  My username on Facebook is helpwithcollectioncalls.  Anyone who is interested in learning more about their options for dealing with their consumer debt is welcome to join my Facebook page.

It is true that if you go on my Facebook page you can see the front cover of my soon-to-be published book titled The Wolf At The Door:  What To Do When Collection Agencies Come Calling.  This book is being published by Canadian publisher McClelland & Stewart.  I anticipate this book will be on bookshelves in Canadian bookstores sometime around Christmas or early January.

I am sending you this Question further to our telephone conversation earlier today.  I live in Toronto, Ontario.  Today a collector from a collection agency called my residence.  She confirmed my home address.  This collector has also left voicemail messages at my residence the past few days.  At no time have I received any written notice from the collection agency that employs this collector despite the fact that her employer would appear to know my correct home address.

I was under the impression that collection agencies operating in Ontario were supposed to send a written notice to a consumer prior to making collection calls.  Is this collector breaking the law by calling me before her employer sends me a written notice advising me that their agency represents a particular creditor?

Answer

Under section 21 of Regulation 74 enacted under the Ontario Collection Agencies Act it is illegal for a collection agency to make a collection call to an Ontario resident unless the collection agency has sent a written notice, by regular mail, to the consumer six days prior to the collection call and this written notice is to include the name of the creditor, the balance owing, and the identity of the collection agency or collector demanding payment of a debt.  After I received your message I telephoned the collector you referred to and I spoke with her.  She confirmed that she had called your residence.  You have advised me that this collector already had your correct home address when she called your residence.  Therefore, one has to ask themself why this collector is calling your residence when you have not received a written letter from her employer as required under Ontario law?

My law office has received numerous complaints from Ontario consumers who have been receiving collection calls without first receiving a written notice from the collection agency that is attempting to collect the debt.  It would certainly appear that some collection agencies operating in Ontario are trying to save money by failing to comply with the legal requirement to send a written notice to a consumer prior to making collection calls.

I live in the Greater Toronto Area.  Recently I gave a collection agency verbal permission over the phone to withdraw $100 from my bank account and apply these monies towards my outstanding account.  Over the next 30 to 60 days the collection agency withdrew an additional $500 on two or more occasions from my bank account without my permission resulting in my bank account having a negative balance and my bank penalizing me with service charges.  What can I do?

Answer

I recommend that a consumer never give a collection agency permission to withdraw monies from their bank account–neither verbal permission nor written permission.  I have received a signficant number of complaints about collection agencies making unauthorized withdrawals from a consumer’s bank account after a consumer provided them with authorization to make a one-time withdrawal from the consumer’s bank account.

You can write a letter of complaint to the Ontario Registrar of Collection Agencies, as well as the creditor on whose behalf the collection agency is acting, and senior management at the collection agency.  You can also contact the police and attempt to have fraud charges laid against the collection agency.  If the police are reluctant to lay criminal charges you can arrange to attend at your local courthouse where criminal matters are heard and speak to the Justice of the Peace on duty that day.  After you explain to the Justice of the Peace what has happened the Justice of the Peace may be willing to have criminal charges laid.  When attempting to have criminal charges laid against a collection agency or collection agency employee it is important that you have all of the relevant information and supporting documentation including bank statements. 

You also may want to consider bringing a civil lawsuit against the collection agency and its employees in small claims court.

You may also want to call my office toll free at 1 (866) 996-9941 for a free 10-minute consultation.

I live in Calgary.  I owe $25,000 on three different credit cards.  I am having problems making the minimum monthly payments.  I am paying several thousand dollars in interest each year.  I see that your firm negotiates settlements on behalf of consumers.  How much money can you save your clients negotiating settlements?

Answer

Our firm’s goal is to eliminate a client’s current unsecured debt for less than half of what they currently owe.  This includes monies paid to creditors in settlements and our firm’s fees.  Please note that our firm cannot guarantee a particular result.  Last week my firm negotiated a settlement on a credit card debt.  The consumer owed more than $27,000 on their credit card.  Our firm was able to negotiate a settlement of $3,300, four payments totalling $3,300 over a 90-day period. 

If you want more information about how our firm can potentially save you money I suggest you call our office toll free at 1 (866) 996-9941 for a free 10-minute telephone consultation.

How do I stop creditors from calling my number?  A collection agency called me at home this morning at 7:36 am.  Are there no restrictions when they can make collection calls? 

Answer

The specific hours when a collection agency can legally call you will vary depending upon what province you live in.  Each province and territory in Canada has a law that sets out specific restrictions on the conduct of collection agencies.  As a general rule, these laws only apply to collection agencies.  They do not appy to collectors employed by your creditor.  In addition. provincial law regulating the conduct of collection agencies does not usually apply to law firms in Canada, a few of which operate like a traditional collection agency.

The first four chapters of my book titled A How-to Guide for Dealing with Collection Agencies in Canada (available on this website) sets out in significant detail how to stop, avoid or discourage collection calls.  You might want to consider obtaining a copy of this book. 

In the alternative, you may want to call me toll free at 1 (866) 996-9941 for a free 10-minute consultation to discuss your situation.  If you live in Ontario, Alberta, British Columbia, or Nova Scotia and you are receiving collection calls you may want to retain my firm, for a modest fee, to send a ‘cease and desist’ letter to a collection agency on your behalf.  Once a collection agency receives a ‘cease and desist’ letter from my law firm it is then illegal for the collection agency to telephone you–the collection agency is limited to communicating directly with my office.

I live in Mississauga, Ontario.  I obtained some student loans in the mid to late 1990s.  I am struggling to get by and I have these large student loans.  I now find that I am getting collection calls on both my outstanding Canada Student Loan and on my OSAP loan.  I don’t know if I will ever be able to pay these student loans. To make matters worse, I have had problems obtaining work in the field in which I studied.  Is there anything you can suggest?

Answer

Depending upon your situation you may be able to save thousands of dollars in connection with your oustanding student loans.  A number of my former clients were large collection agencies collecting student loans.  I suggest you call me toll free at 1 (866) 996-9941 and we can talk about how you might be able to save thousands of dollars on your delinquent student loans.

I received today a letter from a collection agency threatening to commence full legal action unless I pay them $1,700 due to them.

This is not a legitimate debt.  This alleged debt arose out of a misunderstanding over an apartment in Toronto which I thought had been resolved.

From the letter it appears that the collection agency has reported this debt to a credit reporting agency and is prepared to sue me in Ontario Small Claims Court.

What do you think I should do?  My wife is sick (cancer) and is staying home.  The last thing I need, given her condition, is to have collection calls being made to my home.  Thank you very much.

Answer

Your e-mail, which had to be condensed due to its length, raises numerous issues, too many to deal with on this blog.  I suggest you call my office toll free at 1 (866) 996-9941 for a free 10-minute telephone consultation.

I live in Ontario. Recently I received a letter from a lawyer demanding payment of an outstanding credit card debt. This lawyer`s letter contained an enclosure, a 2-page Plaintiff’s Claim, that looks like a court form issued by the Ontario Small Claims Court, with the word `DRAFT` printed on it.

Have I been sued?  Is it legal for a lawyer to send this type of document to me?

Answer

You have probably received what is known in the collection industry as a “draft statement of claim”, a document which is only a draft of a claim and, in fact, is not an actual legal document commencing a lawsuit.  A draft statement of claim is an incredibly effective written notice used to intimidate unsophisticated consumers to pay an account. 

You should be able to recognize a document as a ”draft statement of claim” by the fact that (1) the document does not contain a court file number issued by the Small Claims Court, (2) the document is not signed by a court official,  and (3) the word ‘DRAFT’ is prominently displayed on the document.

Brian Pitkin, the Ontario Registrar of Collection Agencies, wrote a letter dated October 27, 2008, to Ontario collection agencies advising them that the practice of lawyers sending “draft statement of claims” to consumers at the request of collection agencies or creditors would no longer be tolerated.  Therefore, it would appear that it may be illegal in Ontario today for a lawyer to send a “draft statement” to a consumer. 

If you suspect that you have received a “draft statement of claim” I would suggest that you call our office toll free at 1 (866) 996-9941 and we can discuss the correspondence you have received.