Q.    After Brian Pitkin wrote a letter dated October 27, 2008, warning Ontario collection agencies not to hire lawyers to send out draft statements of claim collection letters, when exactly did he decide it was unacceptable for Global Credit & Collection Inc. to hire Natale Law Offices to send draft statements of claim to Ontario residents?

A.    Let’s review the facts.  Brian Pitkin, the Ontario Registrar of Collection Agencies, the senior civil servant in Ontario responsible for regulating collection agencies, wrote a letter dated October 27, 2008, http://www.collection-calls.ca/Copy%20of%20Pitkin20091027.pdf  warning collection agencies operating in Ontario not to hire lawyers to send out a collection letter containing an imitation of a court document–a practice commonly referred to as a draft statement of claim.  In this letter Brian Pitkin referred to this practice as “both deceitful and misleading” and he warned collection agencies not to employ this collection tactic.

Less than a month later, on November 13, 2008, Brian Pitkin met with collection lawyer Deanna Natale, and one or more representatives from Global Credit & Collection Inc., one of the ten largest collection agencies in Canada, at which time Brian Pitkin’s recent warning letter regarding the use of draft statements of claim was discussed.

A few days after this meeting, Manny Zeligman, Global’s Chief Compliance Officer, wrote a letter dated November 17, 2008, to Brian Pitkin outlining the procedure followed by Global to hire a lawyer to do collection work, and to send out collection letters, including draft statements of claim.  20081117zeligmanlettertopitkin

About three weeks later, on December 9, 2008, Brian Pitkin sent a brief e-mail to Manny Zeligman stating “Manny,  Further to our meeting, I am satisfied that the process used by Global with respect to the employment of lawyers respecting collections and legal letters does not offend the provisions of the Ontario Collection Agencies Act.”  20081209pitkinemailzeligman

Fast forward two years, to October 31, 2010, and CBC News breaks the story on national television that collection lawyer Deanna Natale is facing a disciplinary hearing in mid-November in connection with her law firm’s use of draft statements of claim.  In an issue of Canadian Business magazine that hit newsstands in December of 2010 Brian Pitkin advised writer Joe Castaldo that he was not seeking any penalites against Global in connection with its conduct related to the use of draft statements of claim.  Furthermore, Brian Pitkin has stated that he met with Global on November 12, 2010, at which time he received its assurances that Global would no longer hire a lawyer to send out a draft statement of claim.

I had written a letter dated September 29, 2009, to Brian Pitkin complaining about Global’s practice of hiring Natale Law Offices to send out draft statements of claim on behalf of the clients of Global.  Brian Pitkin responded to my complaint some 14 months later, in a letter dated Saturday, December 4, 2010–four weeks after the CBC News story about Deanna Natale’s disciplinary hearing. The second paragraph in Mr. Pitkin’s letter to me reads as follows:

“I appreciate you bringing to my attention the practices of Global in apparent disregard of my direction of October 2008 to collection agencies.  I have addressed this matter directly with Global at a meeting on Friday, November 12, 2010 and received its undertaking that the inclusion of such documents or references thereto from either the agency or its solicitors would cease immediately.”

Amanda Worley, Discipline Counsel representing The Law Society at the Deanna Natale disciplinary matter, spoke to Brian Pitkin following his comments appearing in Canadian Business magazine.  According to Ms. Worley’s account of her telephone conversation with Mr. Pitkin, contained in her letter dated December 14, 2010, to William Trudell, Ms. Natale’s lawyer, this was Mr. Pitkin’s account of what transpired at this meeting in 2008 with Deanna Natale and senior representatives from Global:

“Ms. Natale agreed that she would no longer send out draft statements of claim on behalf of Global and that if she engaged in this practice, she would do so only on behalf of the creditor having first formed a solicitor-client relationship with that creditor.  In Mr. Pitkin’s view, Ms. Natale clearly understood what was expected of her.”

One can only ask when exactly did Brian Pitkin decide it was unacceptable for Global to hire Natale Law Offices to send draft statements of claim to Ontario residents?

You can read more about draft statements of claim and Deanna Natale’s disciplinary matter on this website at http://www.collection-calls.ca/natale-timeline.html and http://www.collection-calls.ca/natale-homepage.html

I address the role of provincial bodies responsible for regulating the conduct of bill collectors in a book I am currently researching, tentatively titled, Draft Statement of Claim-Gate:  The Scandal That Rocked The Canadian Collection Industry.

Q.  In 2010 I received a collection letter from Natale Law Offices and it contained some kind of letter demanding payment of a debt and a form that looked like a court document.  I’m not a lawyer.  I’m not a reporter.  Can I come and watch the proceedings at The Law Society on September 12th concerning Deanna Natale and her disciplinary matter?

A.   Yes.  Disciplinary matters at The Law Society are open to the public and anyone can attend.  To the best of my knowledge, the Deanna Natale disciplinary matter will be dealt with at The Law Society this coming Monday, September 12th at 9:30 a.m.  I suggest you phone The Tribunals Office at (416) 947-5269 at The Law Society on the afternoon of Friday, September 9th to confirm the start time for Ms. Natale’s disciplinary matter.

There may be a significant number of people who are curious about what is going to happen at Ms. Natale’s disciplinary matter so you may want to show up a few minutes early at reception at The Law Society at 130 Queen Street West (eastern entrance of Osgoode Hall) to improve your chances of getting a good seat.

Q.  I have been trying to speak to lawyer Deanna Natale about a collection letter I received from her in February of this year.  What telephone number would I call her at to speak with her or her staff?

A.  You should be able to find a lawyer’s contact information on The Law Society of Upper Canada’s website, www.lsuc.on.ca, on the Lawyer and Paralegal Directory.  Today when I visited this directory I obtained the following contact information for lawyer Deanna Natale.

1490 Denison Street, Suite 100

Markham, ON  L3R 9T7

Tel.: (905) 413-8748

According to an Ontario Government website that lists registered offices for companies holding an Ontario collection agency license, 1490 Denison Street is also the registered address for one of Canada’s largest collection agencies, Global Credit & Collection Inc.

Today when I dialed the phone number listed for Deanna Natale on The Law Society’s Lawyer and Paralegal Directory I got the following voicemail greeting:

Hi.  You have reached Deanna Natale.  I’m unable to take your call at the moment.  If this is an urgent matter, please call my assistant Andrea Anderson at (905) 413-8633.  Otherwise leave me a message at the tone and I will get back to you as soon as possible.  Thank you. 

Click here to listen the audio:  natlale-vm-june-2-20113

I spoke with a person who knows of Andrea Anderson and I was informed that she has not worked at Natale Law Offices for over seven months.  It would appear that Ms. Natale’s voicemail is informing callers to speak to an assistant who may not have worked for her for several months.

Today I also tried calling Ms. Natale’s assistant, Andrea Anderson at (905) 413-8633, the number provided in Ms. Natale’s voicemail greeting.  This is the voicemail greeting I heard when I called the number mentioned in Ms. Natale’s voicemail greeting:

You have reached The Waldman Law Office.  No one is available to take your call at the moment.  Kindly leave your name, phone number, and a brief message, and someone will return your call shortly.  Thank you.     

The person for whom you wish to leave a message does not have enough available space in his or her mailbox.  We are unable to take your message at this time.

Click here to listen to the audio:  vm-natale-assistant-june-2-20111

Q.   I heard that Global Credit & Collection Inc. has laid off 400 employees from its Markham, Ontario, call centre.  Have you heard anything about this?

A.   I have received several phone calls from very reliable sources advising me that today Global Credit & Collection Inc. laid off hundreds of staff, perhaps as many as 400 full-time employees.  According to these sources the reason for the layoffs is the loss of Capital One in the U.S. as a client.  When I spoke with a senior executive at Global today he refused to comment about any layoffs at the company.

Q.  Is it true is that the Ontario Government recently changed the law to make it easier for lawyers to send draft statement of claims to Ontario residents?  In the future are Ontario consumers going to see more draft statement of claims from lawyers sent on behalf of collection agencies?

Susan in Orillia

A.  It would appear that the answer is yes.  On March 30th, 2011, the Ontario Good Government Act, 2011, received Royal Assent.  Section 3 of Schedule 2 of the Good Government Act, 2011, repealed the Ontario Debt Collectors Act.

The Ontario Debt Collectors Act, prior to its repeal, would appear to have prohibited lawyers from sending draft statement of claims to Ontario residents on behalf of collection agencies.  Now the McGuinty Government at Queen’s Park has repealed the Ontario Debt Collectors Act.  It would now seem that lawyers will be able to send draft statement of claims to Ontario residents provided they do not contravene the Rules of Professional Conduct governing their conduct. 

Given the considerable negative publicity that draft statement of claims have generated over the past six months in the media it seems odd that the McGuinty Government would make the decision now to repeal the Ontario Debt Collectors Act and make it easier for lawyers to send draft statement of claims to Ontario residents on behalf of collection agencies.  A cynical person might come to the conclusion that the purpose of the repeal of the Ontario Debt Collectors Act is a move by the McGuinty Liberals designed to help a Liberal in hot water, collection lawyer Deanna Natale, daughter of Liberal MP Judy Sgro, who is facing a disciplinary hearing before The Law Society of Upper Canada in connection with her law firm’s high-volume debt collection practice and her firm’s use of draft statement of claims. 

The Law Society of Upper Canada is expected to set a date for Ms. Natale’s disciplinary hearing on Thursday, April 21, 2011.  You can learn more about draft statement of claims and Ms. Natale’s disciplinary matter at the following link:  http://www.collection-calls.ca/natale-homepage.html

Q.    I live in Kitchener, Ontario.  In January of 2009 I wanted to resolve a number of outstanding accounts that had been placed with collection agencies.  I went to see a mortgage broker and someone in their office referred me to a debt settlement firm.  I provided this firm with almost $30,000.  These monies were to be used (1) to pay the firm’s fees and (2) to make one-time lump sum settlements to my creditors.  I have tried contacting this firm for the past two months by both phone and by e-mail.  The company’s voicemail is full and my e-mail messages to the company have gone unanswered for the past two months.  Do you have any advice?

A.  Debt settlement is one of a number of options that consumers can take advantage of to deal with their debt situation.  Some consumers may want to do debt settlement on their own and avoid the expense of paying a firm to do the work for them.  Do-It-Yourselfers may want to consider purchasing a copy of my book The Wolf At The Door:  What To Do When Collection Agencies Come Calling (2010), published by McClelland & Stewart, which explains how a consumer can do debt settlement on their own.  

It is very important that anyone who wishes to hire a firm to provide debt settlement services do their homework.  You certainly don’t want to find yourself in a situation where the company you hire to perform debt settlement services has run off with your money or you have paid huge up-front fees and then you end up dropping out because you have been sued for a large sum of money or you cannot afford to make monthly contributions.

There are three things you should consider when choosing a firm to provide debt settlement services (1) are they licensed to provide debt settlement services?, (2) are they a reputable firm, and (3) what services are you receiving and are the fees reasonable given the inherent risks involved with debt settlement?

(1)    Is the firm licensed to provide debt settlement services?

In Canada a firm offering debt settlement services to the public needs to satisfy licensing requirements to offer debt settlement services.  As a general rule, this means that the firm offering debt settlement services in your province must hold a collection agency license issued by your provincial government. 

My law firm offers debt settlement services, but since lawyers are exempt from being licensed by the same statute as collection agencies, it is not necessary for my law firm to hold a collection agency license.  This makes sense because a lawyer’s conduct is already regulated by provincial law societies and there are all kinds of rules regulating monies held in trust in lawyers’ trust accounts on behalf of a lawyer’s clients.

(2)   Is the firm offering debt settlement services a reputable firm?

The fact that a firm offering debt settlement services satisfies licensing requirements is no guarantee that it is going to provide you with value for your money.  You should satisfy yourself that the firm is reputable.  Who are the principals of the firm?  What is their background?  Are the principals of the firm consulted by the media on consumer debt issues?  How long has the firm been in business?  Does the firm have a website and how extensive is it? 

(3)    What services are you receiving and are the fees reasonable?

What services is the firm going to be providing to you?  Can it help stop collection calls?  Can it assist you in any way in the event that you are sued by a creditor?

Hiring a firm to provide debt settlement services typically involves risks.  If you are in default on an outstanding account and you are not making any payments to a creditor while you wait for the appropriate time to negotiate a favourable lump sum settlement there is a chance that you might be sued for the entire balance, plus court costs, and pre and post-judgment interest.

You should avoid hiring a firm offering debt settlement services in circumstances where the firm is earning large fees over the first several months–the time when the firm is actually doing the least amount of work.  For example, you should avoid hiring a firm offering debt settlement services where they are charging up front fees equal to 20% or 25% of the total debt you want to eliminate.  If you drop out in the first six to 18 months because you have been sued by one or more creditors then the firm providing debt settlement services may have earned huge fees at a time when it it provided little, if anything of value, to you.

If you have had an experience with a debt settlement firm that you would like to share on our website I would invite you to contact our firm at 1 (866) 996-9941.

A third option for debt settlement

This blog has discussed (1) hiring a firm to perform debt settlement services on your behalf, and (2) being a Do-It-Yourselfer.  However, there is a third option which is being a Do-It-Yourselfer but hiring an expert to provide you with expert debt settlement advice as and when required.  This option should be significantly less expensive than hiring a debt settlement firm to negotiate settlements on your behalf.

You are welcome to call Mark Silverthorn toll free at 1 (866) 996-9941 for a free initial 10-minute  telephone consultation and learn more about how you might be able to hire our firm to provide telephone advice, on an ”as needed basis” as you settle your debts.

Q.    I live in Toronto.  I have an outstanding account with the Royal Bank.  Last week I was served with a Statement of Claim, issued in Hamilton Superior Court, by the law firm of Gowling, Lafluer Henderson, LLP, with offices in Hamilton, Ontario, for approximately $18,000.  Firstly, why was I sued in Hamilton, and not in Toronto where I live?  Secondly, why was I sued in Hamilton Superior Court, and not in Small Claims Court?

A.   In 2009, amid much fanfare, the Ontario Government announced that it was increasing the monetary jurisdiction of the Ontario Small Claims Court from $10,000 to $25,000, effective January 1, 2010.  Accordingly, starting January 1, 2010, creditors could sue debtors in Ontario Small Claims Court for unpaid accounts where the principle owing was less than $25,000.  It is in the public interest for lawsuits involving unpaid accounts on balances with outstanding principle less than $25,000 to be heard in Ontario Small Claims Court where lawsuits can be dealt with more quickly and inexpensively than in Ontario Superior Court.

Unfortunately, some creditors and some law firms have decided that for strategic reasons they want to sue debtors, in circumstances where the principle owing is less than $25,000, in Ontario Superior Court, and not in Small Claims Court.  It is my belief that these creditors and the law firms they employ are suing these unpaid accounts in Superior Court, an not in Ontario Small Claims Court, because they believe that more than 90% of these lawsuits will result in quick default Judgments.  However, this practice, arguably, is not in the public interest and it involves a denial of access to justice for those debtors who (1) are sued in Ontario Superior Court, and not in Ontario Small Claims Court, often in courts that may be hundreds of miles from where they live.

If these consumers were sued in Ontario Small Claims Court all they would need to do is to go online and get a Defence form off an Ontario Governemnt website, complete the document, print three copies, and arrange to file the Defence in Small Claims Court, where they would pay a $40 court filing fee to file their Defence.  In contrast, if a consumer wanted to defend a lawsuit commenced by a creditor in Ontario Superior Court the consumer faces a much more daunting and expensive procedure.

Q.   I live in Sudbury.  I have an outstanding credit card account on which I owe about $13,000.  I was recently sued by a Toronto lawyer is Toronto Superior Court.  Why was I sued (1) in Toronto, when I live in Sudbury, and  (2) why was I sued in the Ontario Superior Court of Justice, and not in Ontario Small Claims Court?

A.  It would appear that some of the largest lenders in Canada have been hiring one or more law firms in Toronto to sue consumers living across Ontario In Ontario Superior Court in Toronto despite the fact that (1) many of these consumers live outside of Toronto and (2) the principle amount owing is less than $25,000.  On January 1, 2010, the monetary jurisdiction of Ontario Small Claims Courts was increased from $10,000 to $25,000.  The Ontario Attorney General hailed this increase in the monetary jurisdiction of the Ontario Small Claims Court as a positive step for access to justice for Ontarians. 

I believe that the majority of Ontarians would find the practice of suing consumers on unpaid accounts, where the principle owing is less than $25,000, in Toronto Superior Court, “not to be fair play” and “not in the public interest”.  I intend to make this an issue in the coming months.

If you are not represented by a lawyer or an agent, and you have been sued in Ontario Superior Court in circumstances where the principle amount claimed is less than $25,000, I would invite you to call me toll free at 1 (866) 996-9941 for an initial free 10-minute telephone consultation.

Q.     I read somewhere on your website that collection lawyer Deanna Natale was going to stop doing collection work sometime early in 2011.  That is certanly news to me.  I have seen a collection letter from Natale Law Offices dated February 23, 2011, addressed to a Toronto resident that was sent on behalf of Chrysler Financial.  20110223nlochryslerfinancial1  What gives?

Ross in Toronto

A.   On January 5, 2011, Mark Lapowich, one of Ms. Natale’s many lawyers, appeared before the Proceedings Management Conference (PMC) at The Law Society of Upper Canada, at which time he advised The Law Society that Ms. Natale was in the process of “winding up” her collections practice.  Here is an excerpt from the transcript of what took place at the PMC meeting on January 5, 2011:

          PMC CHAIR:   … it appears that Ms. Natale is winding down the collection practice that we’ve heard described?

          MR. SANDLER:    Yes.  that’s correct ….  Ms. Natale is essentially winding that up in the early new year.  We anticipate that she will no longer be practising in this area at the end of February, but perhaps even sooner.

You can read the entire transcript from the Proceedings Management Conference (PMC) held on January 5, 2011, on this website at the following link:  http://www.collection-calls.ca/transcript-of-PMC.html 

If, in fact, Ms. Natale is winding up her collections practice at the end of February of 2011 it seems odd that her firm is sending out collection letters on behalf of creditors as late as February 23, 2011. 

If anyone has received a collection letter from Natale Law Offices after February 1st of 2011 I would invite them to call me toll free at 1 (866) 996-9941.  To learn more about Deanna Natale’s disciplinary matter before The Law Society you are welcome to visit http://www.collection-calls.ca/natale-homepage.html