Calls at ungodly hours, harassment, intimidation, threats... this is what comes to mind for many when it comes to the practices of collection agencies. Are there any collection agencies out there today that still do this? The interviews we conducted with 23 consumers "in collections", as well as with people who come into contact with them in the course of their work, show that the answer is yes. Of the 20 consumers who had received collection calls, nearly half said that, over a period of time, they had been called more than once a week, and five said they had been called several times a day.
Of all those interviewed, 14 mentioned that the company or agency that had contacted them had had an incorrect attitude (in particular, the agent who had spoken to them had been harsh, aggressive or impolite). Finally, 20 consumers mentioned that the experience had caused them a great deal of stress. The interviews we conducted with both consumers and specialists also enabled us to identify the impasse in which people find themselves when dealing with a collection agency.
Trapped, consumers (often low-income) are emotional, stressed, even depressed. The arrival of a collection agency in their lives is just another unfortunate event. It's then that they're asked, sometimes loudly, to pay an amount they don't have the capacity to pay. How can things be improved?
In search of answers, we looked at the laws of three Canadian provinces, as well as the harmonized list of prohibited practices that the provinces have committed to respecting. We found that, while some rules need to be modified to reflect today's reality, laws and regulations generally offer consumers good protection. But their application sometimes leaves something to be desired. We also took a close look at American law. We found that it is more detailed than the three Quebec laws we studied, particularly when it comes to describing acts of harassment, false and misleading representations and unfair practices.
In our opinion, this law could serve as a model for improving provincial laws or helping to interpret them. It would be good if collectors followed the law to the letter. It would be even better if they followed the rules they themselves had established. To find out what rules of conduct they have dictated to themselves, we took a close look at four codes of ethics from Quebec, Ontario, the United States and Belgium. We found that, in Quebec, the organization representing collection agencies has adopted a code that is ill-suited to the situation of its members.
In addition, the other three codes could serve as a model for organizations that group together collection agencies. These rules sometimes go beyond the simple rule of conduct. In the Belgian code, for example, it is stated that "a positive solution must be found, taking into account any socio-economic problems the debtor may have." Now that's inspiring! Do companies wishing to recover the sums owed to them have other solutions than opting for traditional collection? Hydro-Québec's experience shows that they do. Over the past few years, the utility has set up a program for low-income customers who are having difficulty repaying their debts. Under this program, Hydro-Québec's collection department makes special arrangements with certain consumers.
In some cases, they even agree to reduce or even cancel the debt. Interestingly, these agreements don't cost the crown corporation a penny more than traditional debt collection. And they help to boost customer satisfaction and improve the company's image. Could all companies do the same?
Gaz Métro's experience, which we also report on, may lead us to believe that this is not the case. With the aim of making the practices of its collections department more humane, the company set up a pilot project with disastrous results. At the very least, it highlighted certain dangers. And it has shown us that, to succeed in such an experiment, you need to have certain precise elements in hand.
Drawing on the experience of these two companies, we have drawn up a list of the elements that contribute to the success of such projects. These include well-trained employees who are sensitive to the needs of low-income people, participants who are aware of and interested in the process, and the presence of a consumer association acting as an intermediary.
The comments made by some of our stakeholders made us realize that it will take more than programs to put an end to abusive consumer practices. Some solutions were mentioned, such as direct assistance to low-income consumers, and measures to tackle the causes of poverty. At the time of writing, a number of organizations have begun lobbying in this direction. Let's hope they bear fruit.
