It’s no secret that collection agencies and credit card companies use scare tactics to collect on unpaid bills. Threatening a consumer with the loss of their home, legal arrest and personal harm have been used to bully out payments. The federal government have since mandated the cease of such practices by all collection agencies (the usual culprits), but it is difficult to stop it entirely.
A Burnaby electrician, S. Badyal, can attest to this, as he recently said to the Canadian Broadcast Company (CBC) a Canadian credit card company used a scare tactic to collect on a MasterCard debt in the amount of $6,900. The company took him to B.C. Supreme Court to collect. However, Badyal had proof he was the victim of fraud and the balance owing was the result of 91 suspicious overseas transactions with an online gaming company.
“They figure the little man will get scared to go to Supreme Court, and I didn’t even flinch. I said, ‘You wanna go to court, let’s go to court,'” says Badyal.
In the process, Badyal’s credit was revoked and all contracts were lost. His credit rating cost him several contracts because lenders revoked his credit.
He says many of the fraudulent transactions occurred while he was at work on a construction site and did not come from his IP address, but ATB Financial did not believe him, causing three years of stress and aggravation.
Badyal fought the lawsuit with the help of a non-profit agency providing free legal services. In court documents, he claimed the bank’s lawsuit against him was an “abuse of process,” because small claims court usually has jurisdiction over matters under $25,000.
also argued the bank was unfair to him by filing the lawsuit, then delaying the case for many months while he was being charged 19.9 per cent interest on the outstanding balance.
A B.C. Supreme Court judge threw out the case and ordered the credit card company to pay Badyal $598.04.
“I stuck to my guns, I didn’t give in,” says Badyal, encouraging others not to be intimidated by legal action.
The bank has since removed the negative rating on Badyal’s credit report and is reviewing the case.
In many cases, consumers feel intimidated by the big banks and credit card companies when approached with collection. The loss of a home or job security can mean disaster for most.
OCCA advice:
The most important thing a consumer can do is to respond to all collection notices. Do not ignore them. Even if the debt amount being charged does not seem correct according to your personal finance record, you absolutely need to address and respond with action. Legal judgement is the next step and your absence from the court room can lead to the judgement against you being passed. If you are unsure about a debt you are charged with, consult your most recent credit report. That is proof of your transactions. Consult your bank and if needed a debt relief professional for assistance in repaying a debt.
For your free financial consultation about how to get out of debt, go to www.occa.ca. Scare tactics won’t work on us.
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