Consumer Protection BC (CPBC) has fined Toledo Credit, a Surrey-based debt collector, $34,000 after finding the company harassed and misled six customers while attempting to collect debts.
According to CPBC, Toledo sent borrowers messages invoking threats of criminal and financial ruin, including warnings that files would be presented to the RCMP, the Canada Revenue Agency and provincial crime units, and language describing “financial annihilation” as imminent unless payment was made. The regulator said Toledo also used phrases such as “financial exile” and “reputational destruction” in communications meant to pressure a borrower into paying.
CPBC said the decision maker in the case concluded that Toledo’s communications were calculated to create fear of criminal, financial, professional and reputational consequences that went well beyond ordinary debt collection practices.
Licensing and Compliance Rules
CPBC noted that because Toledo collects debts owed directly to itself, it is not required to hold a collection agency licence. However, the regulator said the company is still bound by British Columbia’s collection laws regardless of its licensing status.
In addition to the $34,000 administrative penalty, Toledo Credit has been ordered to reimburse CPBC $3,000 for inspection costs and must change its collection practices going forward.
Toledo has also received an “F” rating from the Better Business Bureau and is the subject of two BBB alerts, according to the report.
Regulator’s Message to Collectors
Louise Hartland, director of public relations for CPBC, said collectors are permitted to ask people to repay debts but cannot harass them or use false or misleading information to pressure payment.
Hartland said the decision sends a message to anyone collecting debts in B.C. that communications must be accurate, lawful and responsible, and that businesses need to consider the content, tone, frequency and overall effect of their messages.
CPBC said debt collectors are permitted to contact people about money owed, but it advises anyone who feels harassed to keep copies of texts, emails, voicemails and account records. The regulator also said people can request that collectors contact them only in writing, and can use CPBC’s online tools to dispute a debt or stop collection calls.
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