Companies getting tough on collecting overdue bills

May 29 2010 by Ellen Roseman

Many people have asked me about Bell Canada’s new late payment fee — 3 per cent a month or 42.58 per cent a year compounded.

As Bell says here, the regulated part of your bill is subject to a much lower fee of 1.25 per cent a month or 16.07 per cent a year.

I guess the CRTC, which regulates an increasingly smaller share of Bell services, would never allow a 3 per cent monthly fee.

In September 2008, Bell lost a class action lawsuit initiated by Ottawa customer Peter DeWolf, challenging its imposition of a $25 monthly fee on overdue satellite TV accounts. The Ontario Court of Appeal supported Bell a year later, saying the $25 administrative fee was a legitimate charge.

Now Bell is trying another way to make customers pay more when they’re late. But what bothers me is Bell’s high error rate. How many people refuse to pay some or all of their bills because the charges are just plain wrong?

Rogers also makes errors, as you can see from Dawn’s story below. Her life was turned upside down by fighting off a collection agency hired by Rogers to collect bills she didn’t actually owe.

Fitness clubs use collection agencies to bludgeon you into paying overdue bills. Door-to-door energy sellers do it as well. They know you don’t want to get a black mark on your credit rating.

Many people will pay charges they don’t think are legitimate just to get rid of the bill collectors.

There’s a fundamental inequality here. Consumers have to fight back against billing errors with their own time and money, as interest charges add up and collection agencies are called in. They sacrifice a lot to keep going.

Meanwhile, companies can enforce their payment threats through legal means — and write off their costs.

Sure, some people don’t pay their bills routinely and raise costs for others. But my concern is for those who have real grievances and can’t see them through to the end because of usurious interest charges and heavy-handed collection efforts.

18 comments

  1. Dawn

    May 29 2010

    I came across Ellen’s article about Delores Brown, who had a problem renewing her mortgage. Then she found out there was a bad debt placed on her credit bureau report that wasn’t even hers.

    I had the exact same concern recently. I had to battle with belligerent call centre staff at Iqor Canada, the collection agency holding this account, as well as deal with Rogers call centre staff to rectify this mistake.

    It took me 3 months to correct this issue — and the damage that was done to my credit in the meantime was horrendous.

    No one could explain to me why this black mark had been placed on my credit report. I explained that my current services with Rogers were still in use and paid up to date.

    Everybody wanted to point the finger and lay blame on everyone else. Each time I tried to explain to them that I really did not care who was at fault. It didn’t matter to me. I just want it fixed.

    I was told by a staff member at Iqor Canada that I am “just a debtor.” Another call centre agent at Iqor told me “if you cannot afford your bills, you should apply for welfare.”

    I am a single mother, yes, but also working full time and handling my bills just fine. So to be categorized by this person as if all single mothers are on social assistance was insulting and unnecessary.

    I was not given any assistance from anyone at any of the companies involved. I had to do all the footwork and investigation myself to find where the mistake was.

    I had to contact Rogers’ fraud department several times to have this situation rectified. On two separate occasions, I was told this error would be corrected and removed from my bureau within 48 hours.

    I signed up online with credit watch, paid $25 to find out nothing had been done and this mark was still on my bureau.

    After several phone calls to Rogers, Iqor, Equifax and Transunion, this mistake has finally been rectified and my credit score is starting to increase.

    But that does not change the fact that I was unable to refinance my home to make the mortgage payments a little easier to deal with. And due to this horrible mistake, I have to wait for my credit score to increase before I will qualify for a mortgage at a lower interest rate.

    The bottom line here is that, in my opinion, Rogers does not care at all about their customers or keeping them as customers.

    I have recently switched my home phone services to another company because of this situation, as well as the horrible customer service received from Rogers, and now I have to change my cellular service as well.

    I was never offered any kind of compensation for the stress and anxiety this has caused me.

    I was never offered any compensation for the horrible service provided by Rogers for the account in my name that was costing me approximately $500 per month (home phone and cellular services).

    I have now received a bill for April-May 2010 for services with Rogers that were not being used, because someone on their end did not put in the cancellation correctly.

    I notified Rogers at the beginning of March and received an automated message from Rogers on April 6th that I needed to return the equipment within 1 week to avoid being billed for this equipment.

    I returned all equipment to Rogers April 12th and have not had any services hooked up in my home since April 5th, when my current company hooked up services.

    I have spent the last hour on the phone trying to find someone to help me and again have not received any customer service at all, no offer to correct the bill or the account.

    I was billed not only for services that were not used, but for equipment that was returned.

    While I was in the Rogers location to return the equipment, the gentleman at the counter explained to me that only some services were cancelled and he could not take a return of equipment for an account that was still active. So I had to call Rogers while I was standing in one of their locations.

    I asked a lady why it was not disconnected. She said she was unsure and she backdated it to the correct date.

    I am not sure how certain services were cancelled and some active, some back dated and some not, for services that were all on one bill.

    I feel I’m not the only one who has had this issue. I would appreciate the opportunity to have my story published.

    Maybe then Rogers will give me the compensation that I deserve, especially since I am still a Rogers customer through their cellular services that will cost me $400 to cancel.

  2. Caelan

    May 29 2010

    Dawn, your story makes my blood boil.

    Rogers is responsible for the damage control. Period.

    Rogers must write registered letters to the credit bureaus, the collection agency, and give certified copies to Dawn to give to the mortgage company. They must follow up and not assume the credit bureaus will correct Dawn’s reports in a timely manner. They should ensure that everything is done to reinstate her credit rating to the way it was before they botched it up. Rogers should reimburse Dawn for the $25 she shelled to Credit Watch. Finally, they should cut her a big fat cheque – compensation for all the grief she’s endured.

  3. Dean Marush

    May 29 2010

    I wish things were that simple. Evil companies and poor offended customers.

    I used to work for a telecom company (not Rogers). Billing mistakes do happen. On another hand, there are some people who just do not want to pay and think that going to mass media will help them off the hook.

    More often, people just do not read the details of their service contract (e.g. that you need to call in to cancel particular services or that there is a disconnection fee). Nobody complains about sign-up bonuses received, but get outraged when they are charged for the things that are in the contract but they have not bothered to read about.

    Get real. Read the contract and if you do not like what is there – do not sign up.

    The story above might well be true. The point is that there is no story from the other side….

  4. Curmudgeon

    May 30 2010

    Dean is right. I believe there is more to this story.

    Recently, I had billing errors with Rogers that were so complicated, I hardly knew where to start. “Paula” listened patiently, and after putting me on hold for a few minutes, told me that she needed more time and would call me back. To my surprise, she called back within the time she set and corrected the problems to my satisfaction.

    Granted, the errors should not have occurred in the first place, but the service in getting a correction was excellent.

    Mistakes happen, but I find that reading blogs like yours can give a distorted view of many companies.

  5. Lior

    May 30 2010

    Ellen: a while ago when George Cope took the reins at Bell, the Globe and Mail did a lengthy piece about him. It mentioned that when Cope took over, there were certain divisions at Bell that consumed significant operating expenses and that he attributed, among other factors, to customers (not just individuals, but even corporations) who were constantly paying late, or in some cases never at all.

    This increase in the late payment fee is just one of the measures being used to crack down on those who pay late. The inherent problem with Bell is the “bill now, fix mistakes later” mantra, especially when it charges for services such as satellite TV *ahead* of the billing period, in contrast to Rogers who charge in arrears.

    Bell also has a payment system where a credit can take up to 3 months (!) to appear, a brutal system that I was quite unfortunate to experience on several occasions.

    There’s no doubt that many people would be inconvenienced by expensive fees when Bell makes a mistake. For the average individual, there simply is no way to reverse the charges while dealing with the inept Punjabi call centre.

    Interestingly enough, one of the other factors that Cope cited for the high operating costs was the executive staff. Apparently, there were so many executives at Bell who were unhappy in their roles that this led to dismal results across the board.

    See if you can Google the article, it’s quite a read.

  6. SHP

    May 31 2010

    I agree that Bell should be able to collect a late fee/interest on customers paying late or not paying at all — but not unless they first improve the resolution of billing problems and give interest as well when THEY are wrong!

    I was once billed TWICE the amount of my phone bill – and it was over $250, because it included installation/activation of a new phone line.

    As I was having my bill taken directly from my chequing account, Bell got the money twice. The best I could ever obtain was to have the amount credited to my account. No apologies, just a “well, it happen sometimes”!

    With only a basic phone line, it took me 10 months to use the credit, and I did not get a cent of interest on this money.

    Since then, I’ve decided I would always look at the bill before paying. But with what I’ve read in this blog, it looks like an average customer has no choice but to pay, even if Bell is wrong, or the damages could be much bigger than just the wrong amount on a bill…

  7. Lior

    May 31 2010

    Maybe the customer who’s entitled to a credit or refund should charge Bell a “late payment” fee (60% APR or 5% per month, the maximum allowed by law). Perhaps that would bring upon discipline in making timely refunds and credits. I think it’s only fair.

    If you owe Bell money past a certain point in time, they charge you 43% APR interest. However, if Bell owes you money, shouldn’t they pay a late fee as well if the refund or credit isn’t applied in a timely manner?

    The 6 to 8 weeks I was told to wait for a credit isn’t exactly timely. After all, the 407 ETR highway is subject to this rule, so why isn’t Bell?

  8. SC

    Jun 3 2010

    Many customers pay Bell late in order to manage their cash flow. In other words, these customers are using Bell’s cash flow as a convenient source to augment their own cash flow. For these customers, raising the LPC to 3% per month will put an end to this practice…i.e. customers will now pay Bell first before their other bills.

    Customers who are just forgetful and become late will usually pay as soon as they get the reminder…just a dollar on a typical $100 bill.

    At the end of the day, Bell is not a bank, and lending money is not their core competence, and late payment incurs major expenses for the organization.

  9. Lior

    Jun 3 2010

    SC: The problem here is not so much the late payment fee itself (even though it is quite exorbitant) but as Ellen mentioned Bell’s erroneous billing which takes forever to fix mistakes and issue credits while charging penalties for charges that are in dispute.

    Unless the Executive office is involved, don’t bother relying on Bell’s call center staff, many of whom are not even on this continent and can’t speak coherent English, to rectify anything.

    Given that it takes Bell as much as 3 months to issue a credit on a bill (trust me, I’ve been there), it seems as though Bell is the one using its customers as a bank.

  10. Mike

    Jun 8 2010

    Hey, Bell operates in Canada (wild-wild-west) charge what you want. CRTC, CCTS, Fair Business Bureau doesn’t care.
    Next year instead 42.58% you will see $500.000.00 one time payment and they have rights to send collecting agency after you.
    If you don’t want turn Canada in to 3-rd world country – BOYCOTT BELL!!!

  11. Lior

    Jun 8 2010

    Well, the late fee affects those who pay late, not every customer.

    I still believe, though, that if Bell takes its time issuing credits or refunds it should pay the same rate if the credit or refund is outstanding for more than 30 days. It’s only fair.

    And it’s not only Bell. We should make this mandatory on all companies. Once they realize they have money to lose, they’ll start smarten up their billing systems.

  12. Jane Hall

    Jul 14 2010

    I am another victim of Bell’s incompetency and I feel illegal billing practices.

    As a busy small business owner who works seven days a week, I rarely analyze bills coming in and hand them over to be filed and sign the cheques at the end of a month.

    Last week, my business line was disconnected. In trying to get the issue of how I could owe what they were telling me, such a large amount of money, I pulled the bills out and analyzed them with a fine tooth comb. I was shocked at what I found.

    Most disturbing was finding that I was being billed for services I had never authorized, such as Bell charging me for hosting 2 websites at 46 dollars a month for 3 years!

    I have had only one website and it has been hosted by independent service providers for 7 years.

    In addition, I was being charged for 2 internet accounts for those same 3 years. My IT guy who set up my system also asked for the security pack to be removed and it wasn’t. I was continued to be charged for it on 2 lines.

    Bell’s practice of occasionally breaking down what the “monthly service charge” represents hides what they are charging you for. I had to go through years of bills to know what I was paying for to catch this overbilling and unauthorized services.

    They are attempting to collect $1,500 for an internet account that never existed and they have collected $1,300 for services that were never authorized.

    I have been on the phone with them for countless hours over a 5 five day period now, as they only work till 4:30 and not on the weekend (unlike any self employed person who works works twice that many hours).

    My business has now been without a phone number for a week and it could be a kiss of death, as people may think I have gone OUT of business!

    Thousands of business cards, my website, marketing materials, all have my phone number on them. As a small company, I cannot afford to pay now and hope to get my money back later.

    I have already signed up with Teksavvy and set up a new VOIP phone service, but to import my number may take a month and I may lose my business by then.

    If I treated my customers like that, I wouldn’t have any. I believe we should all give our business to independent service providers and stop supporting the companies whose internal company policies are to deceive and frustrate the customer so that they give up and they get to keep our money.

    Any answers would be great!

  13. Peter DeWolf

    Jan 10 2011

    One of the largest problems with Bell is their billing cycle.

    Many commenters have pointed to the fact that some habitually pay late – something a few who did not know the facts accused me of when I sued Bell.

    The FACT is that Bell not only bills in advance for most routine services – (interest should not be charged until after a service or product is delivered) – but they do not give 30 days to pay, despite their protest to the contrary.

    If the billing date (in advance) is January 5th, then the actual bill does even leave their mail room until as late at Jan 15th. By the time it normally arrives – it is Jan 20 or later. With a payment due date of Jan 25th, even if you IMMEDIATELY mail it back – it will not show up on their records until sometime in early February – assuming there are no holidays.

    This gives you no time to examine the bill for th many errors they seem to have – or resolve those issues. If you are away on business or vacation – God help you.

    The fact is if you wait a full 30 days to pay after recieving the bill – not only will you be charged interest, but likely also be charged an administration charge of $25.

    As others have noted, Bell takes upward of 60 to 90 days to pay its bills.

    As to the accusation of not paying bills routinely on time, I have a credit score of 791 with Equifax. So the problem is Bell, not my ablity or willingness to pay legitimate bills on time.

    Just to set the record straight.

    Peter DeWolf

  14. J

    Jan 21 2011

    Stephen Harper is to busy campaigning once again on public dollars (under the guise of Canada Action Plan) to look into this kind of thing. Fact is, Canada is awash with huge corporate interests breaking laws and telling lies.

    Bell has a horrible reputation and Rogers isn’t far behind. The Supreme Court will not hear cases against Stephen Harper.

    What is the point of honest living in this kind of setup? I’m currently fighting an Iqor credit issue brought on by Rogers. I have discovered thousands of people have sued Iqor and all settled out of court. It’s a numbers game of lies that is obviously profitable for them.