Richard McGrath says he got a “rude awakening” last Friday when┬аhe received an alert from his credit bureau┬аthat his credit score had unexpectedly taken a nosedive.┬а
The 57-year-old teacher┬аsoon learned from the City of Ottawa that, back in 2005,┬аbefore his university-age daughter was even born,┬аhe’d been physically handed a┬а$127 ticket on Elgin Street тАФ and it remained unpaid to this day, he said.┬а
McGrath┬аisn’t questioning the city’s account.
But he’s upset┬а“an insanely old ticket” he has no memory of┬аhas resurfaced 19 years later, sending his credit score plummeting┬аmore than 100 points just as he was planning home renovations.
“They didn’t reach out in any way to talk about it before,” he said of the city. Had they done so, “I would have been happy to pay the ticket.”
‘A┬аvalid collection tool,’ city says
McGrath isn’t alone.
Others have gone online to complain about surprise alerts┬аrelated to old Ottawa fines.┬а┬а
Several have pointed to Jan. 12, 2024, as the date the┬аcity’s latest hired collection agency, Financial Debt Recovery (FDR), apparently opened files on them.┬а
Joseph Muhuni, the┬аcity’s deputy treasurer of revenue, said Ottawa has used such companies for decades but┬аthat┬аFDR’s five-year contract to take over debt collection previously attempted by other companies┬аwas awarded in January.
That may be why residents started hearing from┬аFDR┬аaround that time, he said.┬а
“I┬аthink [FDR]┬аsort of┬аthreatened perhaps some enhanced collection activities such as credit bureau reporting,” Muhuni said.┬а“We now understand of course they’ve proceeded to place some items on … individuals’┬аcredit report[s].”
Muhuni said he could understand how the resulting alerts might have come as a shock, but that credit reporting is “a valid collection tool” used by many companies
Prior to that, people typically receive repeated notices over several months if they haven’t paid a ticket, he added.┬а
Michael Famutimi, general counsel for FDR, said via email the company is obligated to remind all consumers of their required payments and to report those payments, whether they’re made or unmade,┬аto credit history keepers.
‘Nobody contacted me’┬а
Doug Hoyes,┬аa licensed insolvency trustee in Toronto, said municipalities┬аregularly send debts they have been unable to collect, such as parking tickets, to collection agencies.
The question is whether those agencies provide┬аpeople┬аthe legislatively required six days’ notice before they “demand payment or otherwise attempt to collect payment,”┬аhe said.┬а
McGrath┬аsaid that, between the city and FDR, “nobody contacted me” and so the credit score alert was an “unpleasant shock.”
He said he has paid FDR┬аbut┬аdoesn’t expect his credit score to bounce back for months.
