09/20/2012 06:06 EDT | Updated 11/20/2012 05:12 EST

Debt collector hounded over its own debts

Anyone who has ever received a stern call from a debt collection agency might be forgiven for a little schadenfreude on this one.

One of Canada's largest debt collection agencies, iQor Canada Ltd., was itself pursued by a smaller, rival collector after failing to pay about $55,000 in legal fees to a Toronto firm, court documents obtained by CBC News show.

The irony was not lost on the collector hired to pursue iQor for its unpaid invoices.

"I find it ironic, sure," said Janet Wigle-Vence, vice-president of finance for the Scarborough, Ont.-based Credit Control Central, "but it's not unheard of."

It began when a Toronto-based law firm, McMillan LLP (formerly Lang Michener LLP), was hired by iQor in 2010 to take care of some employment-related legal issues, including wrongful dismissal cases.

When iQor didn't pay up, the law firm got their own collection agency involved.

The debt collection agency should've known better than to avoid its own bills when it's their job to collect owed money, said Don Vence, president of Credit Control Central, the agency sent after iQor.

"It's a dichotomy to have a company calling other companies for money, or individuals asking them to live up to their financial commitments when they themselves don't," said Vence.

Neither iQor nor the law firm agreed to an interview.

Strategy pays off

In the end, the tactic of hiring a rival debt collection agency to recover the owed money from iQor appeared to have worked — for the most part.

By May 2011, iQor forked over all but $4,374 of the $55,051 owed in total.

For the remaining several thousand dollars, the Toronto law firm continued its dogged pursuit, resorting to taking the debt collection agency to small claims court, alleging it "either refused or neglected to pay."

And the next month, court documents show the law firm upped the ante, demanding not only the amount owed, but also six months interest and legal fees.

The legal wrangling worked, but how much the debt collector ended up paying for going into arrears is unknown. In August, 2011, iQor paid out an undisclosed amount after the case was settled.

IQor Canada Inc. has debt collection call centres in Montreal, Cambridge, Ont., and North York, Ont. It's a subsidiary of internationally operated iQor Inc.

Another subsidiary of the company, the U.S.-based Allied Interstate Inc., has also come into trouble over its business practices.

That case dealt with employees of Allied Interstate, one of the largest American debt collection agencies, allegedly collecting debts from people who did not even owe money.

In 2010, Allied Interstate was fined $1.75 million by the U.S. Federal Trade Commission for its alleged attempts to collect debts from debt-free individuals, "harassing phone calls" and the use of "abusive language."

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