He doesn’t remember getting a $127 ticket 19 years ago. It just sunk his credit score

Richard McGrath says he got a "rude awakening" last Friday when he received an alert from his credit bureau that his credit score had unexpectedly taken a nosedive.

The 57-year-old teacher soon learned from the City of Ottawa that, back in 2005, before his university-age daughter was even born, he'd been physically handed a $127 ticket on Elgin Street — and it remained unpaid to this day, he said.

McGrath isn't questioning the city's account.

But he's upset "an insanely old ticket" he has no memory of has resurfaced 19 years later, sending his credit score plummeting more 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 valid collection tool,' city says

McGrath isn't alone.

Others have gone online to complain about surprise alerts related to old Ottawa fines.

Several have pointed to Jan. 12, 2024, as the date the city's latest hired collection agency, Financial Debt Recovery (FDR), apparently opened files on them.

Joseph Muhuni, the city's deputy treasurer of revenue, said Ottawa has used such companies for decades but that FDR's five-year contract to take over debt collection previously attempted by other companies was awarded in January.

That may be why residents started hearing from FDR around that time, he said.

"I think [FDR] sort of threatened perhaps some enhanced collection activities such as credit bureau reporting," Muhuni said. "We now understand of course they've proceeded to place some items on … individuals' credit 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.

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, to credit history keepers.

'Nobody contacted me'

Doug Hoyes, a licensed insolvency trustee in Toronto, said municipalities regularly send debts they have been unable to collect, such as parking tickets, to collection agencies.

The question is whether those agencies provide people the legislatively required six days' notice before they "demand payment or otherwise attempt to collect payment," he said.

McGrath said 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 but doesn't expect his credit score to bounce back for months.