An overdue bill for a leased photocopier could be the final straw for a financially-troubled Edmonton charity.

Credit Bureau of Canada Collections is demanding more than $66,000 from Changing Together — A Centre for Immigrant Women.

The Charity believes the debt was only about $6,100, and has been paid.

The Centre has served women immigrants in Edmonton for almost 30 years, providing classes in English language training, parenting, citizenship, family violence prevention, and computer training.

But recently it has struggled financially.

"We had over a million-dollar budget in 2010," said new Executive Director Dilara Yegani.

"In 2010 to 2011 our federal funding was cut in half."

The following year the federal money was halved again. Other levels of government have also cut back their grants, and other donors grew wary when an audit revealed the charity had accumulated substantial debts.

"They bit off more than they could chew," and there were problems with financial management, said Sister Diane Brennen who is now acting as the charity’s treasurer on a volunteer basis.

Changing Together has had to radically pare back its operations.

Today it has only two paid staff, and has greatly reduced its office space.

Its annual budget has shrunk from $1,000,000 to a little over $50,000.

"It’s horrendous," Brennen said. "We’re afraid of losing our centre. We don’t have the funds to pay for this. We don’t understand why we’re required to pay this, and nobody is helping us understand."

Elaborate copier supposed to save money

Josephine Pallard, was one of the centre’s founders, and is now the volunteer program director.


Changing Together's volunteer director Josephine Pallard was one of the centre’s founders. (CBC)

In 2011, while executive director, Pallard signed a 5 ½ year lease for a Ricoh copier costing almost $800 a month.

"We had all the plans of saving money," Pallard said.

"A booklet that would cost $10 outsourcing could have cost $4 or $5 here when we have the machine. If you put up 100, 200 copies for circulation you're really saving a lot."

Pallard resigned as executive director shortly after signing the lease, and most of the bills were never paid.

Paper trail a maze

The lease Pallard signed in 2011 was with Ricoh Canada. The charity then received documentation from Ricoh’s financial arm IOS Financial Services which later changed its name to RFS Canada.

Later, the charity began receiving documentation from CIT Financial.

In September 2011, as the unpaid bills started mounting, Changing Together agreed with CIT Financial to return the copier. However, it was more than a year before the copier was eventually collected.

In the meantime, beginning in early 2012, letters started arriving from the collections department of another finance company, De Lage Landen, part of a Dutch multinational financial group.

In February 2012, De Lage Landen demanded immediate payment of $2,890.68. The bills came in monthly, with a "Final Demand" for $8,016.00 in June.

More invoices arrived in September for $11,120.64, and in December for $14,721.16.

Then in February 2013, De Lage Landen sent an invoice for $66,297.25.

"It’s horrendous," Brennen said. "Especially for an agency that is non-profit. To jump from $15,000 to $66,000 is crazy."

A letter from the collections agency arrived five days later.

"Changing Together made no payments to De Lage Landen and did not sign any agreement regarding photocopying with DLL," said Karen Sigurdson, Changing Together’s board chair.

Sigurdson says she can find no mention of De Lage Landen in their lease agreement paperwork.

Sigurdson believes Changing Together has evidence it paid the original lessor, Ricoh Canada, everything it owes, about $6100.

Calls to Silva Frat, De Lage Landen’s Collections Manager, were not returned.

Credit Bureau of Canada Collections refused to comment.

Paper trail unclear even to forensic accountant

Go Public showed Changing Together’s documents to forensic accountant Justin Thoman.

"I'm not even clear on who all the players really are here," Thoman said.

"And in the end I'm not even sure they're necessarily talking to each other. The company that actually originated the lease, they might not be telling the collection agency that some amounts have been paid or the equipment has been returned, or that the future lease payments are no longer collectable.

Thoman says it’s not clear how De Lage Landen and Credit Bureau of Canada Collections arrived at $66,000, even if they were demanding every cent the charity would have paid had it kept the copier for the entire lease period.

Still, he says, Changing Together is in a tough spot because debt collectors can be single-minded when they believe they have the documents to support their case.

Early negotiations key in such case, says lawyer

Settling a debt is more difficult once things have gone to a collections agency, experts say.

"They’re more running it as a numbers game, because their compensation is tied to what they collect," said Stephanie Wanke, an insolvency lawyer with Ogilvie LLP.

The best time to have settled, Wanke says, was in 2011, when Changing Together was negotiating to return the copier.

"One of the worst things to do is hiding your head in the sand," she said.

Both Wanke and Thoman say the charity needs professional advice to sort through to whom they owe money, what they’ve paid, and what remains to be paid; something that could be hard to get given Changing Together’s shaky finances.

Co-founder Josephine Pallard says she’s not giving up hope.

"I’m not worried," she said, "because I believe these people will understand that non-profits are here for humanitarian purposes and not business."