Do parking fines from private lots affect your credit score?

Many of us know the sinking feeling. We return to our cars only to find a slip of paper on the dash — spelling out a pricey fine for overstaying our parking.

In Vancouver, it happens to folks who’ve paid for parking, too. Back in June Daily Hive first reported the story of a local radio host who was ticketed in a downtown EasyPark lot four minutes after he paid.

Turns out, it’s a common problem. After we published the story, complaints poured in from others with similar experiences. According to EasyPark, communication delays sometimes occur between their pay metres and enforcement officers’ devices, and the company encouraged users to dispute tickets online that were issued in error.

But there was also a cry from readers urging those ticketed in private lots not to pay the fine and ignore it completely. But how risky is ignoring a fine from a private parking company? We spoke to the experts to find out.

Eva Wong is the co-founder and CEO of Borowell, a financial technology company that helps people understand, build, and use their credit score. Her company liaises with Canada’s two credit-monitoring bureaus, Equifax and TransUnion, and they’ve indicated they don’t incorporate private parking fines when calculating a person’s credit score.

“What we understand from them is they will not take collections if they are related to a private parking lot,” she said. “That being said, it’s possible that it gets reported and ingested by the credit agency by mistake, in which case you’d have to dispute it.”

She explained that, historically, only lending products would be included in credit scores. Examples of those include car loans, student loans, mortgages, and credit cards. But more recently, other items, such as telephone bills, have been included. Renters also now have the option of voluntarily reporting rent payments to bureaus to improve their score.

“There’s a lot of payments that if you make them on time, they don’t get reported to the credit bureau,” Wong said. “But if you stop paying them, they can be sent to collections and can have a negative impact on your credit.”

Daily Hive reached out to Equifax and TransUnion to confirm they don’t incorporate private parking fines when calculating credit scores. Equifax did not respond to our request for comment, but TransUnion confirmed it does not report information related to unpaid parking fines.

But wait, how do private parkades find out driver information to send an unpaid fine to collections?

Lindsay Wilkins, media relations advisor with the Insurance Corporation of BC, told Daily Hive it has agreements with parking companies and municipalities to identify vehicle owners in accordance with BC’s Freedom of Information and Protection of Privacy Act.

Signs posted in lots advise drivers that parking grants ICBC permission to provide their name and address for the purpose of collecting unpaid fees.

“The terms of the agreements are strict, and the only information released is the name and address associated with a parking violation for a specific licence plate number,” Wilkins said. “We don’t release telephone numbers.”

Of course, there are other risks to not paying a private parking fine. Vancouver lawyer Kyla Lee explained that continuing to park in a private parkade without paying opens the door for the lot to enforce trespass consequences, including towing a customer’s vehicle.

There’s also the possibility that a driver could be charged with theft for taking up a stall and preventing the parkade owner from making money. Although she doubts police have the resources to enforce that.

Lee had another tip. Instead of completely ignoring the fine, she suggested sending the company a cheque for the exact amount of time you were there, along with a letter stating final payment was made.

“If they cash the cheque, that’s essentially them accepting your offer to settle it,” she said. “And they can’t do anything to you.”

What about municipal fines?

Private fines differ from tickets you get from the municipality where you live. Lee says municipal fines are more legally enforceable than private fines — since the driver is violating a bylaw rather than a private company’s own rules for the lots it operates.

The City of Vancouver told Daily Hive that unpaid parking tickets are sent to a collection agency. The person will end up owing the ticket value, plus 50%, plus a $25 fee.

Online, the City also confirms it can tow a car with an unpaid parking ticket to its name. But the City spokesperson denied rumours that it would ever repossess someone’s property, skim their paycheque, or use other means to collect the fee — saying it tickets a vehicle, not a person.

Wong, who’s based in Toronto, said her company looked through its database of more than 2.5 million members to see any collection items where the creditor is the City of Toronto or the City of Vancouver. They found that all city-related collection items were over $100 and concluded that a smaller fine, such as a parking ticket, may not be big enough to be worth sending to a collections agency.

So, all in all, avoiding a private parking fine may not impact your credit score as long as you can go the rest of your (or your vehicle’s) life without parking in that company’s lot again. It’s certainly a risk to weigh.

What’s your strategy for dealing with parking tickets? Let us know in the comments.