Know Your Rights: Collection Agencies

If you owe money, you may have received a call from a collection agency. Hopefully, all you received was a call. Unfortunately, collection agencies can be quite aggressive when it comes to trying to get paid. They might make frequent calls, they might use threatening language, and they might even attempt to get in touch with your friends or relatives to put more pressure on you. This can be an incredibly stressful situation and a very difficult one to deal with. Some people have stopped answering the phone because collection agencies won’t stop calling while others spend their days watching over their shoulders because they’ve been threatened by a debt collector.

The good news? Many Canadian provinces and territories have laws that restrict what collection agents can do to collect money. Knowing your rights can make it easier for you to deal with collection agencies.

A collection agency is a company that is hired by a creditor to collect money that is owed to them. This agency is not involved in the original loan, but has since been hired to collect the loan. If you owe money to an organization or person and have not recently sent in payment, the creditor is legally able to turn your file over to a collection agency.

Collection agencies are allowed to make reasonable contact with you to request payment. However, there are laws that must be followed.

You must be notified in writing if your debt has been turned over to a collection agency. Email does not count. A reasonable attempt to notify you in writing must be made before the agency can attempt collection. This notice must include the name of the person or business that says you owe them money (the creditor) as well as the amount owed and the name of the agency that has been hired to collect the debt.

Specific rules regarding notice and contact vary between different provinces and territories, but many have laws that restrict how often a collection agent can contact you and when they can do so. For example, in Ontario, after sending the initial notice, the collection agency must wait six days before contacting you by phone or in person. After this first conversation, the agency may only contact you three times within a seven-day period, unless you give permission to do otherwise. While these laws are specific to Ontario, many provinces have similar guidelines.

As mentioned, each province and territory has specific regulations regarding collection agencies and what they can and cannot do. For example, most regions have rules regarding what time a collection agency can contact you and how often they can contact you, as well as days that they are prohibited from contacting you (usually Sundays and statutory holidays).

In most regions of the country, there are also laws against continuing to demand payment from a person who claims not to owe the money, unless the collection agency has taken all reasonable steps to ensure that the person does actually owe the money.

Nearly every province and territory has laws that prohibit collection agencies from using false information (such as pretending to be someone else or using phoney or nonexistent documents as a threat) as well as laws that prevent the agency from threatening to take legal action if the firm has no intention of doing so.

Many provinces also have laws against collection agents using harmful, coercive, intimidating, or profane language as well as laws against threats of physical harm.

Finally, in general, most provinces and territories have laws that state that a collection agency cannot contact your friends, family, or employers to discuss your debt or to embarrass or threaten you into paying. However, they may contact these people only to figure out your mailing address and, possibly, in situations where a family member, friend, or co-worker has agreed to act as a guarantor on your debt.

To find out the specifics for your province or territory, please follow the links on the Office of Consumer Affairs’ page on Collection Agencies.

If you feel that a collection agency has broken the laws in your province, you can file a complaint with your province. When filing, it’s important to provide as much information about the situation as possible, including: all letters, emails and faxes sent to or received from the collection agency; a record of all phone calls you received as well as any voice messages; details of each call; and any other relevant information.