Your Rights When Dealing With Collection Agencies

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Right off the bat

The first step a collection agency must take is to send you a written notice through the mail (email doesn’t count). This notice must include:

  • the name of the creditor (the person or business that says you owe them money)
  • the amount the creditor says you owe
  • the name of the collection agency and its authority to demand payment on behalf of the creditor.

After sending the notice, the agency must wait six days before it can contact you in person or by phone.

What if they’re wrong?

The agency cannot continue to contact you if:

  • you send a registered letter to the agency saying that you dispute the debt and suggest the matter be taken to court
  • you (or your lawyer) send a registered letter to the agency providing your lawyer’s contact information and notifying the agency  to communicate only with your lawyer
  • you have told them that you are not the person they are looking for, unless they take reasonable precautions to ensure you are that person.

How often can they contact you?

The agency has to observe a number of restrictions about how often their agents can contact you and how they communicate with you. For example, after their first conversation with you, the agents cannot contact you more than three times in a seven-day period without your consent, except by regular mail. “Contact” means the agents must actually speak with you, email you or leave you a voice mail. If you don’t answer the phone and the agents don’t leave a message, it doesn’t count as a contact.

In addition, the agency cannot:

  • contact you on Sunday, except between the hours of 1 p.m. and 5 p.m.
  • contact you on any other day of the week between the hours of 9 p.m. and 7 a.m.
  • contact you on a statutory holiday
  • use threatening, profane, intimidating or coercive language, or
  • use undue, excessive or unreasonable pressure.

Can they ask other people about you?

In general, a collection agency can contact your employer once to obtain your employment information. Otherwise, they cannot contact your employer unless:

  • your employer has guaranteed the debt
  • the call is in respect of a court order or wage assignment given to a credit union
  • you have provided written authorization to contact your employer.

A collection agency cannot contact your spouse, a member of your family or household, or a relative, neighbour or acquaintance except to obtain your address and telephone number, unless:

  • the person contacted has guaranteed the debt
  • you have given permission for the person to be contacted.

In addition, a collection agency cannot:

  • give false or misleading information to any person
  • recommend to a creditor that a legal action be commenced against you without first sending you notice.

Can a collection agency charge you extra?

No. Collection agencies cannot add any charges. They are allowed to collect only what you owe your creditor. But remember, the amount you owe could continue to grow if interest charges are piling up. This depends on the terms of your contract with your creditor.

Exercise your rights

If you believe a collection agency has violated any of these practices in dealing with you:

  • send the agency a letter outlining why you believe they have acted inappropriately and notifying them that you expect them to comply with the law
  • if their behaviour persists, file a complaint with the ministry.

Solve the problem

If you are contacted by a collection agency, it’s important that you deal with them to resolve your debts as soon as possible. Otherwise, the problem won’t go away and could very well get worse. Your creditor might:

  • report you to the credit bureau
  • take you to court and get a judgement against you, allowing them to seize your goods or claim part of your pay  cheque
  • sell your debt to a third party. In this case, the rights available to you under the Collection Agencies Act may not apply.

It’s always best to deal with debts before you get to this point.