Collection Agencies Act – What You Need To Know

By Sean on March 30, 2020 No Comments
Young women sitting at a desk on her phone looking at a credit card

The goal of the Collection Agencies Act is to keep collection agents from participating in a prohibited practice. Basically, for a collection agency to collect from those who owe, they must follow. According to the act Canada lawmakers created, it prohibits certain behaviours and tactics.

While it may be their right to receive payment of the debt, agencies went unchecked for a long time. Their unsavoury practices led to the creation of the Collection Agencies Act, as well as the Collection and Debt Settlement Services Act.

Learn more below regarding how agencies can carry on the business of collecting without treating you unfairly.

How the Collection Agencies Act Protects You

If any collection agency partakes in any of the following activities, they are subject to various consequences. Because many of the repercussions come from provincial law, they vary across regions. For example, when an agency contacts you in Ontario, they must also include a disclosure statement, which explains your rights.

However, the infractions set by the Collections Agencies Act remain the same throughout Canada.

Harassing language or treatment: Collectors participate in discussion or activity that feels or sounds like harassment. Examples include:

  • The use of derogatory language
  • An excessive amount of calls short period of time
  • Cursing, yelling, or making threats of jail time

Inappropriate calling hours: Collectors may only contact you from Monday through Saturday, from 7am – 9pm. On Sundays, the calling hours are from 1pm – 5pm. Collectors cannot call during statutory holidays.

Withholding information: If you ask, the agency must also disclose the bank, lender, or creditor held the debt prior. Withholding this information is unlawful.

Legal action without prior notification: If a collection agency wants to sue you for the funds you owe, they must first send you written notification.

Contact with friends, family, or co-workers: A collections agent must deal directly with you. Calling friends, family or coworkers to reach you is forbidden. They can’t ask you about debts for other persons, either, so avoid giving out information.

Please note the Collection Agencies Act caveats to the above contact rules:

  • Agencies can call your employer:
  • To verify your employment, position, and work address
  • If the employer guaranteed your debt
  • You gave them permission

Agencies can call your relatives or friends:

  • For your contact information if the agency does not have it on file already.
  • If you told the agency to call that person
  • That person guaranteed the debt

The laws requiring collection agencies to adhere to the above are serious. If a collector committed an offence according to the above laws when contacting you, there are options.

Dealing with Abusive Collections

If you have experienced any of the above when dealing with a collections agency, you have the right and power to file a complaint.

If the debt in question has any connection with a federal institution, you can file a complaint against the perpetrating collection agency here.

Otherwise, you can contact the local government office for your province or territory to file a complaint.

If you were unaware, anyone with a person representing them can cease getting phone calls from the debt collectors. For example, you no longer need to talk to collections if you have engaged with a:

  • Licensed insolvency trustee
  • Bankruptcy lawyer
  • Credit counselling agency

If you receive a call after signing up with one of the above, you can forward that information. You can trust accounts seeking collection from you will contact your representative. If they don’t they’re breaking the law.

Understanding Your Rights in Collections

The collections process to claim funds is determined by government law, act or regulation. Some collectors may try to make you think that they have more power over your life than they have in an attempt to get you to pay your debts.

Collections Agencies cannot threaten to:

  • Have you thrown in jail
  • Take your home or repossess your vehicle without a bankruptcy judgment against you.
  • Contact your boss to have you fired or have your wages garnished
  • Get you blacklisted from qualifying for credit again.

Speak to a Professional who can help

Do you need more information or explanation of the Collection Agencies Act? We have a team of people who can assess your situation and explain your consumer rights in detail. If you do need help with your outstanding debt, one of our associates can identify your viable options and give you guidance in taking the first steps to debt freedom.

Call us today to learn more about your debt relief options and rights against collections agencies.



Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense. Connect with Sean on LinkedIn, Twitter, Facebook and Instagram.

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