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What Can Debt Collection Agencies Actually Do in Canada?

by:
Sandy Daykin

It's not unusual to experience anxiety when you have a lot of debt. For example, you might have to deal with loan denials, sleepless nights, arguments with loved ones. But perhaps one of the most distressing consequences of debt is debt collection phone calls. I’ve spoken with many clients who’ve resorted to unplugging their landline and putting their cell phones on silent to stop the constant ringing. But where does Canadian law draw the line when it comes to collection calls?
Here we cover some of the most common questions about debt collection agencies and what they can and can't do.

When Can a Debt Collector Call Me?

The rules in most provinces state that debt collectors are only allowed to contact you at the following times:

  • Monday through Saturday between 7am and 9pm (in some provinces, the hours may be 8am through 10pm)
  • Sundays between 1pm and 5pm

And debt collectors are not allowed to contact you on holidays.

How Frequently Can a Debt Collector Call Me?

While it's not uncommon for some collection firms to phone debtors daily, in some provinces this is actually illegal. Yukon Territory legislation states that collection agents cannot make calls so often that it could be considered harassment. (Unfortunately, what constitutes as harassment isn’t clearly defined.) However, in Ontario, Alberta, and Nova Scotia there is a “three strikes” rule, limiting collection agents from emailing, leaving voicemail, or speaking with you three times within a seven-day period after having an initial conversation with you.

Can a Debt Collector Sue Me?

Collection agencies use a variety of unscrupulous tactics to try to wring money out of debtors. One tactic involves threatening a lawsuit, criminal prosecution, wage garnishment, or even jail time when they have no authority to do so. (They might even produce phony documents showing that any of these actions are going to take effect within a certain time period.) Collectors, on behalf of the creditor, must take you to court first and win before any such action can take place, with the exception of money owed to the government or to a credit union—they can issue wage assignments, which is really just wage garnishment but without having to go through the courts.

While nearly every province or territory has consumer protection laws addressing (and forbidding) such tactics, that doesn’t stop some collection agencies from using them because most debtors are unaware of their rights. You can read more about the court process with creditors in this blog on What Happens if a Creditor Takes Me to Court

Can a Debt Collector Use Threatening Language?

No. By Canadian government law, collection agents are not permitted to use profane or intimidating language when dealing with debtors, and they are never allowed to threaten physical harm.

Can a Debt Collector Call Other People I Know?

Yes and no. Debt collectors are allowed to contact your family, friends, neighbours, employer, and the like, but only to attempt to get your phone number and address, or to confirm your employment. In doing so, they cannot discuss your debt with these people, and once they’ve made contact, they cannot call them again. There are exceptions, however, if the person being contacted co-signed your loan or you’ve previously given the financial institution permission to contact the individual.

When Can a Debt Collector Harass Me on Social Media?

Being relatively new, social media isn’t addressed when it comes to debt collection rules. However, it’s probably safe to say the basics apply, like they cannot intimidate or threaten you or anyone you know. Because laws regarding social media are always evolving and often vague, it’s best to always use caution when accepting friend requests from people you don’t know, as it could be a debt collector.

Further Resources and Help

The best defense against debt collectors is to know your rights! And while there are general rules that collection agencies across Canada must abide by, they do vary slightly province to province. If you would like to learn more about the specific rules for your province or territory, check out the Office of Consumer Affairs (OCA). If you have questions or concerns regarding the actions undertaken by a collection agency, you can also contact your provincial or territorial consumer affairs office directly; for a full list, check out the Canadian Consumer Handbook.

If debt and collection calls have you feeling overwhelmed, book a free debt counselling session with Credit Canada and one of our certified, non-profit credit counsellors can give you all your best options for stopping those calls once and for all. (One option might be our Debt Consolidation Program.) At Credit Canada, we’ve been helping people live debt-free for over 50 years, and we can make the phone calls stop. Contact us today at 1.800.267.2272 to learn more. 

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Topics: Collection Agencies

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