Can this *&$@*# collection agency do this? What are my rights?
In Ontario, collection agencies must be registered with the Government of Ontario and must follow the rules set out in Ontario’s Collection and Debt Settlement Services Act.
When a collection agency contacts you to collect money that you may owe or when you can’t pay a debt, they must follow those rules.
If you’re contacted:
Before a collection agency can contact you they need to send you a written notice through regular mail (email doesn’t count).
This notice must include:
- the name of the person or business that says you owe them money (known as the creditor)
- the amount of money that the creditor says you owe
- the name of the collection agency and a statement that the creditor has asked them to collect the debt
After sending the notice, the agency must wait six days before they can contact you in person or by phone.
After their first conversation with you, an agency can’t contact you more than three times in a seven-day period without your consent.
“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. A letter sent by regular mail also does not count as a contact.
If the debt is mistake or an incorrect amount:
If you think that they have the wrong person or that the debt is incorrect:
Contact the collection agency and explain. They must take reasonable steps to make sure you are the right person to contact about the debt:
• If you are not the right person, they can’t keep contacting you.
• If you are the right person, but the debt is incorrect, you can take the following steps:
- if you already paid the debt, contact the collection agency and, if applicable, original creditor to correct the error. Provide supporting documentation if available.
- check your credit report to see if the amount is correct and write to the credit reporting agency and provide the correct information.
A collection agency cannot do any of the following to you, or anyone else:
• phone on holidays, Sundays (except between 1 p.m. and 5 p.m.), or on any other days between 9 p.m. and 7 a.m., unless you request it;
• use threatening, profane, intimidating or coercive language;
• use undue, excessive or unreasonable pressure; or harass you;
• contact you more than three times in seven days on behalf of the same creditor, subject to certain exceptions;
• give false or misleading information to any person;
• contact you in a way you told them to stop using because it cost you money; or
• charge you any fees, other than for non-sufficient funds on cheques.
A collection agency can contact the following people but only in limited circumstances:
- Your employer:
• once only to confirm your employment, business title or business address;
• if your employer has guaranteed the debt and the contact is about that guarantee;
• if it’s about a court order or an automatic salary deduction (wage assignment); or
• if you have given the collection agency written permission.
2.Your spouse, family or household member, relative, neighbour, friend or acquaintance:
• to get your contact information if the agency doesn’t have it already;
• if you asked the agency to discuss the debt with that person; or
• if that person has guaranteed the debt and the contact is about that guarantee.
Ask the right questions when a collection agency contacts you, such as:
- may I have your Ontario registration number?
- have you sent me a written notice with my creditor’s name and the amount of money that I owe?
- how often will you be contacting me?
If you’re contacted by mistake
A collection agency can’t keep contacting 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 or paralegal) send a registered letter with your lawyer or paralegal’s contact information telling the agency to communicate only with your lawyer or paralegal
- you have told them that you are not the person they are looking for, unless the agency has taken reasonable steps to make sure you are the person that they should be contacting
A collection agency can’t contact your spouse, family member, a relative, neighbour or friend except to get your address and telephone number, unless:
- the person has guaranteed the debt
- you have given permission for the person to be contacted to act on your behalf
Also, a collection agency can’t:
- give false or misleading information to any person
- recommend that a creditor take legal action against you without sending you notice first
File a complaint
If a collection agency has broken the rules, you can send the agency a letter and include what you believe they did wrong and that you expect them to follow the law
If this does not resolve the problem, you can file a complaint. Learn more how you can do this at http://www.ontario.ca/consumers/filing-consumer-complaint
If you file a complaint, be sure to include documents and evidence to support it. For example, you can include:
- all letters, emails and faxes that you sent or received from the collection agency
- a record of the date, time and details of the phone calls or messages you received
- a photograph of your telephone display showing the collector’s phone number and the time they called
- digital recordings of phone messages or conversations
- letters from your employer, co-workers, family or friends confirming that the collector contacted them
Tips to deal with debt
If you are contacted by a collection agency, try to pay the money you owe as soon as possible. Otherwise, the problem could get worse. If you can’t pay the full amount that you owe at once, try to arrange monthly payments.
The person or business that you owe money to might:
- take you to court and get a judgement against you, allowing them to seize your assets or take part of your salary
- sell your debt to another person (your rights under Collection and Debt Settlement Services Act would not apply unless that person hires a collection agency)
- report the debt to a consumer reporting agency, which could lead to you having a bad credit record
When paying off your debt, make sure to:
- never send cash and always get a receipt or proof of payment
- not bounce cheques and miss payments
- contact the collection agency in writing if your financial circumstances change or you can’t make payments
- contact the agency and the original creditor if there is a mistake in your account
- deal only with the collection agency to avoid any confusion, if everything is correct
Where to get help
If your financial problems are getting out of hand, consider contacting a credit counselling service for help through:
- The Ontario Association of Credit Counselling Services
- Credit Counselling Canada
- The Canadian Association of Insolvency and Restructuring Professionals (CAIRP)
Credit counsellors are different than debt settlement services. Debt settlement services will charge you a fee to help you negotiate a plan to repay your debts. Credit counsellors are often not-for-profit organizations.
Watch out for debt settlement companies that:
- say they can reduce your debt by 50% or more
- charge large, upfront fees
- claim that if you work with them there will be no negative effect on your credit report
- claim that their program is approved by the government
- say they can get collection agencies to stop calling you
Always take the time to understand your contract.
Remember that some of these companies will charge a cancellation fee if you want to end your contract before the end of its term.
They may also not refund any money that you paid them.
