How Are Debt Collection Agencies Regulated In Canada?

Debt Collection Regulations In Canada

Debt collection is legal in Canada. It is a regulated industry that ensures that all debt collection agencies must follow the laws set out by the province they operate within.

What Is A Debt Collection Agency?

A debt collection agency is a company that is used to recover money that is owed. The agency intervenes on behalf of the creditor (the entity that is owed money) and the person that is responsible for paying it.

What Is The Difference Between Debt Counselling And Debt Collection?

People often confuse the two but they are actually vastly different. Debt counselling is a service that helps you take control of what you owe and come up with a payment plan that makes sense for your income.

Who Regulates The Debt Collection Industry In Ontario?

All collection agencies that operate in the province, must be registered with the Government of Ontario. Furthermore, the agencies need to follow the rules put forth by the Collection and Debt Settlement Services Act. For example, a collection agency can only contact you via phone or email, after they’ve sent you a written notice through direct mail. This notice must include:

  • the name of the creditor (the business that claims you owe them money)

  • the amount of money owed

  • the name of the collection agency

  • a statement that describes that the creditor has asked the agency to collect the debt

Once the written notice has been sent, the agency has to wait six days before they’re allowed to make contact. Contact in this case, is defined as email, phone call and voicemail. Should an agency call you and not leave a message, this does not count. When they do make contact, collectors are forbidden from using threatening, profane or coercive language. Any time you feel intimidated by a creditor, it is considered harassment and you should file a complaint. Plus, a debt collector cannot charge you any fees. If they do, this is also grounds to file a complaint.

Besides the aforementioned rules, a credit collector is not allowed to contact you more than three times within a week without your consent. Moreover, there are only certain times an agency can call you. They can’t contact you between 9pm – 7am, on holidays, and on Sundays before 1pm or after 5pm.

If you are contacted by a debt collector, debt counselling is available to help. Please contact us for more information about our debt counselling services.

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