- Canada's Criminal Justice System: An Overview
- Charged with A Crime
- Police and Judicial Release
- Diversion Programs
- The Trial
- After the Worst of Verdicts
- ADR - Frequently Asked Questions
- ADR - Small Claims Court
- When do you use Alternative Dispute Resolution?
- Cell Phone Contracts
- Landlord and Tenant Board Mediation
- How to Negotiate
- Straight Talk on Collection Agencies
- Pre-paid Memberships
- Phony Business: Telemarketers and Telephone Scams
- Consumers and Motor Vehicle Repairs
- Home Renovations and Consumer Protection Laws in Ontario
Law Talk: Straight Talk on Collection Agencies
June 2010
Debt can happen to anyone. Falling on hard times, overspending, or simply being dissatisfied with a product are just a few of the reasons debts go unpaid. But whatever the reason, if you owe money, your creditors may choose to use a collection agency.
Collection agencies collect debts on behalf of people or businesses. In Ontario, agencies are governed by the Collection Agencies Act and the Ministry of Consumer Services. If you find out a collection agency has taken over your file, do not panic. Below are a few things you can do if you find yourself dealing with an agency.
If you believe you owe the debt, the first thing you should do is contact the collection agency and, if possible, pay the debt. If this is not possible, call them and explain why you cannot pay, and discuss alternative payment arrangements. If you reach a payment agreement with an agency, confirm it in writing and enclose a "good faith" payment to the agency. Never pay in cash and make sure you keep records of all transactions in case there are issues in the future. During the payment process do not contact the original company, as this will create confusion.
Finally, if you are experiencing serious financial problems, you should consider contacting a credit counselling service. These nonprofit organizations can assist you with creditor calls and repayment plans as well as long term financial planning. For a list of credit counselling services across Ontario, please contact the Ontario Association of Credit Counselling Services at www.oaccs.com or call 1-888-746-3328.
If you do not believe you owe the debt, notify the agency and business in writing about why you believe it is a mistake. Follow up with a written letter confirming the account has been cleared. Do not make payments, offer to make payments, or admit to owing money. By law, a collection agent cannot continue to demand payment if a consumer claims he does not owe unless the agency takes all reasonable steps to ensure the person is a debtor.
The Collection Agencies Act sets out other rules to protect you from abuse by a collection agency. If a collection agency breaches any of the following regulations, contact the head of the agency by phone and in writing. If you are still not satisfied, contact the Ministry of Consumer Services (at www.ontario.ca, click on Consumer Protection or call 416-326-8800 or 1-800-889-9768; TTY: 416-229-6086 or 1-877-666-6545). The Ministry can investigate, leading to the possible suspension or revocation of the agency's registration. Breaches of the act can also result in significant fines, imprisonment or both.
The agency must tell you the creditor's name, its name and the amount owing. You do not have to pay any more than what is owed to the creditor, and do not have to pay the cost of collecting the debt. A collector cannot contact you in a way that costs you money.
A collection agency may contact you by mail or by phone. By mail, the agency must wait six days to contact you again after each letter. By telephone, a collector cannot contact you more than three times in a seven-day period. They can only call from 7 a.m.-9 p.m. Monday to Saturday, 1 p.m.-5 p.m. on Sundays, and never on statutory holidays.
The collector cannot give false information or use threatening, profane, intimidating or coercive language. Keep a record of the date, time and frequency of calls if you believe you are being harassed.
The agency can only contact you. If a family member or friend has given a guarantee to pay the debt, an agency can only contact them in respect of that guarantee. The agency can also call if they are only seeking your home address or telephone number.
The agency cannot contact your employer, unless the employer has guaranteed to pay the debt, or a court has issued a judgment in favour of the agency. The collector may call once to confirm your employment.
If an agency chooses to take legal action, it must get written permission from the creditor and must notify you beforehand. An agency cannot contact you if you have notified it through registered mail to communicate only through your lawyer. You must provide your lawyer's name, address and phone number.
This column provides legal information only and is produced by the students of Community Legal Services and Pro Bono Students Canada (UWO). If you need legal advice please contact a lawyer, community legal clinic or the Lawyer Referral Service at 1-900-565-4LRS.