Canadian debt collection is regulated by the provinces and territories, all of which have similar laws and practices. Their regulations strive to allow creditors to collect the money that is rightfully owed to them while preserving the rights of the debtors. Until quite recently the process of debt collection was not regulated. Predictably, this resulted in unfair practices against debtors. Collection agencies often relied on disrespectful practices such as calling at all hours of the night, using forceful threats to try and collect money, and contacting the debtor’s employer to inform them of any outstanding amounts owing. Fortunately the rights of both the creditors and debtors are now protected by laws in place throughout Canada.
A collection agency is a company that has the right to collect debts on behalf of others for a fee. The fee charged is derived from the amount that they actually recover. Because they do not get paid if no money is collected, some collectors have a reputation of being aggressive to recover the money. If you owe money to a company and have not kept your payments up to date they can turn your file over to a collection agency. You must be notified in writing that your file has been given to a collection agency. Though collection agency behavior is regulated by the government many people still report having a bad experience with collectors. Legally they are not allowed to charge or threaten those that they are trying to collect money from if it has nothing to do with the debt. They are also prohibited from being abusive or speaking with the individual in a way that is considered humiliating or harassing them. Under law, employers may not be contacted without permission unless it is to confirm a person’s employment. They can however try to contact you one time at your place of employment if you are unresponsive or they are unable to reach you at home. Consumers who need to make a complaint against a debt collection agency can contact their provincial or territorial office of consumer affairs.
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