​Top 6 Questions Asked About Collection Agencies in Canada 

Top 5 Questions Asked about Collection Agencies

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By Rosemarie Gauthier, updated by Browmich+Smith Staff | Reading time: 7 min | 1561 words | Last Update: 2023/07/24

Collection agencies in Canada play a crucial role in recovering outstanding debts on behalf of creditors. For anyone who has struggled with debt, their practices may be questionable. Many Canadians report harassment, privacy breaches, and question the legality of the collection process. It is important to address the top concerns frequently asked about collection agencies in Canada to provide a better understanding of their operations and regulations.  

 1. Are Canadian collection agencies allowed to call every day, several times a day? 

Canadian collection agencies are subject to regulations that govern their communication practices . While there are no legal limit on the number of calls a collection agency can make, there are guidelines in place to prevent harassment. Typically collection agencies are generally prohibited from engaging in harassment or using threatening or abusive language during their communications. This means that repeated calls throughout the day, be considered harassment. The frequency of calls should be reasonable and respectful. Prior to phone calls, an initial written notification is typically sent out. It serves as a way to inform you of the debt and provide an opportunity to dispute it if necessary.  

If you feel that a collection agency's communication practices are becoming harassing or overwhelming, they have the right to request that the agency cease further communication. This can be done by sending a written request asking the agency to stop contact. 

 2. Can collection agencies harass you, your friends, or your family? 

Simply put No, collection agencies in Canada are not allowed to harass you, your friends, or your family members. Collection agencies may contact friends or family members, but only for the purpose of obtaining contact information about how to reach you. They are not permitted to disclose details about the debt or identify themselves as collection agents during these conversations. One exception to this rule is a co-signed loan or debt. In cases where a debt is co-signed, collection agencies may communicate with the co-signer about the debt and seek repayment. Co-signers have a responsibility to fulfill the debt if the primary borrower defaults. 

It's worth noting that while collection agencies have the right to pursue debt recovery, they must do so within the boundaries of the law and with respect for you. If you feel that a collection agency is engaging in improper or harassing behavior, it is crucial to assert your rights and take appropriate steps to address the situation. 

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3. Why are debt collectors calling you? 

You may be receiving calls from collection agencies for various reasons including: 

  1. Unpaid Debts: If you have outstanding debts, such as credit card balances, personal loans, or medical bills, creditors may engage collection agencies to recover the money owed. These agencies are hired on behalf of the original creditor. 

  2. Overdue Bills: Late or missed payments on utility bills, phone bills, rent, or other recurring expenses can result in collection efforts. Service providers or landlords may enlist collection agencies to help collect the overdue amounts. 

  3. Outstanding Loans: If you have taken out a loan, such as a student loan, mortgage, or auto loan, and have fallen behind on payments, the lender may employ collection agencies to recover the outstanding balance. 

4. Can collection agencies contact you at work? 

Collection agencies in Canada have limited circumstances under which they can contact your employer. Generally, they can only do so to verify your employment information or gather information for the purpose of wage garnishment. 

Verification of Employment: Collection agencies may contact your employer to confirm your current employment status, job title, and possibly your income level. This information helps them assess your ability to repay the debt and determine the most appropriate course of action. 

Wage Garnishment: If legal proceedings have been initiated and a court order or judgment has been obtained against you, collection agencies may contact your employer to facilitate wage garnishment. Wage garnishment involves deducting a portion of your wages directly from your paycheck to repay the outstanding debt..

5. Will collection agency calls affect your credit rating? 

Collection agency activities can have a significant impact on your credit rating in Canada. When a debt is turned over to a collection agency, it reflects negatively on your credit report and can lower your credit score. This can stay on your credit report for up to six years from the date of the last activity or payment on the account. This means that even if you pay off the debt or settle it with the collection agency, the record of the account in collections can still remain on your credit report for several years. 

It's important to note that credit reporting practices may have slight variations between provinces and credit reporting agencies.  

6. How can you stop debt collectors from calling? 

If you're looking to prevent or stop debt collectors from calling you, here are some strategies you can consider: 

  1. Understand your rights: Familiarize yourself with your rights. Knowing your rights will help you better handle debt collectors and assert your legal protections. 

  2. Communicate in writing: Send a written request to the debt collection agency, asking them to cease all communication with you. Keep a copy of the letter for your records and send it via certified mail with a return receipt requested to ensure it's received. 

  3. Maintain records: Keep thorough records of any communication you have with debt collectors. This includes notes on phone calls, messages, and any correspondence. Having detailed records will help you if you need to dispute any actions taken by the debt collectors in the future, or for harassment claims. 

  4. Request verification: If you believe the debt is not valid or you're unsure about it, you can request the collection agency to provide verification of the debt. 

  5. Negotiate a payment plan: If the debt is valid and you're unable to pay it in full, you can try negotiating a payment plan with the collection agency. Often, they are willing to work with you to establish a manageable payment schedule. 

  6. Seek advice: If you're facing persistent harassment or are struggling with debt, reaching our to a Licensed Insolvency Trustee may be the right move in order to manage your finances accordingly.  

It is crucial to take necessary steps to address your financial situation and seek professional advice to ensure you are making the right steps to clear up your debt.  Reach out to a Licensed Insolvency Trustee to learn about yourdebt relief options, and how to end overwhelming phone calls from collection agencies today.  

Licensed Insolvency Trustees like those at Bromwich+Smith are available to you to help with overwhelming collection calls. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page.    

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FAQ About Collection Agencies

1: How many times can a collection agency legally call in Canada?

A lot of people are unaware of what is and is not allowed in the collection industry. According to the Government of Canada’s website, a debt collector must first notify you in writing or at least make a reasonable attempt to notify you before they can start calling you. There aren’t any set legal limits on the number of times they can try to reach you – but there are limits with regards to the time of day they may call. 

2: At what times can a collection agency call you?

There are rules about the hours when debt collectors can contact you. They are only able to call you between 7:00 a.m. and 9:00 p.m., Monday through Saturday. Sundays, between 1:00 p.m. and 5:00 p.m. Thankfully, they can't call you in the middle of the night or on statutory holidays. However, if you feel that you are being excessively harassed by collection agencies, you can file a complaint with the Financial Consumer Agency of Canada. 

3: Can debt collectors/collection agencies call you at work?

Yes, Canadian debt collectors can contact your employer. To be clear, they are not allowed to contact your employer for anything other than confirming if you are employed, your phone number, or your address if they are going to proceed with wage garnishment. 

4: Can a collection agency call your friends or family members?

Collection agencies are allowed to contact your friends or family members, but only to obtain contact information on how to reach you. They are not permitted to disclose details about the debt or identify themselves as collection agents during these conversations.

5: How long will an account in collections be on your credit report?

An account in collections can stay on your credit report for up to six years from the date of the last activity or payment on the account, even if you pay off the debt or settle it with the collection agency.

6: How can you stop debt collectors from calling?

To stop debt collectors from calling, you can take the following steps:

Understand your rights and legal protections.
Send a written request to the collection agency asking them to cease communication.
Maintain thorough records of all communication with the agency.
If you're unsure about the debt's validity, request verification from the collection agency.
If the debt is valid but unaffordable, negotiate a payment plan with the agency.
Seek advice from a Licensed Insolvency Trustee to manage your finances effectively and explore debt relief options.

7: How long will this account in collections be on your credit report? 

An account in collections will indeed be on your credit report for six years, but it also depends on which province you are in and which credit report you are looking at: TransUnion or Equifax. 

TransUnion will keep a record for 7 years in the provinces of Ontario, Quebec, New Brunswick and Newfoundland and Labrador. 10 years in Prince Edward Island but with the help of a LIT (Licensed Insolvency Trustee), you can rebuild your credit. 

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Description automatically generatedAuthor: Rosemarie Gauthier and received update by Browmich+Smith Staff
Rosemarie is from Winnipeg, Manitoba and holds a diploma in Digital Marketing from Robertson College. She also has 16 years experience working in the retail banking industry as a Personal Banking Advisor.


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