What actions can a collection agency take against me?
collection agency, debt recovery, Manitoba
In Canada, collection agencies must follow strict rules when recovering debts. They can request payment, but can’t harass or share your debt info without consent. If you tell them to stop, they must cease contact. Violations can be reported to provincial consumer protection offices or the Financial Consumer Agency of Canada.
Rules governing collection agencies in Canada for debt recovery.
Question
What can a collection agency do to me?
I know collection agencies can be persistent, but what are their legal rights? What can they actually do to collect money?
From: Anonymous Question, Manitoba (MB)
Debt Insiders Answer
In Canada, when collection agencies try to collect debts, they’ve got rules to follow. Sure, they can reach out to ask for payment, but they have to stick to some guidelines. They can’t call you at all hours, and bullying or leaking your debt info to random folks is a big no no. If you tell them to back off, they have to stop contacting you, although they might still try to get their money back through legal means. And if they don’t play by the rules, you’ve got every right to report them to your provincial consumer protection office or the Financial Consumer Agency of Canada.
From: Insider Scott
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Office of the Superintendent of Bankruptcy (OSB) Answer
Collection agencies in Canada have specific legal rights outlined in various laws and regulations, but their actions are also limited by these frameworks.
Collection agencies can contact you to collect a debt, but they must do so in a way that is not harassing, deceptive, or misleading, as stipulated in the Collection Agencies Act (RSC 1970, c B-3). It is illegal for them to use threats, intimidation, or coercion.
They may report your debt to credit bureaus, which can affect your credit score. Under the regulations of the Act, they must provide accurate and truthful information when reporting.
Collection agencies can initiate legal proceedings against you to recover the owed amount. This process is governed under provincial jurisdiction, and if successful, they can obtain a judgment against you, which may allow them to seize assets or garnish your wages.
They are prohibited from contacting third parties about your debt without your consent, except to confirm your address or contact information.
They must cease communication if you request to stop. This is aligned with the Fair Debt Collection Practices Regulations (SOR/2007-256) which promote fair and transparent practices.
Collection agencies are required to provide you with written notice of the debt and must verify it upon request. This is in accordance with relevant provisions in the Act and regulations governing debt collection practices.
Overall, while collection agencies have certain rights to pursue debts, they are bound by legal obligations that protect consumers from unfair practices.
*From: This answer is provided by scanning the Bankruptcy & Insolvency Act and related directives from the Office of the Superintendent of Bankruptcy (OSB).
Related Questions
Here are the top 5 most frequently asked questions related to what a collection agency can do, based on common concerns and online search trends:
1. How long can a collection agency try to collect on a debt?
A collection agency can try to collect on a debt forever, but they can only pursue legal action within the statute of limitations, which varies by province (typically 2 to 6 years).
2. Can a collection agency contact my family or employer?
A collection agency can only contact your family or employer to confirm your contact details or if they have guaranteed the debt, and they must follow specific rules regarding workplace contacts.
3. What are the rules for when and how a collection agency can contact me?
Collection agencies cannot contact you before 7 a.m. or after 9 p.m., on Sundays (except between 1 p.m. and 5 p.m.), or on holidays, and they are limited in the frequency of contacts.
4. Can a collection agency add extra fees to my debt?
Collection agencies can only add legal fees and fees for non-sufficient funds to the amount you owe, and not any other collection-related costs].
5. What if a collection agency is harassing or threatening me?
You can file a complaint with the Financial Consumer Agency of Canada or your provincial consumer affairs office if a collection agency is harassing or threatening you, as they are prohibited from using threatening, profane, intimidating, or abusive language.
If you have a question about debt see our debt questions or ask your own debt related question.
References
Title, Source |
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Consumer Protection on Debt Collection, Government of Canada |
Understanding Debt Collection in Canada, Canadian Association of insolvency and Restructuring Professionals |
Rights and Obligations of Collection Agencies, Debt Insiders |
Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3), Government of Canada |
Table of article references
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High cost of gas, high cost of groceries, high lending rates, low salary - being in debt is not your fault! See if you qualify for government debt programs and get out of debt today!