How to Deal with Collection Agencies

Sometimes it’s hard to manage your debt load – especially if there’s been a job loss or an illness and you have fallen behind on your payments.  Once you have missed a few payments, your creditors will likely forward your debt to a collection agency. Your phone starts to ring and a collection agent pressures you to make payments.  Some of the calls may border on harassment. You do have rights, even as a debtor.  And if you feel you’ve been unduly harassed, there is recourse action available to you.

When the collection agency contacts you, ask if they are the original creditor or a debt collection agency.  Then you should ask them for their name, telephone number, the amount of the debt, who you owe it to and when the debt started.  You should also inform the agent you will call them back when you have verified the information.

The key to working with a collection agency is to know your rights and communicate with the agent who calls.  It might be difficult to get them to listen but knowing what to say can make a big difference.  Creditors are allowed to send letters demanding payment. They can also contact you by telephone to try to work out a payment plan.  They cannot, however, call you at all hours of the day.  They can call between 7 a.m. and 9 p.m., Monday to Saturday and on Sundays between 1 p.m. and 5 p.m., but never on a statutory holiday.

Collection agencies can’t continue to call your place of employment after they have confirmed your employment status; nor can they contact your friends or neighbours unless you have given them your consent.  They can’t suggest to your friends, neighbours or relatives that they should pay your debt unless one of them acted as guarantor.  They can’t use language that is threatening or abusive or apply excessive pressure on you to pay.  They also cannot mislead you or give you false information.  You can send the agency a written request asking them to only contact you by mail by.

If you feel harassed and are dealing with a federally regulated financial institution (FRFI) like a bank, or a debt collector acting on behalf of a FRFI, then contact the Financial Consumer Agency of Canada (FCAC) at 1-866-461-3222 (toll-free), or send an e-mail to for more information on how to proceed.  For any other organization like a credit card company or a debt collector acting on their behalf, contact their consumer affairs office for the province where you reside.

If you owe the debt, it’s best to try and negotiate a payment plan with the collector.  If you are not in a position financially to make payments, it might be time to consider reaching out to a credit counselling agency or a bankruptcy trustee who can give you professional advice and also offer you various options.


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