Debt Collection Laws of Canada

Both federal and provincial laws regulate the conduct of debt collectors to ensure that debtors are treated fairly and respectfully.

Things Canadian Debt Collectors Can’t Do

1. Harassment: Debt collectors are not allowed to use threatening, profane, intimidating, or coercive language. They are also prohibited from using excessive or unreasonable pressure or from acting in a manner that could be considered harassment.
2. Misrepresentation: Debt collectors cannot mislead debtors about the amount owed, the nature of the debt, or the consequences of not paying the debt. They are also not allowed to misrepresent themselves (e.g., pretending to be a lawyer or a law enforcement officer).
3. Unreasonable Communication: In general, debt collectors cannot contact debtors at unreasonable hours (usually defined as before 7 am or after 9 pm), on holidays, or at times the debtor has indicated are inconvenient.
4. Employer Contact: In most cases, debt collectors cannot contact a debtor’s employer, colleagues, friends, or family members without the debtor’s permission. Exceptions are generally made if they’re trying to verify the debtor’s employment, business title, or business address.
5. Legal Threats: Debt collectors are generally not allowed to threaten legal action unless they have the authority to do so and intend to follow through. Empty threats of legal action are typically considered misleading and deceptive.
6. Continuing to Collect After a Dispute: If a debtor disputes a debt, debt collectors are generally not allowed to continue their collection efforts until the dispute is resolved.
7. Adding Charges: Debt collectors cannot add collection costs to the amount of the original debt, unless the original contract that created the debt allows for this, or they are permitted by law to do so.

In Canada, debt collection is governed by both federal and provincial legislation. The primary pieces of legislation that apply to debt collection across the country include the Bank Act at the federal level, and each province has its own specific legislation that governs debt collection practices.

Debt Collection Laws

1. Federal Legislation:
   • Bank Act: This act governs banks and authorizes them to operate in Canada. It includes provisions related to credit agreements and the treatment of debtors.
2. Provincial Legislation:Each province and territory has its own legislation regarding debt collection, here are a few examples:
   • Ontario: Collection and Debt Settlement Services Act. This legislation stipulates that a collection agency must be registered and it sets out the rules that collection agencies must follow.
   • British Columbia: Business Practices and Consumer Protection Act and the Debt Collection and Repayment Regulation. These laws provide consumers with certain protections when dealing with both creditors and collection agencies.
   • Alberta: Fair Trading Act and Collection and Debt Repayment Practices Regulation. These laws establish a licensing regime for collection agencies and set out rules that they must follow.
   • Quebec: An Act respecting the collection of certain debts. This sets out the rules and requirements for those involved in the recovery of certain debts.

The specific provisions of these laws vary, but generally, they include rules related to:

• Licensing requirements for collection agencies.
• How and when a debtor can be contacted.
• Prohibitions on abusive or deceptive practices.
• Requirements to provide notice or verification of a debt.
• Procedures for disputing a debt.

In addition to this legislation, the Office of Consumer Affairs, which is part of Innovation, Science, and Economic Development Canada, provides information and resources on dealing with debt collectors.

These laws are subject to change and amendments from time to time by the respective legislative body in each province, and it is always advisable to refer to the most recent version of the law or consult with a legal expert. As regulations vary by province, always check the specific laws applicable to your province or territory.

Top Collection Agencies in Canada

Following are some of the well-known and reputable debt collection agencies in Canada:

1. MetCredit: Operating since 1973, MetCredit provides debt recovery services across Canada.
2. CBV Collection Services Ltd.: This agency has been in operation since 1921 and is one of Canada’s oldest and largest providers of collection services.
3. EOS Canada: EOS Canada is part of the EOS Group, one of the leading international providers of customized financial services.
4. A-1 Credit Recovery & Collection Services Inc.: A-1 Credit Recovery & Collection Services Inc. offers comprehensive business solutions, including debt collection and recovery.
5. Gatestone & Co. International Inc.: Gatestone has been in business for over 90 years and offers a range of services from collections to call center services.
6. iQor Canada Ltd.: iQor provides business process outsourcing and product support services, including debt recovery.
7. Stellar Recovery: Stellar Recovery is an international agency with offices in Canada. They offer a full suite of recovery services.
8. Total Credit Recovery (TCR): TCR is one of the largest debt recovery firms in Canada and has been in business since 1977.
9. Collect Com Credit (CCC): CCC is a collections agency that operates in all provinces and territories in Canada.
10. General Credit Services Inc. (General CSI): General CSI is a Canadian-based, full-service accounts receivable and debt recovery management firm.

Each of these agencies has a slightly different focus and different strengths, and they all operate within the legal frameworks provided by Canadian law. Remember always to do your own research when choosing a debt collection agency to work with, to ensure the agency is reputable, treats debtors fairly, and complies with all applicable laws and regulations.