Financial Fridays: Collection Agencies – What Consumers Need to Know

Behind in your payments? Do you have debt collectors calling? It’s important to know your rights.

Businesses hire collection agencies to collect money that is owed but there are clear rules they have to follow.
Protecting Yourself:
When a collection agency first contacts you, they must send you written notice which includes their name and their authority to collect payment from you, the name of the person or business to whom the debt is owed (the creditor) and the amount they say you owe. A collection agency must wait six days after mailing the notice before calling you and must give you notice if they intend to advise the creditor to take legal action against you. Once the agency has spoken with you, they cannot contact you (including voice mail or e-mail) more than three times in a seven day period unless you agree to more frequent communication.
Collection agencies are prohibited from calling:
– Before 7 a.m. or after 9 p.m., Monday through Saturday.
– On Sunday, expect between 1 p.m. and 5 p.m.
– On a holiday.
Collection agencies cannot:
– Use threatening or profane language.
– Use undue or unreasonable pressure.
– Continue to contact you if you have told them you are not the person they are looking for (unless they take reasonable steps to ensure you are that person).
– Give false or misleading information to anyone.
*If a collection agency violates any of these standards, it is recommended that you send them a written complaint by registered mail.
Getting Out of Debt:
It’s important to take current debts seriously. Ignoring a collection agency’s attempts to contact you will not help solve your problems and can have detrimental effects on your credit rating.
– Repay any debt that has gone to a collection agency as soon as possible. Negotiate a payment schedule that you can manage and stick with it. Make sure the payment agreement is put in writing.
– If you need to borrow to pay off your debts, look for the least costly way. Compare rates between credit cards and personal loans.
– Never send cash and always get a receipt when you make a payment. Be sure to keep your receipts or cancelled cheques.
– If you have a lot of debts, you may wish to consider financial counselling or speaking with your financial institution.
– You can also call the Ontario Association of Credit Counselling Services. Their members offer debt management services to help you solve your financial problems. To find an office close to you, call 1-888-746-3328.
Collection agencies are the most common complaint at the Ministry of Consumer Services. Most complaints relate to agencies that make harassing or rude calls. If you would like to file a complaint about a collection agency with the Ministry of Consumer Services, visit or call 416-326-8800 or toll free at 1-800-889-9768.
Information Credit:  Ministry of Consumer Services