There are definite rules that collection agencies in Canada need to follow. Collection agents cannot call you all hours of the day and night. Anyone collecting a debt must prove you owe the debt. While those are the basics, here are the answers to common questions you may have when receiving collection calls. Some provincial rules may vary slightly, so always check with your provincial regulator if you are unsure.

If you want to know more about handling the calls and talking to a collection agent, read our tips on dealing with collection agencies.

Table of Contents

Calls and contact – when, how often, who, what can they say

What times can a collection agent call me?

Most provincial rules say that a debt collector can only call you between 7 AM and 9 PM Monday through Saturday and Sundays from 1 PM to 5 PM. Weekday hours in some provinces are extended to 10 PM.

Debt collectors are not allowed to make phone calls on statutory holidays.

How often can a debt collection call me?

Not all provinces have specific rules regarding the number of times a collection agency can contact you. In Ontario, agents can only email, leave a voicemail or speak with you a maximum of 3 times a week after they have initially spoken with you. If you have never answered, however, this rule does not come into play. This is why, if you have an account in collection, you may experience a Robo-dialer calling you every day at different hours of the day.

There are also rules against undue harassment. If you feel the frequency of calls is excessive, you can file a complaint. We’ve provided the contact information on where to file a complaint at the end of this guide.

Can a collection agent call my cell phone?

You have the right to ask a collection agency to stop using any form of communication that requires you to incur costs. Because cell phones come with usage and data costs, you can demand that they no longer call your cell phone number. A collection agency is also required to reimburse you for any costs you incur if you ask.

Can I ignore collection calls?

No law states you must answer or talk with a debt collector. You are free to ignore the call or hang up. However, neither the debt nor the calls will go away on their own.

It is best if you deal with collection agents in a forthright and professional manner. If the debt is not yours, tell them that. If you can’t afford to pay or the debt is too old (see legal actions below), give them a simple explanation and say you will not be paying.

If your debt is large, or you have other debts you cannot afford to pay, you may want to review your debt relief options to eliminate debt.

Can a collection agent call my employer?

A debt collector can contact your employer to confirm your employment, get your telephone number or address or enforce a wage garnishment.

When contacting your employer, a collection agent is not allowed to discuss any personal details regarding your debt.

Can a collection agent call my friends & family?

Generally, collection agencies can only contact someone you know to obtain your phone number and address. They must not reveal any information about the name of the debt collection agency or your debt. Again, be aware of the harassment rules if they are phoning someone you know multiple times.

The only exception is if someone has co-signed or guaranteed your loan. A collector may call them if the agreement you signed with your original creditor provides that permission.

Can a collection agent come to your house?

In theory, yes, this can be a form of contact. However, agents are typically paid a commission, so they rarely spend the time necessary to make a “house call”. Robocalls are cheap, so they are the preferred contact method.

An exception may be finance companies collecting a larger debt and a creditor who may have a lien on your household furniture. If you fall behind on secured payments, a creditor or their designated collection agent can come to your home or workplace to seize property.

Can a collector set a deadline for payment?

If the collector offers you a settlement, they can provide a reasonable timeline for you to accept their offer. Collectors cannot, however, use excessive or unreasonable pressure to get you to make a payment.

Collectors often like to say something like “If you don’t make a payment this week, we will garnish your wages.” An action like that takes time, including providing you with written notice and a trip to court.

A new tactic is for bill collectors to threaten you with an involuntary bankruptcy. Again, this is rare in the case of personal debts. Debt collectors generally use these tactics as threats only. Do not let a collection agent pressure you into a bad settlement agreement or action you do not want to take.

Can two collection agencies call me for the same debt?

No. A debt can only be placed with one debt collection agency at a time. You may receive a call from more than one agent at that agency, however. Confirm the name of both the agency and the agent before discussing your situation. Obtain proof that they are authorized to collect on the debt before making any payment. If you are unsure, contact your original creditor.

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Payments

How much can debt collectors ask for?

Collection agencies step into the shoes of the original creditor when collecting a debt. It does not matter whether they are working on behalf of your creditor or they have purchased your debt. Their rights to collect are no more than is allowed in the contract or agreement you signed. They can only collect as much as the original creditor could collect.

Can a collection agency charge interest?

The collection agency can charge interest only under the terms allowed by your original creditor. They cannot raise rates beyond what is allowed in your contract.

Can the debt collection agency charge me a collection fee?

A debt collector cannot charge you for collection costs, including legal costs, unless such a clause was in your agreement with your creditor, or they get a court order. If you make a payment arrangement with the debt collector, they may charge a fee for bounced cheques; however, this fee must be previously disclosed and reasonable.

Can the collection agent settle for less than the full debt?

Only if they have authorization from the original creditor to do so.

Before you enter into a settlement agreement, do two things: get the agreement in writing and ensure they have authorization from the creditor to erase your entire debt for a paid settlement amount.

Should I pay my creditor or collection agency?

This depends. If the debt was sold, no. The collection agency now owns the debt, and you can only make payment to them. Even if the collection agency is working on behalf of your creditor, we generally recommend making payment arrangements through the authorized collection agent to avoid confusion.

Legal actions

How long can a collection agency collect debt in Canada?

There are no time limits to how long a collection agency can contact you to request payment. There is, however, a limitation period during which they call to pursue legal action to enforce payment. In Ontario, for example, a debt is considered too old two years from the date of the last activity. This means that while a collection agency can call you for a 10-year-old debt, they cannot, for example, obtain a wage garnishment for this debt.

Can a collection agency take me to court?

A collection agency could sue you if the original creditor had the right to do so. However, this takes time and money, so an agency is unlikely to take you to court for a small debt.

If the debt is beyond the statute of limitations, you can also defend the lawsuit by saying that the debt is beyond the statute of limitations for your province.

Can a debt collector send me to jail?

No. This is a common threat that collectors might use. You cannot go to jail for an unpaid debt in Canada. If your debt collector threatens you with this, file a complaint.

If the debt arises out of fraud, your creditor or collection agent may decide to have you charged criminally if they feel this is warranted.

What is the minimum amount a collection agency will sue you for?

While there is no hard-written rule, most agencies will not pursue legal action for debts under $3,000. They must also believe you have sufficient income to be able to pay and will not likely sue you for a debt that is past the limitation period (although they may threaten to do so). The agency must have sufficient documentation to satisfy the court that the debt is valid, and that they have the right to collect.

Can a collection agency freeze my bank account?

If your original creditor had the right to ask the court for an order to freeze your bank account, your collection agency has this right as well. Whether they will or not depends on the size of the debt since this involves going to court. If the debt is old, the limitations period applies to stop this type of action as well.

Can a collection agency garnish my wages?

A collection agency can apply to the court for an order to garnish your wages the same as your creditor. They must first obtain a judgement order from the court before asking for an order to garnish your wages. If the debt is small or old, the collection agency is unlikely to take this action as it involves legal fees.

Can a debt collection agency garnish pension income?

No. While the Wages Act allows for the garnishment of wages, the pensions act in most provinces does not have such a provision. In other words, there is no law permitting a creditor, or their legal designate, to garnish pension income. The only exception to this rule is the CRA, who can garnish CPP, child tax credits or other government payments if you have not paid taxes.

Can a collection agency repossess my property?

Creditors can take action to seize your property without the need of a judgement for secured debts. A landlord also has the right to seize property for unpaid rent. If a collection agency is collecting on behalf of a secured creditor, they can take action to repossess property related to the loan.

That means they can repossess your vehicle if collecting on a car loan, or take back household goods like a furniture or tv if your loan or lease agreement allows. You will be notified of such action.

Can a collection agency take my RRSP?

Whether creditors can access your retirement savings depends on where those savings are.

Creditors cannot seize Registered Pension Plans (RPP) except if your debt is owed to the Canada Revenue Agency.

The Bankruptcy & Insolvency Act protects RRSPs in the event of bankruptcy, except for contributions made in the last 12 months. If you have not filed for bankruptcy, you do not receive this creditor protection.

Some provinces have specific legislation protecting some registered plans outside of bankruptcy. This area is sufficiently complicated that you should discuss the situation with a Licensed Insolvency Trustee.

Can a debt collector take my CERB or CRB benefits?

The new Canada Recovery Benefit (CRB) (previously CERB or Canada Emergency Response Benefit) provides income support to individuals who have lost income due to COVID-19.

Under current legislation, Canada recovery benefits are protected from creditor actions. They cannot be assigned as security for a loan and cannot be garnished or seized by any creditor, including the Canada Revenue Agency.

Credit reports

Do collection agencies report to the credit bureau?

Your original creditor will report your debt activity to the credit bureau, including any late payments. Once your debt is in collections, the debt will show on your credit report as sent to collections. Some collection agencies will report continuing payments if you go on a payment plan.

Watch for collection agencies falsely reporting a payment to your credit bureau to begin the six-year clock for when negative payment information is removed from your report. If this happens, contact your credit bureau to correct any error on your credit report. You can also file a complaint with both the provincial legislator and your original creditor, assuming the agency is working on their behalf.

How long does an account remain on my credit report?

Accounts in collection have a negative impact on your credit score and remain on your account for six years from the date of your last payment.

Once the account is paid, either the collection agent or original creditor will report the account as paid or settled. As part of your settlement agreement you can ask that the collection agency remove the item from your credit report. Get this in writing as part of your release agreement.

What should you do if you are being pestered by a collection agency?

How to file a complaint with the ministry of government and consumer services

If you feel the collection agency disobeys any of these rules or is harassing or threatening you, you can file a complaint with your provincial consumer affairs office. Here are links to federal and provincial consumer protection legislation resources.

If you believe a collection agency is harassing you, keep a record of the call’s time, date, and frequency. If you decide to make a formal complaint against the collection agency, you will require this information.

Where can I get help with debt problems?

Ignoring collection agent’s attempts to contact you will not help you solve your debt problems. If you do owe money and need help forming a plan to settle that debt, contact a licensed professional for a free, confidential consultation on reducing your debts and stop the calls for good.

It may not be in your best interest to pay the collection agent. If your debts are significant, talk with a trustee before agreeing to anything.