Prohibited Collection Practices In Canada

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In the month of May in 2001 the Provincial, Federal, and Territorial Ministers Responsible for Consumer Affairs ratified a harmonization initiative that will enable all territories and provinces to employ a common list of forbidden debt collection practices. This steady approach to the practice of collection by companies, that are now often doing business in several jurisdictions, will ensure clarity for the industry, consumers and regulators. The practices discussed included such issues as disclosure, using excessive pressure, and privacy. In April of 2003, the CMC Working Group on collection agencies came upon a agreement of revision to the prepared list.


Harassment Of The Debtor

No collection agency, agent or company shall attempt to contact or make contact with the debtor or with any member of the debtor's household or family, any neighbor, relative, friend or acquaintance of the debtor, or the debtor's employer, by any means in such a way or with such frequency as to constitute harassment. This includes the use of threatening, coercive, intimidating or profane language. The use of undue, unreasonable or excessive pressure. Also, the use of publishing or threatening to publish the failure to pay by the debtor.



Who May Be Contacted

Except for the sole purpose of finding the phone number or location of the address of the debtor, no collection agency, agent or company shall attempt to contact or contact any member of the debtor's household or family, or any neighbor, relative, acquaintance, or friend of the debtor unless the person contacted has guaranteed to pay the debt and is being contacted in respect of that guarantee, or the debtor has requested the collection agency or agent to discuss the debt with that particular person. A collection agency, agent or company may contact a debtor's employer on a single occasion only and then only for the purpose of confirming the debtor's employment, business title and business address, unless otherwise authorized in writing by the debtor.



Location Of Where A Debtor May Be Contacted

Subject to subsection two, a collection agency, agent or company may not contact a debtor at the debtor's place of employment unless they don't have the phone number or home address for the debtor, in which case verbal contact at the debtor's place of employment, for the sole purpose of requesting the debtor's home phone number or address, is permitted.


Attempts by the collection agency, agent or company to contact the debtor at their home phone number that have not resulted in contact with the debtor, in which case a single verbal attempt to contact the debtor at their place of employment is allowed.

A collection agency, agent or company may contact the debtor at the debtor's place of employment if the debtor has authorized them to do so..



Time Of Calls To The Debtor

Except on the request of the person being contacted, no collection agency, agent or company shall make a personal call or phone call to the debtor, any member of the debtor's household or family, any neighbor, friend, relative or acquaintance of the debtor, or the debtor's employer or surety on a Sunday, other than between the hours of one in the afternoon and five at night, on a statutory holiday or on any other day except between the hours of seven AM and nine PM, local time for the person being contacted.


Cost Of Communication To The Debtor

No collection agency, agent or company may attempt to communicate or communicate with a person for the purpose of negotiating, demanding payment, or collecting of a debt by a means that enables the costs or charges of the communication to be payable by that person..



Threatening Action For Which There Is No Lawful Authority

No collection agency, agent or company shall indirectly or directly threaten or state an intention to proceed with any legal action for which they don't have the written authority of the creditor or for which there is no lawful authority.



Providing False And Misleading Information

No collection agency, agent or company shall give, indirectly or directly, by implication or otherwise, any misleading or false information or misrepresent the purpose of a communication with any person, or the identity of the collection agency, agent and creditor.



Disclosure

No collection agency, agent or company shall try to collect payment of a debt from a debtor until the debtor has been notified by means of a private written communication, or there has been a reasonable attempt to notify the debtor by means of a private written communication, with the balance owed on the account, and with the name of the creditor with whom the debt was incurred, and the authority and identity of the person making the demand in respect of the collection of the debt.


No collection agency, agent or company shall attempt to communicate or communicate with a debtor, by any means, with respect to the collection of a debt without indicating the balance owing on the account, the name of the creditor with whom the debt was incurred, and the collection agency's, agent or company's registered name and authority to make the demand.

No collection agency, agent or company shall commence or continue an action for the recovery of a debt in the name of the collection agency as plaintiff unless such debt has been assigned to the collection agency in good faith by written instrument for valuable consideration and notice of such assignment has been given to the debtor.

No collection agency, agent or company shall commence a legal proceeding where there has been an assignment with respect to the collection of a debt, or recommend to a creditor that a legal proceeding be commenced, unless the collection agency, agent or company first gives notice to the debtor that the collection agency or the collector intends to commence the proceeding or recommend that a proceeding be commenced.

A collection agency, agent or company may not initiate any verbal contact with a debtor until five days after the written communication mentioned has been sent to the debtor.

Where upon being contacted by a collection agency, company or agent, a debtor states he or she has not received the written communication required, the collection agency, company or agent shall send the information required to the debtor at an address provided by the debtor.



Collecting More Than Is Owed

Not with standing any agreement to the contrary between a debtor and a creditor, any charges made or incurred by a collection agency or incurred or made by a creditor in employing a collection agency or agent to collect the debt shall be deemed not to be a part of the amount owing by the debtor and shall not be recoverable by the creditor or by the collection agency or agent acting on behalf of the creditor..



No Waiving Of Rights

Any waiver or release given of the rights, protection or benefits provided pursuant to the regulations or Act is void..



Money Is Owing

No collection agency shall collect or attempt to collect money from a person who is not liable for the debt, or where the person has informed the collection agency, agent or company that the person is not the debtor, continue to communicate with that person unless the collection agency, agent or company first takes all reasonable precautions to ensure that the person is in fact the debtor.



How To Contact

No collection agency, agent or company shall continue to communicate with a debtor other than in writing, when the debtor has notified them in writing to communicate in writing only and has provided an address at which the debtor may be contacted.

No collection agency, agent or company shall continue to communicate with a debtor other than through the debtor's legal advisor when the debtor has notified the collection agency in writing to communicate only with the debtor's legal advisor and has provided an address for the legal advisor.

No collection agency, agent or company shall continue to communicate with a debtor when the debtor has notified the creditor and the collection agency or agent by registered mail that the debt is in dispute and that the debtor would like the creditor to take the matter to court.

Misrepresentation - Official Documents

No collection agency, company or agent shall use, without lawful authority, any notice, summons, demand, or other document that implies or suggests a connection with any court outside or within Canada.

Please note that the above information may also be found at the Office Of Consumer Affairs (OCA) in Canada.

You may also want to read Statute Of Limitations on debt in Canada

Although all information has been written in good faith and reviewed, please email us at [email protected] to report any inaccuracies.