Debt Collection


If you don’t pay money you owe, you could become involved in the debt collection process.  You can expect to hear from the person, business or institution you owe money to many times?

Important! On top of the rules explained in this article, collection agencies must follow another set of rules.

Confidentiality of the Collection Process

Communicating With People Around You

A person or company trying to collect a debt has the right to communicate with a person around you (spouse, family members, friends, neighbours, employer, etc.) in two types of situations only:

  • to reach a person who agreed to pay for you if you didn’t pay (called a “surety” or “guarantor”)
  • to find out your address or telephone number (only once).

Banks, Trust and Loan Companies, Insurance Companies and Retail Associations

These businesses can only communicate with people around you if you have given them written permission (possibly in the fine print on the contract that led to the debt!).

Calls at Your Place of Work

A person or company trying to collect a debt from you can only call you at work in these situations:

  • It does not have your home address or home telephone number.
  • It has tried and failed to contact you at home.
  • You gave it authorization to contact you at work.

Banks, Trust and Loan Companies, Insurance Companies and Retail Associations

These financial institutions have the right to call you at work only in one of these situations:

  • They don’t have your home telephone number.
  • They have already tried to reach you at home without success.
  • You have given them permission to call you at work.

These financial institutions can also contact your employer to confirm that you’re employed, your position and your work address.

To get any other information from your employer or to contact any other person around you, they must have your written permission.

Pressure Tactics and Practices Not Allowed

  • making you believe that you could be charged and arrested because you owe money
  • lying or misleading you in any way to try to collect the amount you owe
  • using a document that looks like a court order or a document issued by the government or a government agency
  • giving information to someone that could harm you or your spouse, a member of your family or your surety (person guaranteeing a debt)
  • communicating with you in any way if you have asked in writing that the person communicate with your lawyer
  • communicating with you other than in writing if you have indicated in writing that you are challenging the claim that money is owed and that the creditor should take legal action. However, if the debt is owed to a government or government department, the creditor has the right to communicate with you up to 120 days following the sending of a demand for payment, even if legal action is taken in the meantime.
  • communicate with you verbally when you have indicated from the outset that you’re not the person who owes the money
  • recover the amount from a person other than you or your surety
  • harass, threaten or intimidate you

Banks, Trust and Loan Companies, Insurance Companies and Retail Associations

These institutions must follow very similar rules when they communicate with you or those around you about the collection of money. None of these institutions has the right to do any of these things:

  • give, directly or indirectly, false or misleading information or misrepresent the purpose of the communication.
  • communicate with you other than in writing, if you have made a written request by registered mail and provided your mailing address
  • communicate with you if you have made a written request that the institution contact your lawyer and you have provided a telephone number and an address for the lawyer
  • communicate with you if you have notified the institution by registered mail that you are challenging the claim of money owed and that you intend to take the matter before a dispute resolution body or that you are prepared for the institution to take the matter to court
  • communicate with you or anyone around you with a frequency that constitutes harassment;
  • use threatening, profane, intimidating or coercive language
  • use undue, excessive or unreasonable pressure
  • make public or threaten to make public the fact that you have not paid the money they are claiming from you

Collection Fees

Banks, Trust and Loan Companies, Insurance Companies and Retail Associations

These businesses can claim certain expenses, in addition to the money owed and interest on the money owed, if they are reasonable:

  • legal costs required to collect or attempt to collect the debt
  • the costs to seize, sell or protect an object given to guarantee the debt
  • penalties for payments not honoured (e.g., a “bounced” cheque)

If you gave your cell phone number to the financial institution, it can make you pay the communication fees it paid to collect the money you owe.

Any Other Person or Business

Any other person or business that tries to collect a debt can only claim the amount of the debt and the interest owing once the debt became due.  Note that when a contract is made with a merchant, the contract from which the debt arises must provide for interest for it to be claimed.

Therefore, no one can claim “collection costs”, “file closure fees” or a “percentage” because they gave you a longer time to make the payment.

To Learn More or File a Complaint

Banks, Some Trust and Loan Companies, Some Insurance Companies and Retail Associations:

The complaint procedure: Financial Consumer Agency of Canada.

Quebec-based insurance companies and credit unions (caisses)

The complaint procedure: Autorité des marchés financiers (AMF)

Other People or Businesses:

Office de la protection du consommateur (consumer protection bureau)