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Collection agencies

Dealing with collection agencies in Canada

A collection agency is a company hired by a creditor (such as a credit card company) to recover funds that are past due when consumers have not paid their debts. This occurs only after the creditor has made several attempts to collect money that it is owed. If your account is turned over to a collection agency, you must be advised of this in writing.

Ignoring debt problems and leaving debts unpaid can result in court action, which could lead to your wages being garnished (when money is taken from your pay cheques) or other legal action, such as your assets (car, furniture or other property) being seized by the collection agency.

Tips for dealing with collection agencies

If creditors or collection agencies are calling you and you cannot pay the money you owe, the following tips may help you deal with them.

  • An agency is not allowed to collect more than the amount you owe and cannot charge for its costs to collect the debt
  • If you cannot pay the full amount at once, explain your reasons to the collection agency and offer an alternate method of repayment, e.g. you may offer to make a lump-sum payment, or a series of monthly payments
  • Only deal with the collection agency to make repayments
  • Follow up with the agency in writing and, if possible, enclose a payment made in good faith
  • When repaying your debts, do not send cash
  • Always make sure that you obtain a receipt for any payment you make
  • Do not contact the original creditor, as this might create confusion (unless you feel that an error has been made in which case, contact the creditor and the collection agency to have it corrected)


To find out about your rights when dealing with a collection agency, contact your provincial or territorial government, which oversees collection agencies and may have regulations that restrict their activities. Here are some sample questions you should ask:

  • How often can they call?
  • When are collection agencies allowed to contact consumers?
  • Are they allowed to threaten or verbally abuse you?
  • Can they call you at work, or on the weekend, or late in the evening?
  • Are they allowed to telephone your friends or relatives, or your employer?

If you have a complaint, or feel you have been treated unfairly by a collection agency, contact the head of the collection agency, the agency’s ombudsman, the financial institution where you borrowed money, or your provincial or territorial regulator. The Financial Consumer Agency of Canada (FCAC) can help you determine whom to contact.

For more information:

The Financial Consumer Agency of Canada (FCAC) provides timely, objective information to help consumers choose the best banking products and services for their needs. The FCAC also informs Canadians of their rights and responsibilities when dealing with financial institutions, and ensures that banks and federally regulated trust, loan and insurance companies respect the laws and agreements that protect consumers.

If you are still feeling financial stress, BDO can help you resolve your debt problems. We can stop the harassing calls and legal action by negotiating a settlement with creditors through a consumer proposal or filing for bankruptcy. Talk to us today


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