Do you feel like you are being harassed by a collection agency?
Fortunately, in Ontario there are laws that protect people from being harassed by collection agencies. It is important to be aware of your rights when you are being contacted by a collection agency.
What are collection agencies?
Some creditors hire third party collection agencies to collect money on their behalf. This happens because the creditor has tried unsuccessfully to collect on the overdue account.
Collection agencies perform a valuable service for their clients – the creditor. Unfortunately, this activity has a negative effect on the debtor. Most collection agencies will negotiate with the debtor or a credit counselling agency. There are situations where the collection agency gets too aggressive or uses tactics that are not fair. This is not the policy of most collection agencies or their managers. Often a problem brought to a manager’s attention can be quickly resolved.
Some individuals, through controllable or uncontrollable circumstances, find themselves confronted by a collection agency. When this occurs it is important to realize that a reasonable approach will often lead to reasonable results. An unreasonable approach will lead to an adversarial response and less than positive results.
The collection agency generates their revenue on a commission basis by getting people to pay on accounts that are in arrears. The more money that they can get a client to pay, the more money the collection agency makes. Understanding how a collector is funded allows people to better understand the approach taken when collecting on an account. This, however, is not an excuse for inappropriate practices by a collection agency.
There are laws in place to regulate collection agencies and if an agency does not abide by these laws (which include laws against harassment), they could be fined, or lose their licence. Many people who speak with collectors are unaware of what the rules or laws are that govern these agencies.
What are collection agencies are supposed to do?
- tell you who they are (disclosing the agency’s registered name)
- try/attempt to inform you in writing explaining who they are and who hired them
- ensure that you are the person who they have been contracted to collect on
A collection agency cannot make you pay more than you owe or charge you for their services. You can’t be taken to court by a collection agency; permission to take legal action must be initiated by the creditor and you must be notified ahead of time.
Collectors on the telephone:
Collectors are allowed to call you on the phone but they can’t call collect or send a telegram that you have to pay for. Each time they do call they are required to tell you who they are, who you owe money to, and how much money you owe. They are not allowed to call on a statutory holiday. When they place a call it must be between the hours of 7 am and 9 pm (Sundays between 1pm and 5pm). Calling incessantly or saying harassing things when they are on the phone is not permitted. They are only allowed to contact you 3 times in a 7 day period (including voice mail messages).
Often, a collection agency will demand that the account be immediately paid in full. It is important to realize that reasonable monthly payments will be accepted through negotiation. For further advice contact your local credit counselling service.
A collection agency can only contact your family, friends, and employer in order to ascertain your contact information. (Address and phone number.) They can not ask family or friends for any other information. They are not allowed to provide family or friends with information pertaining to the outstanding debts and they can not under any circumstance give out false information about you that may hurt you or your family. When a collector fails to follow these guidelines it could be considered harassment.
Further information can only be requested by a collector when:
- your wages have been either garnisheed or assigned
- employment is being verified
- the person being contacted has guaranteed your debt
Options available to you if you feel you are being harassed:
When you are considering filing a complaint against a collection agency, it is important to be properly prepared with all of the necessary information. You should ask the collector for the registered name of the collection agency, the full name of the person who is representing that agency, and what their collector identification number is. All of this information, as well as a documented account outlining the conversation(s) pertaining to the alleged harassment, should be written down for future reference.
- A formal complaint can be made through the local Ministry of Consumer and Business Services office. Their phone number is available in the phone book in the Government blue pages. Should an investigation prove that a collector is acting outside of established guidelines, they may have their licence revoked.
- You can contact the Marketplace Standards and Services Branch for more information on collection agencies. 1-800-268-9768
- Information and complaint forms are available on the Ontario Ministry of Consumer and Business Services web site. www.cbs.gov.on.ca
- Contact your local Legal Aid office. 1-800-495-8180
- File a harassment complaint with your local police department. (Sault Ste. Marie 705-949-6300)
For help managing your debt:
In today’s day and age, there is a lot of good information out there if you know where to look. People equate being financially well off with success in our society. Those who are struggling with their finances sometimes feel too embarrassed to ask for help but help is out there. Looking in book stores, libraries, or on the internet can turn up some excellent resources on how to manage your personal finances. Many credit counselling agencies have websites that offer excellent information on money management and provide links to other valuable websites.
You may find assistance through your Community Legal Clinic or by contacting Legal Aid (contact info is above). A local not for profit credit counselling agency will offer you free confidential help (look in your yellow pages under ‘Credit & Debt Counselling’). A not for profit credit counselling service can offer advice as well as debt management programs to help you get back on solid ground.
- Call Credit Counselling Services of Sault Ste. Marie & District at 705-254-1424.
- Contact the Ontario Association of Credit Counselling Services at 1-888-746-3328 or visit their website at www.indebt.org
- Contact Credit Counselling Canada by visiting their web site at www.creditcounsellingcanada.ca.