A debt collection agency may be called by either a lender or creditor and is generally hired to contact borrowers to get them to begin paying their loans once they have defaulted on them for too long. A collection agency will most often call frequently and send numerous letters to you in an attempt to get you to pay your delinquent debts. They will usually threaten your creditors with court action if they are not able to collect on the outstanding debt. There are some things you can do to stop this collection calls and letters. In addition, there are also some things you should do if you receive one or more letters.
The Consumer Credit Act does regulate the relationship between you and your debt collection agency. However, this act does not define how the collection agency should conduct its business. The information contained in this article is deemed reliable but not guaranteed to be correct. Please refer to your provincial consumer affairs office for any clarification.
The Consumer Credit Act regulates how debt collection calls are answered, and what constitutes a “confrontation”. The CROA states that the collection agency may not contact you through an answering machine, telephone, or other electronic means. However, the CROA does not restrict the amount of communication that the agency has with you. So long as the collection calls are consistent with the CROA, the agency may continue to contact you by mail or by any other reasonable method. In addition, the province consumer protection office has advised collection agencies to direct all communication towards the individuals who can actually make decisions regarding the debt.
A debt collection agency may not use profane language or include threats in their communications with you. Additionally, if you agree in writing to accept debt collection calls from the collection agency then you are legally bound to take those calls as directed. If you attempt to exercise control over the calls you will become legally liable for those calls if you do not tell the debt collection agency that you do not agree to take calls from them. You may also be held liable for false or misleading information contained in those calls.
In addition, if you have agreed in writing to stop collection calls made to a specific creditor, then the creditor is legally obligated not to contact you unless it is to advise you that they have received your account information and wish to contact you about those debts. If you neglect to respond then that creditor has every right to contact you again. However, once you agree in writing to stop collection calls to a creditor the creditor is not allowed to contact you again for a specific amount of time. This is also true if you enter into a debt agreement. If you neglect to honor this agreement then the creditor may proceed to pursue collection on your outstanding debts.
The debt collection agency must also abide by any written agreement entered between you and the creditor. If you fail to honor an agreement you may be subjected to legal action from the creditor. The legal fees and other costs incurred during such an ordeal can add up to hundreds of thousands of dollars. In some cases a collection debt collector may sue you in civil court.
Collection agencies do not operate only in the province of Alberta. There are agencies operating in every province in Canada. The collection agencies are established in each of the provinces but their territories vary. For example, in Alberta a collection agency must operate within the province but the territories of British Columbia, Ontario, Quebec and New Brunswick include the entire province but not the territories of Nova Scotia and Prince Edward Island.
In addition, in some provinces a collection agency can only operate during the hours of business in that province. For example, in New Brunswick, a collection agency cannot operate during provincial business hours unless they have been specifically licensed to do so. As with all provinces there are rules governing the activities of the collection agencies. These rules are enforced through a system of licensing.