Consumer credit laws 

There are a lot of laws out there that can benefit you. Although you may not be aware of them, the laws are in place to protect you.

  • There is a law that requires collectors to clearly identify themselves when they contact you.
  • A collector may contact you by mail, telephone, or fax. However, a debt collector may not contact you at unreasonable times or places, such as early in the morning or late at night. Check your provincial laws to see what time frames apply.
  • A collector may contact you at work unless you have told tell them not to. All communication with your creditors and their collectors should be done in writing, remembering of course to keep copies of all your correspondence.Your employer may be contacted by the creditor or collector only to determine your employment status and pay periods.
  • At no time is the collector allowed to discuss your financial situation with anyone other than those signed on the debt, or those that you have given written permission to deal with your financial affairs.


Legislation regulating collection agencies

British Columbia - Debt Collection Act
Alberta - Collection Practices Act
Saskatchewan  - Collection Agents Act
Manitoba - Consumer protection Act
Ontario - Collection Agencies Act and Debt Collectors Act
Quebec  - Act Respecting the Collection of Certain Debts
New Brunswick - Collection Agencies Act
Nova Scotia - Collection Agencies Act 
Prince Edward Island - Collection Agencies Act
Newfoundland - Collections Act

If you have a credit card debt or owe money on a personal loan, a mortgage or any other type of loan then you are referred to as a “debtor”. In Canada there is a reported $210 billion dollars in outstanding consumer debt, not including mortgages. There are 44.1 million Visa and MasterCards in Canada alone. 46% of those cards carry a balance.

If you were to fall behind in repaying your creditors, do you know what your rights are? Do you know what to do if an error is made on your accounts?

In Canada we have laws to protect us when faced with financial difficulty. I believe knowing your rights as a debtor may be one of the most important things you will learn with the help of Margaret's, Canadian credit counsellor, columns.

What debts are covered?

All consumer debts including secured and unsecured debts such as mortgages, car loans and household debts are covered under the legislation in Canada.

Who is a debt collector or what is a collection agency?

There are two types of debt collectors:

  • First party collectors work directly for the creditor that you owe the money to. 
  • Third partycCollectors (also known as agency collectors) work for the agency the debt has been assigned to for collection. 

Agency collectors are usually paid on a commission basis – the more money they collect the more money they make. This may account for the reason some of them are very aggressive. The Provincial Government licenses all collection agencies and licenses are required for each province in which the collector is collecting money. If you are concerned that an unlicensed collector or agency is contacting you phone the Provincial Government office in your area to ask if they are licensed.

Can you stop a debt collector from contacting you?

If you have a lawyer, the debt collector must contact the lawyer. If you are working with a Licensed Qualified Credit Counsellor tell the collector which counsellor you are working with and advise them to contact the counsellor directly. You can stop a collector from contacting you by telephone by advising the collector and the collection agency in writing (make sure to keep proof of any correspondence) that you will not accept calls and the only method of correspondence must be in writing.

Can a collector contact my family, friends and my employer?

Family, friends and co-workers are under no obligation to co-operate with a collector and are protected from unreasonable collection practices under the Provincial Laws. The collector must be courteous at all times. The use of fax, voicemail or email in a manner that is calculated to embarrass, humiliate or alarm a debtor is considered an objectionable practice.

What happens if I believe that I don’t owe the money?

A collector may not contact you if you send them in writing a letter stating you do not owe the money. However, the collector can renew collection activities if you are sent proof of the debt.