Understanding the Rights of Debt Collectors in Canada 

_{By Bromwich+Smith Staff | 844 words | Reading Time: 4 minutes | Date: 2023/09/14}

Debt collection, Collection callers, repo man, debt reinforcer; however you phrase it the visual is the same. We never think about the person who is continuing to contact us to pay our bills in a pleasant manner. However their role is part of financial transactions, their job is to recover outstanding payments from individuals or businesses who owe money. In Canada, debt collectors must adhere to a set of guidelines and laws that govern their actions, lets look into what those are. 

Debt Collection 

In Canada, there is a piece of legislation titled the "Collection and Debt Settlement Services Act." This legislation outlines the rights and responsibilities of both the debt collectors as well as the individual who owes the debt, and is there to  ensure fair and ethical treatment throughout the debt recovery process. Under this act, debt collectors are required to be licensed and follow specific guidelines when interacting with those who owe money. 

Rights of Debt Collectors 

1. Contacting Clients: Debt collectors have the right to contact an individual to collect the money owed. However, they must do so within reasonable hours and refrain from using aggressive, threatening, or harassing language. 

2. Verification of Debt: The individual has the right to request verification of the debt being collected. Upon receiving such a request, debt collectors must provide written verification, including details of the original creditor and the amount owed. 

3. Access to Information: Debt collectors can access information to locate and communicate with the individual. However, they must not disclose details of the debt to third parties, such as family, friends, or employers. 

4. Negotiation: Debt collectors can negotiate payment plans based on their financial situation. They can propose suitable arrangements that allow the debt to be repaid over a longer period of time. 

5. Legal Action: If all attempts at collection fail, debt collectors have the right to initiate legal proceedings, such as filing a lawsuit, to recover the debt. Legal action, however, must be pursued within the confines of the law and the individuals rights. 

6. Credit Reporting: Debt collectors can report unpaid debts to credit bureaus, which can affect the individuals credit score. This action serves as a motivating factor for debtors to repay their debts promptly. 

7. Ceasing Communication: If an individual makes the request for a debt collector stops communicating with them, the collector must comply. The request must be made in writing, and the collector can only contact them to confirm cessation of communication or to inform them of legal actions both of which must be done in writing. 

8. Compliance with Laws: Debt collectors must abide by federal and provincial laws and regulations. Engaging in unlawful practices, such as misrepresentation or intimidation, can result in penalties and legal action. 

9. Documentation: Debt collectors should keep records of all communications and actions taken during the collection process. These records serve as evidence in case of disputes or legal proceedings. As an individual being contacted, you should also make documentation of all contact made including dates, times, name of agent, debt owed and details of the conversation or promise to pay. 

While debt collectors in Canada have rights that enable them to collect outstanding debts, these rights are not unlimited. There are regulations in place to keep the individual owing the debt safe, and ensure they are spoken to with respect and dignity throughout the process. The Collection and Debt Settlement Services Act establishes a framework that aims to strike a balance between the rights of debt collectors and the rights of debtors. Anyone involved in debt collection, whether as a creditor or a collector, should research their rights and be prepared to stand up for themselves. 

If you are struggling with never ending phone calls and letters brought on from overwhelming debt, call our Debt Relief Specialist team at 1.855.884.9243. You can also request a call back at our contact us page. We’re working with you to rebuild your worth.   

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FAQ Related the Rights of Debt Collectors in Canada:

1. What legislation governs debt collectors' actions in Canada? 

In Canada, debt collectors' actions are governed by the "Collection and Debt Settlement Services Act." 
 
2. What are the rights of debt collectors in Canada regarding contacting debtors?  
 
Debt collectors in Canada have the right to contact debtors, but they must do so within reasonable hours and avoid using aggressive or harassing language. 
 
3. Can debt collectors disclose a debtor's debt to third parties in Canada?  

No, debt collectors in Canada cannot disclose details of the debt to third parties, such as family, friends, or employers. 
 
4. What options do debt collectors have for negotiating payment plans in Canada? 

Debt collectors in Canada can propose suitable payment arrangements based on the debtor's financial situation. 
 
5. What action can debt collectors take if all attempts at collection fail in Canada?  

If all collection attempts fail, debt collectors in Canada have the right to initiate legal proceedings, such as filing a lawsuit, to recover the debt, but they must do so within the confines of the law and the individual's rights.