Collection agency on the phone?

I’m going to assume for the purposes of this column that you owe a debt to a creditor and the debt is significantly overdue. I am also assuming that you are not in a position to pay the whole debt immediately and have been contacted by a representative of a collection agency who is demanding payment on behalf of the creditor.

It is important not to ignore the demand. The legal remedy of the creditor is to sue you, which could result in additional costs as well as giving the creditor the right to garnish wages and seize assets. What should you do?

An important first step is to seek the assistance of a Credit Counselling Agency. It will help you analyze your ability to pay off this debt in the context of your general financial situation including income and ongoing expenses.

As collection agencies are in the business of collecting money for creditors, they are sometimes insistent about payment and less than patient in waiting for you to work out your financial situation and ability to pay. Collection agencies are, however, subject to the Collection Agencies Act, which prohibits them from doing certain things.

The Ministry of Government and Consumer Services advises on its web site that the regulations under the Collection Agencies Act forbid collection agencies from:

• contacting you until six days have passed from sending you written notice of i) the name of the creditor; ii) the balance owing: and iii) the name of the agency and its authority to demand payment;

• continuing to contact you if you did not receive the notice unless a second copy of the written notice is sent to an address provided by you, and then contact may only be made six days after sending notice;

• contacting you if you send a registered letter to the agency saying that you dispute the debt and suggest the matter be taken to court;

• contacting you if you or your lawyer notify the agency by registered mail to communicate only with your lawyer, and you provide the lawyer's name, address and telephone number;

• contacting you on Sunday, except between the hours of 1PM and 5PM, and on a holiday;

• contacting you other than by ordinary mail more than three times in a seven-day period without your consent, once the agency has actually spoken with you;

• using threatening, profane, intimidating or coercive language, or using undue, excessive or unreasonable pressure;

• giving false or misleading information to any person;

• contacting your employer except on one occasion to obtain your employment information, unless your employer has guaranteed the debt, the call is in respect of a court order or wage assignment or if you have provided written authorization to contact your employer;

• contacting your spouse, a member of your family or household, or a relative, neighbour or acquaintance except to obtain your address and telephone number unless the person contacted has guaranteed the debt or you have given permission for the person to be contacted.

If a collection agency is contravening the regulations, you can make a complaint to the Ministry of Government and Consumer Services at 1-800-889-9768. If you have any questions or need assistance, you can also give us a call at the legal clinic.