Jan 27, 2011


By Susan Irwin, Executive Director / Lawyer, Rural Legal Services

There are many reasons why people fall behind in their payments, especially in recessionary times, but the debts remain outstanding however good the reason for non-payment. Collection agencies work on a very simple principle; for them to make money, they must collect money from debtors for their clients. To fulfill this need, some collection agencies have gone to great lengths, and caused a lot of grief by harassing the debtor, their families, friends, and even employers.

In an attempt to discourage such practices, the provincial government passed the Collection Agencies Act. Under the Act administered by the Ministry of Consumer Services, the rights of debtors are clearly laid out along with a set of rules governing what collection agents can do, as well as when, and how they can act, when attempting to recover debts. The effectiveness of the legislation may be questioned however, as complaints about collection agencies have topped the Ministry’s list of consumer complaints for the past five years.

If you or someone you know is in the unfortunate position of dealing with a collection agency, knowing the rights of the consumer/debtor is important. Don’t expect the voice on the telephone to explain them and it’s also not a bad idea to be more than a bit suspicious of the information provided by a seemingly “helpful” agent.

Not all of the rules can be summarized in a single column, but if you feel are dealing with an agent who uses profane, intimidating or threatening language, or who seems to be applying excessive or unreasonable pressure to pay (“forget your rent, pay us first, or else”), then it’s likely there has been a breach of the Collection Agencies Act. More specifically, you can’t be called more than three times a week and never on a Sunday or a Holiday, except between the hours of 1 p.m. and 5 p.m. They can’t even begin to call until six days have passed since sending you written notice setting out the name of the person or business claiming that a debt exists, the amount owing, and identifying the collection agency.

The collection agency may not, except to obtain your address or telephone number, contact your spouse, any other member of your family or household, neighbours or your acquaintances. Collection agencies are also limited in their right to contact your employer, generally being limited to one call and that call must be simply to confirm your employment.

If you receive documents that appear to be issued by a Court as an enclosure with a letter from a collection agency demanding payment, it is often worthwhile to have such documents examined by a lawyer as soon as possible. No such claim may have been initiated and income from some sources, including Ontario Works and the Ontario Disability Support Program, are protected from garnishment (seizure under a Court Order) by collection agencies and other creditors.

Of course, the real solution is to make arrangements to pay the money owing. If you are in financial difficulty, it is a good idea to seek out the assistance of a Credit Counseling Agency. A credit counselor can often help you deal with your financial problems and help you to arrange a payment scheme with your creditors. If you live in Northern Frontenac, some assistance in dealing with debt problems is available through Northern Frontenac Community Services at 613-279-3151.

If you need help in dealing with an overly aggressive collection agency, lawyers at Rural Legal Service can also provide information, advice and referrals. If you meet the financial eligibility requirements set out by Legal Aid Ontario, assistance in dealing directly with the collection agency can be available. Once a collection agency is advised that a lawyer is acting on your behalf, it is supposed to deal with you only through your lawyer and the calls are supposed to stop.

Information requests and complaints about collection agencies can also be directed to the Ontario Ministry of Consumer Services at 1-877-665-0622.

 

Legalese is a column of general information and opinion on legal topics by the lawyers of Rural Legal Services, Box 359, Sharbot Lake, ON, K0H2P0, 613-279-3252, or 1-888-777-8916. This column is not intended to provide legal advice. You should contact a lawyer to determine your legal rights and obligations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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