Unreasonable collection practices
At Solutions™ we receive hundreds of calls a year from people that have been on the receiving end of nasty collection calls. These callers all want to know the same thing – can the collector really do what they claim they can?
You may or may not be aware that each province has its own legislation regulating collection agencies and their collection practices. It is important for you to check your provincial laws to get the full details of your situation.
Some debt collectors will say almost anything to get the account paid, so it is important for you to know your rights if you are experiencing financial difficulty. Having said that, it is also important for you to know your responsibilities. Keep in mind that the creditor loaned you the money in good faith and has a right to expect to be repaid.
Debt Collection Act
A person must not exert undue, excessive, or unreasonable pressure on a debtor or a member of the debtors family or household or the debtor’s employer in:
- collecting, negotiating, or demanding payment of a debt;
- repossessing, seizing, or distraining on any chattel, or
- evicting a person from property”.
Undue, excessive or unreasonable is defined as follows:
- Make a threat, charge, or promise that does not pertain to the collection of the debt – they cannot threaten you in any way.
- Except for the purpose of verifying your employment, the collector can not communicate with your employer without your consent.
- Communicate with you, your family, or your employer in a manner that causes alarm, distress, or humiliation –they are not to call you at work once you have advised the collector in writing not to.
- Use forms or letters that are designed to look like court documents – all collection agencies are licensed and the Government must approve the forms and letters they use.
- It can be viewed as a serious offense if any agency continues to use documents, letters, or make telephone calls after the Director has advised the agency to stop.
- Collectors are not allowed to attempt to collect money from any person that is not liable for the debt – in other words, if you have not signed for the debt, do not pay it until you have spoken with a professional. Remember that debts do not transfer by virtue of marriage. You are not responsible for your husband’s or wife’s debts unless you have signed for it, but remember to speak to a professional before making any payments.
- It is a serious offense for any person to attempt to collect a debt that is not owing or to try and collect more money than is owing on the debt.
- The Government must license all third-party collectors; however, if they work for the company that granted the credit they do not need to hold a collectors license.
- Attempts to have a debtor pay for the cost of collecting the debt are unreasonable if those costs are not payable by that person.
- Communication with a person during days and times that are prohibited by the legislation of the province (check the laws in your province to see what time frames apply).
The debt collection act does not refer to debt collectors by their profession; it refers to them as a “person” who should not do these things. All persons that work in the field of debt collection are bound by this legislation.
All debt collectors are accountable
Over the past year I have had several debt collectors tell me they were “not governed” by the Debt Collection Act and simply put that it is “rubbish”. It is very important to note that not all debt collectors are difficult to work with. In fact, many people in this difficult line of work are very knowledgeable and skilled at what they do. The debt collection industry is like any other field; a few “bad apples” ruin it for everyone else.
I cannot stress enough how important it is to know what your rights are when facing a financially difficult situation. It is also up to each one of us to understand what our responsibilities are when we are in debt.
