Are you being harrassed by debt collectors in Ontario? While debt collectors certainly have the right to contact you by all means necessary, they have to abide by certain provincial and federal rules. In this article, we’ll dive into what those rules are:
1) Debt Collection Agencies Must Be Licensed
Debt collection agencies in Ontario must be regulated by the Collection and Debt Settlement Services Act (CDSSA). You can verify their licensing status on the Ontario Ministry of Public and Business Service Delivery website.
2) Debt Collectors Must Follow Strict Communication Guidelines
Debt collectors cannot contact debtors at unreasonable hours or engage in harassing language and tactics. They must also stop communication if you (the debtor) request it. For more details, refer to the Ontario Ministry of Consumer Services.
3) Debtors Have the Right to Verify Debts
Debtors can request verification of the debt from collectors. Collectors must provide documentation proving the validity of the debt and their authority to collect it. Also, collection activities must stop if the debt is disputed until the dispute is resolved. For further information on this point, please refer to Consumer Protection Ontario.
4) Collection Fees and Charges Must Be Reasonable
Debt collectors are allowed to charge fees, but these fees must be disclosed upfront and be reasonable. They cannot charge excessive interest rates. Once again, see details on Consumer Protection Ontario.
5) Legal Action Requires Proper Notification
Before taking legal action, debt collectors must provide sufficient and clear notice to the debtor. If the case proceeds to court, the creditor must prove the debt’s validity. If a court judgment is obtained, collectors may use legal means such as garnishing wages or seizing assets, subject to exemptions. Learn more from the Ontario Courts.
6) Consumer Protection Laws Offer Additional Safeguards
If you think your collectors aren’t abiding by the rules, know that the Consumer Protection Act (CPA) can provide extra protections against unfair debt collection practices. Complaints can be filed with Consumer Protection Ontario or the Ontario Ombudsman.
7) Debt Settlement Companies Must Be Licensed
Verify your collector’s licensing information! Debt settlement companies in Ontario must be licensed and comply with regulations. They negotiate with creditors to reduce debt amounts but must disclose all fees and associated risks. Check licensing and regulations on Consumer Protection Ontario.
8) Bankruptcy Procedures Are Governed by Federal Law
Individuals considering bankruptcy must follow the procedures outlined in the Bankruptcy and Insolvency Act. This involves meeting with a Licensed Insolvency Trustee and understanding the impact on credit and assets.
9) Debt Collectors Cannot Contact You at Unreasonable Hours
Debt collectors must avoid contacting you before 7 a.m. or after 9 p.m. on weekdays, and before 9 a.m. or after 6 p.m. on weekends. If they do, you can take legal action.
10) You Have the Right to Request Verification of Debt
If you’re unsure of the validity of a debt, you can request verification from the collector. They must provide clear and consise documentation within 30 days.
Your Collection Agency isn’t Following All of These Rules?
If debtors in Ontario feel that their collectors are not following the rules set out by the Collection and Debt Settlement Services Act or other relevant regulations, they have several recourses available to them:
1. File a Complaint with the Collection Agency
The first step is to file a formal complaint with the debt collection agency involved. Most agencies have a complaint resolution process that they are required to follow. This information is usually provided in the debt collection agency’s initial communication.
2. Contact Consumer Protection Ontario
Debtors can report violations and seek guidance from Consumer Protection Ontario. They offer resources and support for dealing with unfair debt collection practices and can assist in mediating disputes between debtors and collection agencies.
3. Reach Out to the Ontario Ministry of Public and Business Service Delivery
For issues related to licensing and regulatory compliance, debtors can contact the Ontario Ministry of Public and Business Service Delivery. This organization can investigate complaints about unlicensed or improperly licensed debt collectors.
4. File a Complaint with the Better Business Bureau (BBB)
If the debt collection agency is accredited with the Better Business Bureau (BBB), debtors can file a complaint with the BBB. The BBB is a reputable third party organization that can mediate disputes and help resolve issues. Collectors don’t want complaints publicly displayed on their profile so they will do everything they can to resolve the dispute with you.
5. Seek Legal Advice
Debtors have the option to consult with a debt lawyer for advice on their legal rights and options. Lawyers can provide guidance on whether the collector’s actions breach any laws and what steps to take next. The Ontario Legal Aid website can help individuals find legal assistance.
6. Contact the Ontario Ombudsman
For unresolved issues or if the debt collector’s practices involve public service agencies, debtors can file a complaint with the Ontario Ombudsman. The Ombudsman investigates complaints about unfair treatment and administrative injustices, including by debt collectors.
7. File a Complaint with the Financial Consumer Agency of Canada (FCAC)
Although more commonly used for financial institutions, the FCAC can sometimes provide guidance on issues related to financial services, including debt collection practices.
8. Report to the Office of the Privacy Commissioner of Canada
If there are concerns about privacy violations related to the handling of personal information, debtors can file a complaint with the Office of the Privacy Commissioner of Canada.
That’s it, folks. You should have all the resources necessary to help you determine if your debt collectors are following the Ontario government rules. If you have debt in Ontario, we highly recommend contact a nonprofit credit counsellor like Consolidated Credit Canada or Credit Counselling Canada, who can provide free advice on your debt situation and how to get rid of it without harming your credit score.
A credit counselor or a financial advisor can provide several options, such as: debt consolidation, setting up a DMP, filing a consumer proposal or bankruptcy.
Also, stop using your credit cards and avoid taking any other loan, as these two practices will most likely make your debt load exponentially heavier.
Mark Turner is a retired financial writer that now enjoys blogging about different financial topics, such as commodities, inflation, debt, retirement, alternative investments and Canadian politics.
