A debt collection agency in Canada needs a licence or registration from the province it collects in, and that province’s rules limit how it can contact you. When the debt is owed to a bank or federal credit union, each a federally regulated financial institution, federal rules add a second layer that also covers any agency the bank hires. Once a bank sells the debt, or when the creditor was never a bank, provincial law is the only layer.
Ontario, British Columbia, Alberta, Nova Scotia and Saskatchewan all license or register collection agencies and limit how they can contact you. Other provinces and the territories have their own rules, so check yours first.
How a Debt Collection Agency Ends Up With Your Debt
When payments stop, the creditor (the company you owe) can collect through its own department, hire an agency to collect for it, or sell the debt to an agency. A hired agency collects on the creditor’s behalf, while a buyer owns the debt. In Ontario, a business that buys overdue debts and collects them is treated as a collection agency, which must be registered.
A written notice usually comes first, naming the agency, the creditor and the amount. If a notice says the debt is about to be sent to an agency, contact the creditor at once, because it may be open to other arrangements.
Federal Rules When a Bank Is Collecting
When a bank or federal credit union, or an agency acting for it, collects a debt, federal rules add four limits on top of the provincial ones:
- Other people: friends, relatives, neighbours and your employer can be contacted only for your phone number or address, unless they co-signed your loan or you agreed. An employer can also confirm that you work there.
- Hours: Monday to Saturday from 7 a.m. to 9 p.m., Sunday from 1 p.m. to 5 p.m., and never on holidays.
- Cell phone: only if you gave that number as a way to reach you.
- Costs: no collection-related costs added to what you owe, other than legal fees and fees for non-sufficient funds on payments you submitted. Interest under your original agreement is a separate matter; in British Columbia, for example, it can still be charged at the agreement’s rate.
Once the bank sells the debt, these federal limits no longer apply to the buyer, and provincial or territorial law alone protects you.
Is the Debt Collection Agency Licensed? How to Check
Check the debt collection agency’s licence before you discuss the debt or give out any banking details. Where to look depends on the province.
| Province | Who is covered | Where to check |
|---|---|---|
| Ontario | Collection agencies, including debt buyers | The province’s directory of registered collection agencies, updated monthly |
| British Columbia | Agencies and individual collectors | Consumer Protection BC’s licence check, for a business or an individual |
| Alberta | Agencies and individual collectors | Service Alberta’s licence search, with the type set to Collection Agency |
| Nova Scotia | Agencies | The province’s list of licensed collection agencies |
For a collection agency in Ontario, search the agency’s name, because individual collectors no longer need to register. Saskatchewan also requires a licence, including from agencies outside the province that collect there, and tells you to ask for the licence number before paying, because scammers pose as collectors.
A licence is not an endorsement, and it does not confirm that the debt is yours. A lender collecting its own debt is a different case: in Nova Scotia it needs no licence, though similar conduct rules apply.
When a Collection Agency Can Contact You
Calling windows and contact limits vary by province.
| Province | Calls allowed | How often |
|---|---|---|
| Ontario | Monday to Saturday, 7 a.m. to 9 p.m.; Sunday, 1 p.m. to 5 p.m.; not on statutory holidays | Three times in seven days without your consent, once the agency has spoken to you |
| British Columbia | Same windows as Ontario | Contact must not amount to harassment |
| Alberta | 7 a.m. to 10 p.m., Alberta time | Three unsolicited contacts in any seven days |
| Nova Scotia | Not on Sundays, and not between 9 p.m. and 8 a.m. | Three contacts in seven days |
| Saskatchewan | Not before 8 a.m. or after 9 p.m., and not on Sundays or holidays | Harassment is barred |
Debt collection in Ontario starts with a written notice. The agency must wait six days after sending it before trying to collect, and before it goes out the agency may contact you only to confirm your identity, address or email. British Columbia’s wait is five days, and Nova Scotia bars phone or electronic contact until a notice has gone out. In BC, a company that bought your debt is the creditor and does not have to send that letter first.
In Ontario, British Columbia, Alberta and Nova Scotia, relatives, friends, neighbours and employers can be contacted only for narrow reasons, such as finding your phone number or address or because they guaranteed the debt.
What a request achieves depends on where you live. Under the federal rules, and in British Columbia, you can ask a collector to contact you only in writing, but saying so on the phone is not enough.
Under the federal rules the request goes by registered mail and gives an address where they can reach you. In British Columbia, send it in a way that gives you proof of delivery, such as registered mail, fax or email. Nova Scotia lets you ask for contact only through a lawyer or at an address you give.
In Ontario, asking for letters only does not stop calls. Contact has to stop in three cases:
- Your lawyer or licensed paralegal sends a notice asking the agency to deal only with them.
- You send a notice, by a method you can prove such as email, registered mail or courier, that you dispute the debt and suggest it be taken to court. The agency could then advise the creditor to take legal action.
- You tell the agency it has the wrong person, and it cannot confirm otherwise.
All five provinces bar harassment. Beyond that:
- Threats and abusive language are barred in Ontario, British Columbia, Alberta and Nova Scotia.
- False or misleading statements are barred in Ontario, British Columbia and Alberta, and Nova Scotia bars lying about your credit or a legal action.
- Publishing, or threatening to publish, that you have not paid is barred in Ontario, British Columbia and Nova Scotia.
- Collecting more than you owe is barred in British Columbia, Nova Scotia and Saskatchewan.
How to Tell Whether a Collection Notice Is Real
In Ontario, a genuine notice must show the amount when the debt first came due, the amount owing now, the creditors involved and the agency’s authority to demand payment. It must also give the agency’s mailing address, a toll-free number and a statement of your rights. British Columbia requires the creditor, the amounts and the collector’s identity and authority. A letter with only a total and a phone number is missing most of that.
If you are unsure, take these steps before replying:
- Ask for the collector’s name, company and phone number, who they collect for, and the amount, creditor and start date of the debt. Say you will call back.
- Compare the details with your bills, bank statements and credit report.
- Look up the agency’s licence or registration, using the table above.
- Ask for the details in writing. British Columbia gives you that right, and in Ontario the agency must give a breakdown of the amount owing if you ask.
- Do not pay, or share banking details, until the debt checks out.
Some threats are a sign that something is wrong. In Alberta, a collector cannot say it will bring in the police or have you jailed, and police do not get involved in collecting debts. It also cannot imply that the agency is part of a law firm. Scam messages can also copy a real agency’s name and appearance, so check the sender’s address and web address the way you would for online loan scams.
If the debt is not yours, tell the collector and the creditor, and check whether it appears on your credit report.
What a Collection Account Does to Your Credit Report
Once a debt goes to an agency, your credit score will go down. A lower score can mean refused credit, higher interest on new credit, higher insurance premiums or a landlord who says no. In Ontario, an agency can register the debt on your credit report, and in British Columbia collectors can report to a credit reporting agency.
The entry does not last forever. Credit bureaus keep information about unpaid credit cards and loans for up to six years. Equifax Canada and TransUnion Canada both count a collection account’s six years from its first delinquency, and the other entries a report can carry are covered under how long bad credit stays on your report.
Because borrowing can cost more with a lower score, compare the full cost of any bad credit loan before accepting one. Do not borrow to pay a collection debt you have not verified.
Where to Complain, and What a Complaint Does Not Do
A complaint about a bank, or an agency collecting for it, starts with the bank. Because every collection agency is licensed by its province, the provincial regulator also takes complaints about an agency, including one that bought your debt. In the five provinces covered here, that is Consumer Protection Ontario, Consumer Protection BC, Service Alberta, Service Nova Scotia or Saskatchewan’s Consumer Protection Division. Keep a record of all your communications, and identify the debt by account name or number whenever you write.
A complaint does not cancel the debt. Ontario says you stay responsible for what you owe whatever the agency did, and British Columbia says the debt does not go away just because the calls have stopped. Whether to pay, negotiate or settle is a separate decision, and your rights apply whichever way it goes. If several debts are behind at once, a non-profit credit counsellor can review them together, as part of a wider plan to reduce and manage debt in Canada.
Letters and calls are not court papers. If a claim is served on you, respond within its deadline, which can be short. In Alberta it is 20 calendar days to file a dispute note, or one month if you are served outside the province.
Frequently Asked Questions
Yes. Collecting a debt you owe is legal, but collection agencies must be licensed or registered in the province they collect in and follow its rules on when and how often they contact you. Harassment is barred in all five provinces covered here, and federal rules add limits when a bank is collecting.
A real notice names the creditor, the amount owing, the agency and its authority to collect. Confirm the agency’s licence or registration with your province, and match the debt to your own bills and credit report before paying anything. Threats of police action or jail are a warning sign.
Ontario agencies must be registered, send a written notice first and wait six days before collecting. They cannot call before 7 a.m., after 9 p.m., on statutory holidays, or on Sundays outside 1 p.m. to 5 p.m. After speaking with you, they may contact you no more than three times in seven days.
The creditor either hires an agency to collect for it or sells the debt outright. You will usually get a written notice naming the agency, the creditor and the amount, and your credit score will go down. Provincial rules protect you either way, and federal rules add limits while a bank or its agency collects.
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