Difference between revisions of "Dealing with Debt Collectors"

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{{DEMOWARNING}}
{{REVIEWEDPLS | reviewer = [http://creaseharman.com/r-bruce-e-hallsor/ Bruce Hallsor, KC], Crease Harman LLP and [https://meridianlawgroup.ca/lawyers/david-madani/ David Madani], Swadden & Company|date= March 2020}} {{Dial-A-Law TOC|expanded = money}}
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If you’re behind on debt payments, the law limits how a debt collector can contact you and others around you. Learn your rights and steps to take to protect them.


If you are in debt and have fallen behind in your payments, you may have received phone calls or letters demanding payment. If you’re far enough behind, you may even be threatened with court action, or the seizure of your car or furnishings. Sometimes you might even receive calls about a debt that isn’t yours. If so, you’ll want to know what your rights are.
==What you should know==
===Collectors versus agents (and why that matters)===
First, a bit of terminology. A '''debt collector''' is someone who is attempting to collect a debt. The laws we explain here apply to any person or business that fits this description.


==There are laws to protect debtors==
A '''collection agent''', meanwhile, is someone whose business it is to collect debts for other parties. Someone who is owed money (a creditor) might decide to “sell” the debt to a collection agent.
Without debt collection laws, there is the potential for abuse, including midnight phone calls demanding payment, complaints to a debtor's employer about the debt, and threats of terrible consequences. There are laws that protect debtors from unreasonable collection practices.


==How does the ''Business Practices & Consumer Protection Act'' protect debtors?==
So what, you wonder? Two reasons. One is collection agents are known for their aggressive tactics. (They make money only if they recover some of the debt.) Many of the laws explained here are to protect you from these tactics.
In British Columbia, the ''Business Practices and Consumer Protection Act'' (administered by Consumer Protection BC) ensures the collection of debts is done in a reasonable manner. The Act has two important aims:
*to license debt collection businesses and collection agents
*to regulate the conduct of creditors and debt collection businesses


The Act recognizes that creditors have a right to collect monies owing to them and outlines how and when a collector may contact a debtor, but at the same time, it recognizes that debtors should be protected from unreasonable debt collection activities.
Second, collection agents must be ''licensed'' by Consumer Protection BC. If a collection agent is treating you badly, Consumer Protection BC has more scope to penalize them.


==How do debt collectors operate?==
===A debt collector can’t harass you===
A debt collector is someone who carries on the business of collecting debts for others for a fee. If you bought a suit from a local store and haven't made the payments, the store owner may eventually give up on you and hire a debt collection business to recover the money from you. Normally the debt collection business charges the creditor (in this example, the store owner) a fee in proportion to the amount they actually recover from you. If the debt collector recovers nothing, they get no fee, so they are more aggressive in their collection tactics than creditors who are doing their own collecting.
Now, for a few rules that apply to ''any debt collector'', including collection agents.


==Harassment is forbidden==
First, they can’t communicate with you in a way that amounts to '''harassment'''.
The general rule is that anyone collecting a debt – either a creditor or a debt collection business – cannot communicate or attempt to communicate with a debtor or their family, acquaintances or employer in such a way that the communication constitutes harassment. Harassment is defined in the ''Business Practices and Consumer Protection Act'' to include:


*using threatening or intimidating language
Harassment can include:
*exerting excessive or unreasonable pressure
*publishing or threatening to publish the debtor’s failure to pay what they owe the creditor


==Creditors and debt collectors cannot intimidate you==
* using threatening, intimidating, or profane language
A debt collector is not allowed to contact you, your family, or your employer in such a way that it may cause alarm, distress, or humiliation. For example, they cannot phone your home every ten minutes all day long demanding payment, because it is likely that the tactic will cause distress to your family members. Similarly, they aren’t allowed to stand on your front lawn with a megaphone, demanding payment, for all your neighbours to hear. Those are extreme examples, but many more subtle techniques are forbidden as well.
* exerting excessive or unreasonable pressure
* publishing or threatening to publish your failure to pay


==Can your employer be contacted?==
For example, a debt collector can’t phone your home every hour demanding payment. This would be exerting excessive or unreasonable pressure.
Creditors and debt collectors must be careful when contacting your place of work. They can only contact your employer to confirm your employment. So they can’t harass your boss, or prejudice your reputation by suggesting that you ought to be fired because of your debts. But a creditor or debt collector can make one attempt to collect a debt from you while you’re at your place of work, if they can’t reach you at home or if you won’t respond.


==Creditors and debt collectors aren’t allowed to mislead you==
This rule also covers members of your family, household, a relative, neighbour, friend, or your employer.
They can’t use forms or documents where the appearance or language would cause you to think that they come from a court or government office. For example, they can’t mail you a letter demanding payment, produced in the form of a “Court Summons,” because you might be misled into thinking that it is an official court document.


==Only the appropriate amount can be collected, and only from the right person==
As well, a debt collector can’t break criminal laws. For example, they can’t:
Debt collectors cannot collect or try to collect money from someone who doesn’t owe the money, or attempt to collect more money than is owed to the creditor. Keep in mind that interest can continue to accumulate on an outstanding debt, and this may be claimed as long as it is reasonable.
* threaten to harm you or your property
* abuse their authority to get money from you
* convey false information with the intent to alarm you


==What if you believe that you’re a victim of harassment or unreasonable collection practices?==
They’re also not allowed to be deceptive. For example, a debt collector can’t send you letters that look like they come from the government when they don’t.
If you think you’re a victim, you have three options to consider:
*complain
*accept only written communications
*ask to be sued


==Your first choice is to complain==
===Additional restrictions the law puts on debt collectors===
Start by asking to speak with the supervisor at the debt collection agency. If that gets you nowhere, you can complain to Consumer Protection BC. They can provide you with information on how to address the complaint directly with the debt collector. If the unreasonable collection behaviour continues, Consumer Protection BC may investigate and can take steps against the debt collector or creditor. To make a complaint, call Consumer Protection BC at 1.888.564.9963 (toll-free).
A debt collector must send you written notice of the debt before calling you. (One exception: they can call you before sending notice if they’re only trying to find out your home address or email.)


==Your second choice is to only accept written communication==
They must wait five days after sending notice before calling.
If the nature or frequency of the collection telephone calls is upsetting you and the calls won’t stop, you can request that all future communication be in writing only. It’s an offence if a debt collector doesn’t follow your request. You should put your request in writing and keep a copy for your records.


==Your third choice is to ask the creditor to sue you==
As well, debt collectors are only allowed to contact you at certain times of day. They mustn’t contact you by phone or in person:
If you disagree with the debt, you can notify the creditor and debt collector that you dispute the debt and want the creditor to take the matter to court. Upon written notification, all other types of collection must stop. You should keep a copy of your communication to the creditor and debt collector for your records. Note that a debt may still show on your credit report while it is being disputed.
* from Monday to Saturday before 7 am or after 9 pm
* on a Sunday before 1 pm or after 5 pm
* on a statutory holiday at any time


==What if you’re contacted about a debt that isn’t yours?==
A debt collector can only contact you at work if:
If you’re contacted about a debt that isn’t yours, contact the collection agency to let them know that you are not the debtor. If the calls continue, contact Consumer Protection BC, who can assist you.
* They’re trying to find out your home address, phone number, or email (if they don’t have that information already).
* You permit them to.
* They tried to reach you at home, by phone, or by email, but failed to connect. If that’s the case, they’re still limited to one verbal attempt to contact you at work.


==Remember, if you’re in debt, you have a legal obligation to repay the money==
There are also strict limits on when a debt collector can contact your friends and family. A collector can only contact them to request your home address, phone number, or email.
But the ''Business Practices & Consumer Protection Act'' regulates the practices that debt collectors may use in recovering their money.


==Where can you get help or find more information?==
Two exceptions to this rule are where:
*See the consumer information section published by Consumer Protection BC on their website at [http://www.consumerprotectionbc.ca www.consumerprotectionbc.ca], or call 1.888.564.9963 (toll-free).
* the person being contacted has '''guaranteed''' the debt, and is being contacted about the guarantee
*If you are in financial difficulty or have trouble paying your bills, refer to script [[When You Can’t Pay Your Debts (Script 253)|253]] on “When You Can’t Pay Your Debts”.
* you’ve given permission to the collector to contact the person about the debt
*See the manual Consumer Law and Credit/Debt Law published by the Legal Services Society, BC and available for free on their website at [http://www.legalaid.bc.ca www.legalaid.bc.ca]. To find it, click “Our Publications” then under “I want to find a publication by subject,” click “Debt”. This manual is for paralegals, legal information counsellors, and lawyers with clients who have consumer/debt problems.


You can ask the collector to only communicate with you in writing. Or, you can request the collector communicate directly with your lawyer.


[updated December 2014]
Consumer Protection BC has forms you can fill out and give to the collector for these requests. [https://www.consumerprotectionbc.ca/consumer-help/debt-collection/# See the Consumer Protection BC website].


===If you dispute the debt===
You can dispute a debt. You might do this where the debt has already been paid, it’s someone else’s debt, or the debt collector is asking for more than you owe.


----
When you dispute a debt, you’re saying you would like the creditor (the party who is owed money) to take the matter to court. Once you do that, the debt collector must stop communicating with you.
----


To dispute a debt, you need to contact the creditor in writing. Consumer Protection BC provides a form you can use. [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Debt-in-dispute.pdf Visit their website].


Meanwhile, if you think the debt collector has the wrong person, you should tell them in writing. The Consumer Protection BC website has a form you can use for this, too. [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Not-the-debtor.pdf It's on their website].
==Work out the problem==
There are steps you can take to work out a problem with a debt collector.
===Step 1. Keep a record of all communications===
If you run into problems with a debt collector, start with creating a paper trail. Keep records of all your correspondence. This includes anything they say to you — or anyone else — about the debt you owe.
Record the date, time, and content of any phone calls or messages you receive.
===Step 2. Research the debt collector===
Confirm the identity of the debt collector. Use caller ID or tracing if you have to.
If it’s a '''collection agent''', they must be licensed by Consumer Protection BC. You can use the licence search on their website to find out if the agent is properly licensed. [https://www.consumerprotectionbc.ca/check-a-licence-search/ Visit the Consumer Protection BC website].
===Step 3. Contact the debt collector===
First, a caution: If you’re being asked to pay a debt and you think the limitation period may have expired, seek legal advice ''before'' contacting the debt collector. If you contact the collector, you may restart the limitation period. ([https://www.peopleslawschool.ca/options-legal-help/ There are options for free or low-cost legal advice].)
Tell the debt collector you want to see written notice of the debt, if you haven’t gotten it already. (They’re legally required to wait five days after giving you written notice before they call you.)
Let the collector know you’re aware of the debts and want the calls to stop. Tell them you’ll make a complaint to Consumer Protection BC if the calls continue. You can also say you’ll take legal action if there is any further harassment.
You can request the collector only contact you in writing or through your lawyer. They’re legally obliged to cooperate.
Also, consider sending a written letter outlining your proposal for paying back the debt. The collector may agree to change the terms to make it easier for you.
===Step 4. Complain to Consumer Protection BC===
If the harassment continues, you can make a complaint to Consumer Protection BC. They oversee debt collectors and license collection agents in the province.
You can contact them by phone or make a complaint. [https://www.consumerprotectionbc.ca/complaint-assistant/ See the Consumer Protection BC website].
===Go deeper===
Want to go further? We offer more detailed guidance on your rights and how to deal with debt collectors. [https://www.peopleslawschool.ca/dealing-debt-collectors/ See our in-depth coverage of this topic].
==Who can help==
===Helpful agencies===
Consider reaching out to this agency for help in dealing with debt collectors.
:'''Consumer Protection BC'''
:They can help if you have a complaint about a debt collector.
:Call 1-888-564-9963
:[https://www.consumerprotectionbc.ca/ Visit website]
===Legal advice===
Getting legal advice can help you clarify how to proceed.
:'''Lawyer Referral Service'''
:Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
:Call 1-800-663-1919
:[https://www.accessprobono.ca/our-programs/lawyer-referral-service Visit website]
:'''Access Pro Bono's Free Legal Advice'''
:Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
:Call 1-877-762-6664
:[https://www.accessprobono.ca/get-legal-help Visit website]
:P'''eople’s Law School'''
:See more options for free or low-cost legal help.
:[https://www.peopleslawschool.ca/options-legal-help/ Visit website]
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Latest revision as of 01:03, 7 November 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Bruce Hallsor, KC, Crease Harman LLP and David Madani, Swadden & Company in March 2020.
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If you’re behind on debt payments, the law limits how a debt collector can contact you and others around you. Learn your rights and steps to take to protect them.

What you should know

Collectors versus agents (and why that matters)

First, a bit of terminology. A debt collector is someone who is attempting to collect a debt. The laws we explain here apply to any person or business that fits this description.

A collection agent, meanwhile, is someone whose business it is to collect debts for other parties. Someone who is owed money (a creditor) might decide to “sell” the debt to a collection agent.

So what, you wonder? Two reasons. One is collection agents are known for their aggressive tactics. (They make money only if they recover some of the debt.) Many of the laws explained here are to protect you from these tactics.

Second, collection agents must be licensed by Consumer Protection BC. If a collection agent is treating you badly, Consumer Protection BC has more scope to penalize them.

A debt collector can’t harass you

Now, for a few rules that apply to any debt collector, including collection agents.

First, they can’t communicate with you in a way that amounts to harassment.

Harassment can include:

  • using threatening, intimidating, or profane language
  • exerting excessive or unreasonable pressure
  • publishing or threatening to publish your failure to pay

For example, a debt collector can’t phone your home every hour demanding payment. This would be exerting excessive or unreasonable pressure.

This rule also covers members of your family, household, a relative, neighbour, friend, or your employer.

As well, a debt collector can’t break criminal laws. For example, they can’t:

  • threaten to harm you or your property
  • abuse their authority to get money from you
  • convey false information with the intent to alarm you

They’re also not allowed to be deceptive. For example, a debt collector can’t send you letters that look like they come from the government when they don’t.

Additional restrictions the law puts on debt collectors

A debt collector must send you written notice of the debt before calling you. (One exception: they can call you before sending notice if they’re only trying to find out your home address or email.)

They must wait five days after sending notice before calling.

As well, debt collectors are only allowed to contact you at certain times of day. They mustn’t contact you by phone or in person:

  • from Monday to Saturday before 7 am or after 9 pm
  • on a Sunday before 1 pm or after 5 pm
  • on a statutory holiday at any time

A debt collector can only contact you at work if:

  • They’re trying to find out your home address, phone number, or email (if they don’t have that information already).
  • You permit them to.
  • They tried to reach you at home, by phone, or by email, but failed to connect. If that’s the case, they’re still limited to one verbal attempt to contact you at work.

There are also strict limits on when a debt collector can contact your friends and family. A collector can only contact them to request your home address, phone number, or email.

Two exceptions to this rule are where:

  • the person being contacted has guaranteed the debt, and is being contacted about the guarantee
  • you’ve given permission to the collector to contact the person about the debt

You can ask the collector to only communicate with you in writing. Or, you can request the collector communicate directly with your lawyer.

Consumer Protection BC has forms you can fill out and give to the collector for these requests. See the Consumer Protection BC website.

If you dispute the debt

You can dispute a debt. You might do this where the debt has already been paid, it’s someone else’s debt, or the debt collector is asking for more than you owe.

When you dispute a debt, you’re saying you would like the creditor (the party who is owed money) to take the matter to court. Once you do that, the debt collector must stop communicating with you.

To dispute a debt, you need to contact the creditor in writing. Consumer Protection BC provides a form you can use. Visit their website.

Meanwhile, if you think the debt collector has the wrong person, you should tell them in writing. The Consumer Protection BC website has a form you can use for this, too. It's on their website.

Work out the problem

There are steps you can take to work out a problem with a debt collector.

Step 1. Keep a record of all communications

If you run into problems with a debt collector, start with creating a paper trail. Keep records of all your correspondence. This includes anything they say to you — or anyone else — about the debt you owe.

Record the date, time, and content of any phone calls or messages you receive.

Step 2. Research the debt collector

Confirm the identity of the debt collector. Use caller ID or tracing if you have to.

If it’s a collection agent, they must be licensed by Consumer Protection BC. You can use the licence search on their website to find out if the agent is properly licensed. Visit the Consumer Protection BC website.

Step 3. Contact the debt collector

First, a caution: If you’re being asked to pay a debt and you think the limitation period may have expired, seek legal advice before contacting the debt collector. If you contact the collector, you may restart the limitation period. (There are options for free or low-cost legal advice.)

Tell the debt collector you want to see written notice of the debt, if you haven’t gotten it already. (They’re legally required to wait five days after giving you written notice before they call you.)

Let the collector know you’re aware of the debts and want the calls to stop. Tell them you’ll make a complaint to Consumer Protection BC if the calls continue. You can also say you’ll take legal action if there is any further harassment.

You can request the collector only contact you in writing or through your lawyer. They’re legally obliged to cooperate.

Also, consider sending a written letter outlining your proposal for paying back the debt. The collector may agree to change the terms to make it easier for you.

Step 4. Complain to Consumer Protection BC

If the harassment continues, you can make a complaint to Consumer Protection BC. They oversee debt collectors and license collection agents in the province.

You can contact them by phone or make a complaint. See the Consumer Protection BC website.

Go deeper

Want to go further? We offer more detailed guidance on your rights and how to deal with debt collectors. See our in-depth coverage of this topic.

Who can help

Helpful agencies

Consider reaching out to this agency for help in dealing with debt collectors.

Consumer Protection BC
They can help if you have a complaint about a debt collector.
Call 1-888-564-9963
Visit website

Legal advice

Getting legal advice can help you clarify how to proceed.

Lawyer Referral Service
Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
Call 1-800-663-1919
Visit website
Access Pro Bono's Free Legal Advice
Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
Call 1-877-762-6664
Visit website
People’s Law School
See more options for free or low-cost legal help.
Visit website
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