Difference between revisions of "Dealing with Debt Collectors"

From Clicklaw Wikibooks
Jump to navigation Jump to search
 
(12 intermediate revisions by 3 users not shown)
Line 1: Line 1:
{{Dial-A-Law Blurb}}
{{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}}
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.


{{Dial-A-Law TOC|expanded = credit}}
==What you should know==
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 should know your rights.
===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.


==The law protects debtors from unreasonable collection practices==
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 by people trying to collect a debt, including midnight phone calls demanding payment, complaints to a debtor's employer about the debt, and threats of terrible consequences. The law protects debtors (people who owe money) from these types of 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 ''[http://www.bclaws.ca/civix/document/id/complete/statreg/04002_00 Business Practices and Consumer Protection Act]'' (administered by [https://www.consumerprotectionbc.ca/ Consumer Protection BC]) ensures the collection of debts is reasonable. The Act has two important aims:


* to license debt collection businesses and collection agents
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.
* to regulate the conduct of creditors and debt collection businesses


The Act recognizes that creditors have a right to collect money 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.  
===A debt collector can’t harass you===
Now, for a few rules that apply to ''any debt collector'', including collection agents.


==What are debt collectors and how do they operate?==
First, they can’t communicate with you in a way that amounts to '''harassment'''.
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 related to the amount they 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.


The ''Business Practices and Consumer Protection Act'' prohibits debt collectors from suing to collect debts unless the debtor has been given notice that the debt has been assigned to them from the creditor, or the debt collector has given notice to the debtor that they intend to sue. The notice is usually a letter to the debtor demanding payment and describing the debt claim, the nature of the default, the terms for resolution, directions for reply, and a specific deadline for the reply. But if the collection has not been assigned to a debt collector, a creditor can sue without first sending the debtor a letter demanding payment.
Harassment can include:


==Creditors and debt collectors cannot harass you==
* using threatening, intimidating, or profane language
The general rule is that anyone collecting a debt—either a creditor or a debt collector—cannot communicate or attempt to communicate with a debtor or their family, acquaintances, or employer in such a way that the communication is harassment. Harassment is defined in the ''Business Practices and Consumer Protection Act'' to include:
* exerting excessive or unreasonable pressure
* publishing or threatening to publish your failure to pay


* using threatening, intimidating, profane, or coercive language
For example, a debt collector can’t phone your home every hour demanding payment. This would be exerting excessive or unreasonable pressure.
* exerting excessive, undue, or unreasonable pressure
* publishing or threatening to publish the debtor’s failure to pay what they owe the creditor


The ''Business Practices and Consumer Protection Act'' also prohibits debt collectors from continuing to communicate with a debtor directly, once the debtor has told the debt collector to communicate with the debtor’s lawyer and provided the lawyer’s address.  
This rule also covers members of your family, household, a relative, neighbour, friend, or your employer.


Beyond the ''Business Practices and Consumer Protection Act'', the ''Criminal Code'' also prohibits direct threats of harm to persons or property, extortion, and conveying false messages with intent to alarm.
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


==Creditors and debt collectors cannot intimidate 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.
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.


==Creditors and debt collectors cannot mislead you==
===Additional restrictions the law puts on debt collectors===
Creditors and debt collectors can’t use forms or documents that look like they come from a court or the government. For example, they can’t mail you a letter that looks like a court summons or document and demands payment because that would be misleading.
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.)


==Can creditors and debt collectors contact your employer?==
They must wait five days after sending notice before calling.
Yes, but creditors and debt collectors must be careful when contacting your employer. They can do so only to confirm your employment. So they can’t harass your boss, or harm your reputation by suggesting that you should 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.


==Only the right amount can be collected, and only from the right person==
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:
Debt collectors cannot collect or try to collect money from someone who doesn’t owe the money, or try to collect more money than is owed to the creditor. But interest can continue to accumulate on an outstanding debt, and they can collect that, if it is reasonable.
* 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


==If you experience harassment or unreasonable collection practices==
A debt collector can only contact you at work if:
You have three options:
* 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.


* complain
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.
* accept only written communications
* ask the creditor to sue you


==Complain==
Two exceptions to this rule are where:
Ask to speak with a supervisor at the debt collection agency. If that gets you nowhere, you can [https://www.consumerprotectionbc.ca/consumer-help/start-a-complaint/ complain to Consumer Protection BC]. They can explain how to deal with the complaint directly with the debt collector. If the unreasonable collection behaviour continues, Consumer Protection BC may investigate and stop the debt collector or creditor. To make a complaint, call Consumer Protection BC at 1.888.564.9963 (toll-free).
* 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


==Accept only written communication==
You can ask the collector to only communicate with you in writing. Or, you can request the collector communicate directly with your lawyer.
If the type 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. Put your request in writing and keep a copy for your records.


==Ask the creditor to sue you==
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 disagree with the debt, you can notify the creditor and debt collector that you dispute the debt and want the creditor to sue you so a court can rule on whether you owe money. Once they receive your written notification, they must stop all other types of collection. Keep a copy of your communication to the creditor and debt collector for your records. A debt may still show on your credit report while you are disputing it.


==What if you’re contacted about a debt that isn’t yours?==
===If you dispute the debt===
Tell the debt collector that you are not the debtor. If the calls continue, contact Consumer Protection BC, who can help you.
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.


==If you’re in debt, you have a legal obligation to repay the money==
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.
You have to pay the debt, But the ''Business Practices & Consumer Protection Act'' regulates the practices that debt collectors can use in trying to recover their money.


==More information==
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].
* See the [https://www.consumerprotectionbc.ca/consumer-help/ consumer help section] of [http://www.consumerprotectionbc.ca/ Consumer Protection BC], Or call 1.888.564.9963 (toll-free).
* If you are in financial difficulty or have trouble paying your bills, check script [[When You Can't Pay Your Debts (Script 253)|253]] on “When You Can’t Pay Your Debts”.


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].


[updated December 2016]
==Work out the problem==


'''The above was last reviewed for accuracy by Daniel Hsu via John Carlisle, and edited by John Blois.'''
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]
{{Dial-A-Law_Navbox|type=consumer}}
{{Dial-A-Law Copyright}}
{{Dial-A-Law Copyright}}
{{Dial-A-Law_Navbox|type=credit}}

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.
Dial-A-Law
Dial-A-Law‎
This page is
from Dial-A-Law‎,
a starting point for
information on the law
in British Columbia.
See the full contents.
About
Introduction
Consumer & Money
Money & Debt
 · Getting a Credit Card

 · Disputing a Credit Card Bill

 · Credit Reports

 · Co-Signing or Guaranteeing a Loan

 · Collecting on a Debt

 · Garnishment

 · Options for Getting Out of Debt

 · Dealing with Debt Collectors

 · Warehouse Liens

 · Financial Help for People with Disabilities

 · Income Assistance

 · Your Bank Account
Work & Business
Families & Children
Life
Courts & Crime
From
Visit more from People's Law School
People's Law School
v • d • e

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
v • d • e
 
Consumer & Money
Cars & Getting Around
Consumer
Money & Debt
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence Dial-A-Law © People's Law School is licensed under a Creative Commons Attribution - NonCommercial - ShareAlike 4.0 International Licence.


Retrieved from "https://stagewiki.clicklaw.bc.ca/index.php?title=Dealing_with_Debt_Collectors&oldid=57229"