Difference between revisions of "Dealing with Debt Collectors"

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{{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're behind on debt payments, there are laws to protect you from harassment by collectors. For example, collectors can’t use threatening language or contact you during certain times of day.
===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.


==Understand your legal rights==
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.


===The difference between a collector and a collection agent (and why this matters)===
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.
Under the [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec113_smooth law in BC], a '''collector''' is a person who is collecting or attempting to collect a debt. BC debt collection laws apply to any person or business that fits this description. It could be a retail business you bought furniture from, a cellphone company you signed a contract with, or a collection agency that has taken over your overdue credit card debt.  


A '''collection agent''', meanwhile, is someone who in the course of business collects debt for other parties. A party who is owed money (a creditor) might decide to “sell” the debt to a collection agent. In exchange, the collection agent typically promises to give the creditor a portion of the debt the agent is able to recover.  
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.


====Why this matters====
===A debt collector can’t harass you===
Collection agents have no special legal powers to collect from a debtor. They are like any other creditor. That said, collection agents are known for their aggressive tactics. (Agents make money only if they recover some of the debt, which can lead to more aggressive tactics.) Some collection agents contact debtors often and use intimidation to scare debtors into paying. Many of the laws we explain here are designed to protect debtors from these types of tactics.  
Now, for a few rules that apply to ''any debt collector'', including collection agents.


====Collection agents must be licensed====
First, they can’t communicate with you in a way that amounts to '''harassment'''.
As well, collection agents must be licensed by [https://www.consumerprotectionbc.ca/ Consumer Protection BC]. If a collection agent is treating you badly, Consumer Protection BC has more scope to penalize them.  


===A collector can’t harass you===
Harassment can include:
Under the [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec114_smooth law in BC], a collector (including a collection agent) can’t communicate with a debtor in a way that amounts to '''harassment'''. Examples of harassment include:
*using threatening, profane or intimidating language
*exerting excessive or unreasonable pressure
*publishing or threatening to publish a debtor’s failure to pay


For example, a collector can’t phone your home every hour demanding payment. This would be exerting excessive or unreasonable pressure.
* using threatening, intimidating, or profane language
* exerting excessive or unreasonable pressure
* publishing or threatening to publish your failure to pay


This rule also covers a member of the debtor’s family or household, a relative, neighbour, friend or acquaintance, or the debtor’s employer.  
For example, a debt collector can’t phone your home every hour demanding payment. This would be exerting excessive or unreasonable pressure.


As well, under [http://canlii.ca/t/7vf2 Canada’s criminal laws], a collector mustn’t:
This rule also covers members of your family, household, a relative, neighbour, friend, or your employer.
*threaten to harm a debtor or their property
*abuse its authority to get money from a debtor
*convey false information with the intent to alarm a debtor


A collector can’t be deceptive. For example, they can’t send you letters that look like they come from the government when they don’t. That’s considered false information designed to scare you.
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


==How a collector can contact 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.


====The collector must first send you written notice====
===Additional restrictions the law puts on debt collectors===
Under the [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec115_smooth law in BC], a collector can’t try to collect payment of a debt until they’ve sent the debtor written notice. This notice must include:
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.)
*The name of the creditor (both the original creditor and the current one if it’s different).
*The amount of the debt (both on the date it was first due and the amount currently owing).
*The collector’s identity, and its authority for collecting the debt.


However, a collector can call a debtor before sending the notice if the collector is only trying to find out the debtor’s home address or email.  
They must wait five days after sending notice before calling.


====What time of day a collector can contact 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:
Under [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec118_smooth BC law], a collector must '''not communicate''' by telephone or in person with a debtor:
* from Monday to Saturday before 7 am or after 9 pm
*from Monday to Saturday before 7 am or after 9 pm
* on a Sunday before 1 pm or after 5 pm
*on a Sunday before 1 pm or after 5pm
* on a statutory holiday at any time
*on a statutory holiday at any time


This rule also applies to:
A debt collector can only contact you at work if:
*a member of a debtor’s family or household
* They’re trying to find out your home address, phone number, or email (if they don’t have that information already).
*a relative, neighbour, friend or acquaintance of the debtor
* You permit them to.
*the debtor’s employer
* 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.
*any guarantor of the debt


===When a collector can 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.
Under [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec116_smooth BC law], a collector can only contact a debtor at work in one of the following situations:
*The collector doesn’t have the debtor’s home address, phone number or email, and is only trying to get that information.
*The debtor permits the collector to contact them at work.
*The collector has attempted to contact the debtor at home, by phone or by email, but has failed to connect. In this case, the collector must not make more than one verbal attempt to contact the debtor at work.


===You can request a collector contact you only in writing===
Two exceptions to this rule are where:
Under [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec116_smooth BC law], a debtor can request that a collector communicate with them only in writing. (The debtor must provide their mailing address.)
* 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


Alternatively, you can request that a collector communicate directly with your lawyer. 
You can ask the collector to only communicate with you in writing. Or, you can request the collector communicate directly with your lawyer.
[https://www.consumerprotectionbc.ca/ Consumer Protection BC] provides forms you can fill out and give to a collector to [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Communication-in-writing-only.pdf request communication in writing] or [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Notify-a-collection-agency-you-wish-for-communication-to-be-done-through-your-lawyer-only.pdf through a lawyer].


===You can dispute the debt===
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].
Under the [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Notify-a-collection-agency-you-wish-for-communication-to-be-done-through-your-lawyer-only.pdf law in BC], you can '''dispute a debt''', inviting the creditor to take the matter to court. You might dispute a debt where:
*the debt was already paid
*it’s someone else’s debt
*the collector is asking for more than what’s owed


Once you notify the collector and the creditor that you dispute the debt, a collector must stop communicating with you.  
===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.


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


==Common questions==
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].


===Can a collector contact my family and friends?===
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].
Only in very limited circumstances. Under the [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec117_smooth law in BC], a collector can contact a debtor’s friends or family members only to request the debtor’s home address, phone number or email. Two exceptions to this rule are when:
#The person being contacted has guaranteed the debt, and is being contacted about the guarantee.
#The debtor has given permission to the collector to contact the person about the debt.


It’s illegal for a collector to harass a debtor’s friends or family members. See above for a description of what amounts to harassment.
==Work out the problem==


===Can a collector contact my boss?===
There are steps you can take to work out a problem with a debt collector.
Only in two circumstances:
#For the purpose of confirming your employment, work title and work address. In this case, the collector must first give you notice they intend to bring legal action to recover the debt.
#If you authorize (in writing) the collector to contact your employer.


Otherwise, a collector must not communicate with your employer.
===Step 1. Keep a record of all communications===


As well, it’s illegal for a collector to harass a debtor’s employer. For example, a collector can’t repeatedly call your boss to try to get you fired over an unpaid debt.
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.


===My child owes money, and the collector is coming to me for payment. Can they do that?===
Record the date, time, and content of any phone calls or messages you receive.
No. A collector cannot try to collect a debt from someone who doesn’t owe the money. Consumer Protection BC offers a [https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Not-the-debtor.pdf form to advise a collector you are not the debtor].


If you ''are'' responsible for the debt, things are different. For example, if you [[Co-Signing or Guaranteeing a Loan (Script 248)|guaranteed or co-signed a loan]], a collector can come to you for payment. In such a case, the collector would still need to follow the rules explained here. 
===Step 2. Research the debt collector===


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


===With an unreasonable collector===
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].
'''Consumer Protection BC''' licenses collection agents in the province and oversees debt collection practices. They can help if you have a complaint about debt collection.  
:Toll-free: 1-888-564-9963
:Web: [http://www.consumerprotectionbc.ca/ consumerprotectionbc.ca]
{| class="wikitable"
|align="left"|'''Tip'''
People’s Law School’s information on [https://www.peopleslawschool.ca/everyday-legal-problems/money-debt/dealing-debt/dealing-debt-collectors dealing with debt collectors] includes step-by-step guidance on making a complaint about a collector.
|}
===With managing your finances===
The '''Credit Counselling Society of BC''' is a non-profit society that helps people better manage their money and debt.
:Toll-free: 1-888-527-8999
:Web: [http://www.nomoredebts.org/ nomoredebts.org]


===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].)


[updated July 2018]
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.)


'''The above was last reviewed for legal accuracy by [http://creaseharman.com/r-bruce-e-hallsor/ Bruce Hallsor QC], Crease Harman.'''
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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