Dealing with a debt collector

A debt collection agency is a company that specializes in recovering unpaid debts. If you don't make your debt payments, a debt collector may contact you to collect money that you owe on a credit card, line of credit, or loan.

Your creditor, that is, the company that you owe money to, may try to get their money back by:

What happens when your debt is sent to a collection agency

You'll usually receive a notice in writing before a collection agency contacts you to collect the debt you owe.

The written notice should include:

Steps to take when you receive a notice that your debt is transferred to a collection agency

If you receive a notice that your creditor will transfer your debt to a collection agency, contact your creditor as soon as possible.

You may be able to:

Get information and tips on what to do when you contact your creditors to help reduce your debt.

What happens to your credit score

Once your creditor transfers your debt to a collection agency, your credit score will go down.

A low credit score means:

See how long information stays on your credit report.

What to do when a debt collector calls

Make sure to ask for and write down the following information:

Ask for details on the debt, such as:

Tell the debt collector that you'll call back as soon as you verify the information. Look at your bills and bank statements to help you confirm if the debt is yours and the amount you owe is correct.

You can ask the collection agency to contact you only in writing. Ask your legal advisor to send a written request to your creditor by registered mail, including an address and phone number at which you may be contacted.

Paying your debt once it has been transferred to a collection agency

If the debt is yours and the amount is correct, paying the full amount you owe will resolve the issue.

When repaying your debt:

If it’s not possible for you to pay the full amount:

What you should do if the debt isn't yours

If you think that the debt isn’t yours, or that an error has been made:

Learn how to get your credit report.

Learn how to check for errors on your credit report.

Your rights when dealing with a debt collector

You have rights with respect to how the debt is collected when dealing with a debt collector from a federally regulated financial institution or another party acting on its behalf.

Who a debt collector can contact

A debt collector can only contact your friends, employer, relatives or neighbours to get your telephone number or address.

This does not apply in the following cases:

If you gave consent orally to your financial institution, you must receive written confirmation of your consent either on paper or electronically.

When a debt collector can contact you

A debt collector can only contact you at the following times:

A debt collector can't contact you on holidays.

What a debt collector can't do

A debt collector can't do the following:

A debt collection agency can't add any collection-related costs to the amount you owe other than:

Making a complaint about a collection agency

If you feel that the debt collector you're dealing with isn't respecting your rights, contact the appropriate regulator.

If you're dealing with:

Contact the Financial Consumer Agency of Canada.

If your creditor sold your debt to a collection agency and you want to make a complaint about the agency’s debt collection practices.

Contact the consumer affairs office of your province or territory.

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