Understanding the debt collection process in Canada

It’s important to partner with a collection agency that can assist in the collection process to drive your KPIs, but one that professionally operates within the myriad of regulations that govern the industry.

If you have a national customer base, the collection laws vary in each province and territory, and knowing what can and cannot be done is often confusing.

Here are some basics that you should know:
• Legitimate agencies are licensed in every province and territory in which they operate. Ask your agency partner for copies of their licenses. Each license clearly outlines the jurisdiction, license number, issue date and expiration date.
• Some provinces require each location in which the agency operates to have a license.
• Agencies that collect from consumers in Quebec must have a physical office in Quebec. Communications to consumers must originate in Quebec and be in French, or if bilingual, French must be first, and clearly display the agency’s license number.
• Most provinces (but not all) require an initial notice to be sent to the consumer’s last known address or in some provinces, an email address for the consumer. The letter must clearly show the agency’s full name and physical address, the creditor to which the debt is owed and the amount owed. In some provinces like Ontario and BC, the original amount when the debt first became due and payable must be shown, as well as adjustments and payments. And in Ontario, letters must contain the Consumer’s Bill of Rights and a specific sentence advising the consumer that they can request a full breakdown of the debt.
• Most provinces (but not all) require agencies to wait a number of days before making collection calls. The number of hold days varies from province to province and territory.
• If a consumer claims to not have received a first notice, the agency must send another notice. The agency should verify the address and resend the letter. The applicable hold period applies. The agency is only obligated to do this once.
• Debt collectors can only contact debtors between certain hours. In Ontario, it’s between 7am and 9pm Monday through Saturday, and 1pm to 5pm on Sundays.
• Collection calls cannot be made on statutory holidays which also vary from province to province and territory.
• In some provinces, consumer communication is limited to 3 communications in a rolling 7 day period for any one creditor, unless otherwise approved by the consumer. Communications include conversations with the consumer, messages left for the consumer on voicemail or with a 3rd party, emails, SMS messages. Call attempts where no conversation or message is left do not count towards the 3 contacts.
• Agencies cannot continue to call a telephone number where they have been advised that it’s the wrong party or if the consumer does not live at the address.

Consumers who believe a collections agency has violated any of the rules can file a complaint with the province’s consumers’ affairs office. Agencies and collectors can face warnings and fines.

And that’s why it’s essential to partner with a collection agency that understands and follows these rules to prevent issues and delayed collection down the line.

At MJR Capital Services, we take professionalism seriously. We’ve earned an excellent reputation for our ethics and our results. When you partner with us, you’re aligning with a trusted company that revolved around positive communication and collection strategies that are effective, adaptable and efficient. Learn more about our process on our website: https://www.mjrcapital.com/