If you don’t repay a debt, your creditor can hire a collection agency to pursue you for what’s owed.

In Ontario, debt collection laws are in place to ensure you are fairly treated when dealing with a debt collector.

This guide examines debt collection laws in Ontario, contact rules for debt collectors, and how long a debt can be collected in Ontario.

How do collection agencies work in Ontario?

If you owe money to a creditor, they can pass the debt to a debt collection agency that will attempt to collect the money owed.

Debt collection agencies will typically call, text and send emails and letters until you pay. They can take legal action against you if you don’t pay, leading to wage garnishment.

The debt collection process in Canada

Debts in collections appear on your credit report for six years, so act quickly before a collection is recorded on your credit report.

Ontario debt collection laws

Ontario offers consumers protection against predatory debt collection practices through rules set out in the Ontario Collection and Debt Settlement Services Act and its regulations.

Under this provincial legislation, debt collectors must be registered and regulated by The Ministry of Public and Business Service Delivery and follow certain rules.

In Ontario, a collection agency cannot:

  • Add any additional fees to the debt that you owe.
  • Harass you by using threatening, profane, intimidating or coercive language.
  • Harass you by using undue, excessive or unreasonable pressure.
  • Supply false or misleading information to anyone when attempting to collect a debt.
  • Disclose information about a debt to friends or family.
  • Recommend that a creditor take legal action against you without notifying you of their intention to make this recommendation.
  • Collect more than what is owed or charge fees for collecting the debt.

How can a collection agency contact me?

In Ontario, collection agencies must notify you in writing by letter or email before they start calling.

This written notice should include the following:

  • How much you owe
  • The name of the original creditor and the type of debt
  • The name of the collection agency and collector
  • Confirmation that they are registered in Ontario
  • The amount of the debt on the date it was first due and the current balance
  • Contact information for the collection agency, including mailing address, phone number and email
  • A disclosure statement explaining your rights with an offer to provide a breakdown of the balance on request.

Once a debt collection agency sends the letter, they must wait six calendar days before the next attempt to contact you about the debt.

You can write to a collection agency by registered mail, courier or email to request a written confirmation of the debt. You have the option to only respond to written communication.

When can debt collectors contact me?

Debt collectors in Ontario can call you from 7am to 9pm on weekdays and Saturdays. They can call you from 1pm to 5pm on Sundays, but they cannot contact you on statutory holidays.

Without your consent, they cannot contact you more than three times in seven days. Contact happens when they speak to you, leave a voicemail, or send an email or text message.

Can debt collectors call your friends or family?

In Ontario, debt collectors can contact your spouse, family member, relative, neighbour or friend to confirm your contact details or if you’ve given them written permission. If someone has guaranteed to pay the debt, they can contact that person for any reason.

Can debt collectors call you at work in Ontario?

Debt collectors can only contact your employer once to confirm your employment status unless your employer has guaranteed your debt or you have granted written permission for contact. In the event of a court order or wage garnishment, debt collectors are permitted to contact your employer.

How long can a debt be collected in Ontario?

In Ontario, a debt collector has two years to take legal action against you, starting from when you acknowledged the debt or last made a payment. This time limit is called the statute of limitations.

The Statute of Limitations on Debt in Canada

When the statute of limitations expires, you still owe the debt. A debt collector can still contact you in an attempt to make you pay, but they have lost the power to take legal action against you.

If the statute of limitations hasn’t expired, creditors and collection agencies can take legal action.

If you make a payment or acknowledge the debt before the original statute of limitations expires, the time limit is reset, and debt collectors have another two years to collect.

A collection agency must give you a written warning that they intend to pursue legal action.

Can a collection agency take you to court in Ontario?

Creditors and collection agencies in Ontario can take legal action within the statute of limitation period, which allows them to garnish wages, take money from your bank account and place a lien on your property.

Can a collection agency garnish your wages in Ontario?

In Ontario, a collection agency can garnish your wages if they obtain a wage garnishment order. Your employer is legally bound to comply with this request. The collection agency must notify you in writing, and you must respond within three weeks.

When do collection agencies give up?

Collection agencies typically do not give up on collecting a debt until the statute of limitations expires or they reach a settlement.

How to deal with debt collectors in Ontario

Ignoring debt won’t make it disappear. If a debt collector contacts you, you must take action quickly to stop legal action and avoid damaging your credit score.

Debts in collections damage your credit score and can result in legal action.

You want to make sure the collection agency is operating within the rules. Firstly, ensure that the collection agency is legitimate and that you owe the money. Don’t provide personal information or answer any questions.

Collection agencies must communicate in writing if you have sent them a written notice requesting to do so. If you want phone calls to stop, you can request in writing that they stop, but this won’t stop legal action.

If you owe the debt and are unable to pay: tell the collection agency your situation, who might be able to offer a reduced settlement or freeze interest for a while.

If you owe the debt and plan to repay it: arrange a monthly repayment plan that you can afford; don’t make promises that you can’t keep. You can usually pay a lump sum for less than the total amount. Get any payment agreement in writing, and always get a receipt.

If you don’t owe the debt: write to the collection agency and say that you dispute the debt and want the matter to be resolved in court.

If the amount owed is incorrect: contact the collection agency or the creditor to get more information. Collection agencies must provide you with a breakdown of the balance on request.

If you don’t know what to do: talk to a Licensed Insolvency Trustee who will advise you on how to resolve your debts.

How to complain about a collection agency in Ontario

If a collection agency is contacting you regarding an outstanding debt and you feel they are acting unlawfully, you should contact them by email, letter, or phone to make a complaint.

If unsatisfied with the outcome, you can file a complaint through Ontario’s consumer affairs office.

If you want to complain about a debt collection department or agency for a federally regulated financial institution, contact the Financial Consumer Agency of Canada.

Wrapping up

Debt collection laws in Ontario exist to protect your rights. If you are receiving collection calls and need some advice, speak to a Licensed Insolvency Trustee that can help you with your debts.

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