How to Stop Collection Calls in Canada

Step 1: Get the Facts About Collection Agencies

A major part of facing up to collection calls is simply knowing what you’re dealing with. Removing the element of the unknown can curtail the fear and make it easier to answer the phone without anxiety.

What Are Collection Calls?

Collection calls are phone calls from creditors requesting debt repayments. If you fall behind on your payments to your creditors, have unpaid debts, or miss bill payments, you’ll begin to get collection calls.

Initially, these calls will come from the original creditor or primary lender in the form of non-aggressive, soft collections. They will notify you about your missed payment and inquire when you can bring the account current. It's important to maintain open communication with the creditor so they can be aware of any hardship you're experiencing and work with you to stop the account from being sent to third-party collections.

If your account continues to fall further behind (usually three to four payments past due), the creditor may write off the debt, sell it to a collection agency, or hire one to collect on their behalf. The collections may become more aggressive and threatening at this point. Sometimes, your account may be forwarded to a law firm for legal action, and the creditor will attempt to sue to recover the outstanding balance plus court costs. If a judgment is awarded, the creditor may enforce a lien, garnishment, and seizure of an asset.

Calls from collection agencies can feel incessant and even aggressive at times, making it tempting to ignore them. But once you know what debt collection agencies can actually do in Canada and how to handle the conversation, you’ll be better equipped to move forward with less stress.

What is a Collection Agency Allowed to do?

Contact you regarding the debts you owe.
Use reasonable means to get you to pay the debt.

Collections agencies are not required to tell you your rights; it’s up to you to find that out for yourself.

What is a Collection Agency NOT Allowed to do?

Make charges or threats unrelated to the collection of the debt.
Make abusive calls where they lose their temper, use profanity, or engage in other forms of verbal abuse.
Talk to your employer without your permission, other than a single call to confirm your employment.
Make frequent calls that constitute harassment.
Contact you at your workplace unless they don’t have your home contact details or they failed to reach you at home.
Call at prohibited times, like on holidays or late at night, as outlined in the provincial Collections Act, which varies from province to province.
Give you documents that resemble official court documents, which have no legal standing.
Contact your friends and family.
Collect more than you owe.

Step 2: Learn About Your Rights

Collection agencies don’t have complete freedom to threaten you or get aggressive when making collection calls. Whether they fall under provincial or federal regulations, there are certain activities they’re prohibited from doing in pursuit of repayment. Learning your rights–including your right to make a complaint–is important when dealing with collection agencies.

There are general rules that collection agencies across Canada must abide by, but they do vary slightly from province to province. For example, the statute of limitations—the period of time during which a creditor can legally enforce debt collection—depends on a few things, including which province you live in and the type of debt you owe. To find out more about the specific rules for your province or territory and the kind of debt you owe, check out the Office of Consumer Affairs (OCA).

However, if the statute of limitations has passed, the collection agency can still call to collect on the debt, which will continue to impact your credit until it reaches maturity. At this time, the debt can be purged from the credit bureaus. This usually takes six years.

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What is the Most Common Mistake People Make When Dealing with Collection Agencies?

When the phone starts ringing, it’s easy to get flustered and make small mistakes, which can negatively impact your credit score and overall quality of life. The common mistakes people make when dealing with collection agencies include:

Not answering the calls. The phone ringing can be overwhelming, but not answering when the collection agency calls only makes it worse. You need to answer the phone so you fully understand what you’re dealing with.
Not opening your mail. Open any document served to you or sent by registered mail, as it may contain time-sensitive legal documents and require immediate action.
Paying without verifying the debt. Don’t pay the collection agency without receiving a letter or email verifying the details about the debt you’re paying, like whether it’s a car loan or a credit card bill. Follow these three steps to follow when settling or paying a debt in full with a collection agency:
- Obtain a settlement or payment letter that outlines the terms of paying the debt, including any payment plans and deadlines.
- Pay the debt through traceable means (not cash) and keep a copy for your records.
- Request a release letter after your payment is sent and ask the collection agency to send you a letter confirming the balance has been paid or settled in full. Keep this letter for a minimum of seven years to avoid issues if the debt balance is disputed in the future.
Not keeping the receipts. Follow-up with collection agencies if you don’t receive a receipt or notice of payment.
Not keeping an eye on credit reports. Monitor your credit report for updates that should be taking place on your file after the debt is paid or settled. Allow for a minimum of 30 days for the collection agency to update changes on your credit report.

When it all feels overwhelming, it’s hard to keep an eye on the line and if a collection agency has crossed it. If you have questions or concerns regarding the actions undertaken by a collection agency, it’s best to contact your provincial or territorial consumer affairs office directly. For a full list, check out the Canadian Consumer Handbook.

“Having a debt go to collections is not easy to deal with in many ways. But knowing your rights and responsibilities is truly important to recover from it.”

Mike Bergeron, Counsellor Manager at Credit Canada.

Step 3: Stop Collection Agencies From Calling You

If a collection agency or debt collector goes beyond the limits of what they’re allowed to do to seek collection, you can send a cease and desist letter. You can use this legal action to force creditors to only contact you in writing. Cease and desist letters are not legally enforceable on their own, but if the issue escalates, you will have a paper trail for later legal purposes if necessary.

Once the collection agency receives the cease and desist request, they should only communicate with you via written correspondence. The cease and desist process can take about three to five days.

Stopping the phone calls doesn’t mean the debt has gone away. You’ll still receive collection notices by mail or email. But this can bring some calm while you sort out how to pay down your debt and stop the collection notices for good.

Step 4: Start Dealing With Your Debts

Ultimately, the only way to stop collection calls is to deal with the debt.

If Possible, Pay The Money You Owe

This is the only way to stop collection calls. If paying your debt at once is not possible, determine whether it is possible to offer an alternative method of payment, such as a series of monthly payments. Make this offer to the collection agency in writing and provide a good-faith payment to show your commitment to following through with the proposed debt repayment plan.

There are many debt management strategies available, ranging from debt consolidation to insolvency. There are paths forward for you, and Credit Canada can help you develop a dedicated plan for debt management that works for you and your circumstances.

Never Pay Cash

It’s important to have a paper trail of all dealings with a collection agency, particularly when making payments. By sending cash to the collection agency, you have no guarantee that it will be applied against your debt or that it will be appropriately recorded. This is also an important way to protect yourself from accidentally sending money to a scammer or a caller impersonating a legitimate debt collector or creditor.

Have a record (such as cancelled cheques or a receipt) of any payments you have made to the collection agency. Ask for receipts for every payment you send.

Put Everything In Writing

Any offers–whether made by you or by the collection agent–should be put in writing before being acted on. Remember this: If it’s not on paper, how can you prove that an agreement exists? Maintaining a paper trail is necessary to cover yourself and prevent misunderstandings, predatory practices, and potentially additional interest charges.

Record Everything

Keep a notebook by your phone, and when a collection agent calls, write down the following:

The agency’s name.
The agent’s name, phone number, and extension.
The time and date of the call.
Details of the debt that they are calling about.
When you incurred the debt in question.
Any other information that is discussed in the course of your call, such as settlement offers and plans for repayment.

Stop Collection Calls Now

Call us at 1(800)267-2272 or reach out today to review your options with one of our qualified, friendly Credit Counsellors. In the meantime, equip yourself with the financial knowledge you need to get through the difficult days with confidence and peace of mind.

Get out of debt. Get back into life.

To speak to someone right now, call: 1 (800) 267-2272

Or, request a callback from one of our certified credit counsellors. It's free.

How to Stop Collection Calls

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