Dealing with Debt Collectors

If you are in debt and have fallen behind in your payments, you may have received phone calls or letters demanding payment. If you’re far enough behind, you may even be threatened with court action, or the seizure of your car or furnishings. Sometimes you might even receive calls about a debt that isn’t yours. If so, you’ll want to know what your rights are.

There are laws to protect debtors

Without debt collection laws, there is the potential for abuse, including midnight phone calls demanding payment, complaints to a debtor's employer about the debt, and threats of terrible consequences. There are laws that protect debtors from unreasonable collection practices.

How does the Business Practices & Consumer Protection Act protect debtors?

In British Columbia, the Business Practices and Consumer Protection Act (administered by Consumer Protection BC) ensures the collection of debts is done in a reasonable manner. The Act has two important aims:

• to license debt collection businesses and collection agents
• to regulate the conduct of creditors and debt collection businesses

The Act recognizes that creditors have a right to collect monies owing to them and outlines how and when a collector may contact a debtor, but at the same time, it recognizes that debtors should be protected from unreasonable debt collection activities.

How do debt collectors operate?

A debt collector is someone who carries on the business of collecting debts for others for a fee. If you bought a suit from a local store and haven't made the payments, the store owner may eventually give up on you and hire a debt collection business to recover the money from you. Normally the debt collection business charges the creditor (in this example, the store owner) a fee in proportion to the amount they actually recover from you. If the debt collector recovers nothing, they get no fee, so they are more aggressive in their collection tactics than creditors who are doing their own collecting.

Harassment is forbidden

The general rule is that anyone collecting a debt – either a creditor or a debt collection business – cannot communicate or attempt to communicate with a debtor or their family, acquaintances or employer in such a way that the communication constitutes harassment. Harassment is defined in the Business Practices and Consumer Protection Act to include:

• using threatening or intimidating language
• exerting excessive or unreasonable pressure
• publishing or threatening to publish the debtor’s failure to pay what they owe the creditor

Creditors and debt collectors cannot intimidate you

A debt collector is not allowed to contact you, your family, or your employer in such a way that it may cause alarm, distress, or humiliation. For example, they cannot phone your home every ten minutes all day long demanding payment, because it is likely that the tactic will cause distress to your family members. Similarly, they aren’t allowed to stand on your front lawn with a megaphone, demanding payment, for all your neighbours to hear. Those are extreme examples, but many more subtle techniques are forbidden as well.

Can your employer be contacted?

Creditors and debt collectors must be careful when contacting your place of work. They can only contact your employer to confirm your employment. So they can’t harass your boss, or prejudice your reputation by suggesting that you ought to be fired because of your debts. But a creditor or debt collector can make one attempt to collect a debt from you while you’re at your place of work, if they can’t reach you at home or if you won’t respond.

Creditors and debt collectors aren’t allowed to mislead you

They can’t use forms or documents where the appearance or language would cause you to think that they come from a court or government office. For example, they can’t mail you a letter demanding payment, produced in the form of a “Court Summons,” because you might be misled into thinking that it is an official court document.

Only the appropriate amount can be collected, and only from the right person

Debt collectors cannot collect or try to collect money from someone who doesn’t owe the money, or attempt to collect more money than is owed to the creditor. Keep in mind that interest can continue to accumulate on an outstanding debt, and this may be claimed as long as it is reasonable.

What if you believe that you’re a victim of harassment or unreasonable collection practices?

If you think you’re a victim, you have three options to consider:

• complain
• accept only written communications
• ask to be sued

Your first choice is to complain

Start by asking to speak with the supervisor at the debt collection agency. If that gets you nowhere, you can complain to Consumer Protection BC. They can provide you with information on how to address the complaint directly with the debt collector. If the unreasonable collection behaviour continues, Consumer Protection BC may investigate and can take steps against the debt collector or creditor. To make a complaint, call Consumer Protection BC at 1.888.564.9963 (toll-free).

Your second choice is to only accept written communication

If the nature or frequency of the collection telephone calls is upsetting you and the calls won’t stop, you can request that all future communication be in writing only. It’s an offence if a debt collector doesn’t follow your request. You should put your request in writing and keep a copy for your records.

Your third choice is to ask the creditor to sue you

If you disagree with the debt, you can notify the creditor and debt collector that you dispute the debt and want the creditor to take the matter to court. Upon written notification, all other types of collection must stop. You should keep a copy of your communication to the creditor and debt collector for your records. Note that a debt may still show on your credit report while it is being disputed.

What if you’re contacted about a debt that isn’t yours?

If you’re contacted about a debt that isn’t yours, contact the collection agency to let them know that you are not the debtor. If the calls continue, contact Consumer Protection BC, who can assist you.

Remember, if you’re in debt, you have a legal obligation to repay the money

But the Business Practices & Consumer Protection Act regulates the practices that debt collectors may use in recovering their money.

Where can you get help or find more information?

• See the consumer information section published by Consumer Protection BC on their website at www.consumerprotectionbc.ca, or call 1.888.564.9963 (toll-free).
• If you are in financial difficulty or have trouble paying your bills, refer to script 253 on “When You Can’t Pay Your Debts”.
• See the manual Consumer Law and Credit/Debt Law published by the Legal Services Society, BC and available for free on their website at www.legalaid.bc.ca. To find it, click “Our Publications” then under “I want to find a publication by subject,” click “Debt”. This manual is for paralegals, legal information counsellors, and lawyers with clients who have consumer/debt problems.

[updated December 2014]

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In law, to formally deliver documents to a person in a manner that complies with the rules of court. Service may be ordinary (mailed or delivered to a litigant's address for service), personal (hand-delivered to a person), or substituted (performed in a way other than the rules normally require). See "address for delivery," "ordinary service," "personal service" and "substituted service."

A sum of money or an obligation owed by one person to another. A "debtor" is a person responsible for paying a debt; a "creditor" is the person to whom the debt is owed.

A court proceeding in which one party sues another for a specific remedy or relief, also called a "lawsuit" or a "case." An action for divorce, for example, is a court proceeding in which the claimant sues the respondent for the relief of a divorce order.

Under the Family Law Act, a term that describes the time a person who is not a guardian of a child, including a parent who is not a guardian, has with that child. Under the Divorce Act, a term that describes the time a person who is not a married spouse has with a child. See "guardian" and "parental responsibilities."

(1) In law, a court proceeding, a lawsuit, a legal action, a case, or (2) a claimant's claim against a respondent. (3) In fashion, menswear designed to inflict maximum discomfort at maximum cost. See "action."

In law, (2) a lawsuit, an action, or a cause of action, or (2) the wrongful act of another which gives rise to a claim for relief. See "action" and "cause of action."

A duty, whether contractual, moral, or legal in origin, to do or not do something. See "duty."