Difference between revisions of "Dealing with Debt Collectors"

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{{Dial-A-Law TOC|expanded = credit}}
{{Dial-A-Law TOC|expanded = credit}}
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.
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 should know your rights.


==There are laws to protect debtors==
==The law protects debtors from unreasonable collection practices==
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.
Without debt collection laws, there is the potential for abuse by people trying to collect a debt, including midnight phone calls demanding payment, complaints to a debtor's employer about the debt, and threats of terrible consequences. The law protects debtors (people who owe money) from these types of unreasonable collection practices.


==How does the ''Business Practices & Consumer Protection Act'' protect debtors?==
==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:
In British Columbia, the ''[http://www.bclaws.ca/civix/document/id/complete/statreg/04002_00 Business Practices and Consumer Protection Act]'' (administered by [https://www.consumerprotectionbc.ca/ Consumer Protection BC]) ensures the collection of debts is reasonable. 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.
* to license debt collection businesses and collection agents
* to regulate the conduct of creditors and debt collection businesses


==How do debt collectors operate?==
The Act recognizes that creditors have a right to collect money 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.  
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==
==What are debt collectors and how do they operate?==
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:
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 related to the amount they 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.


*using threatening or intimidating language
The ''Business Practices and Consumer Protection Act'' prohibits debt collectors from suing to collect debts unless the debtor has been given notice that the debt has been assigned to them from the creditor, or the debt collector has given notice to the debtor that they intend to sue. The notice is usually a letter to the debtor demanding payment and describing the debt claim, the nature of the default, the terms for resolution, directions for reply, and a specific deadline for the reply. But if the collection has not been assigned to a debt collector, a creditor can sue without first sending the debtor a letter demanding payment.
*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 harass you==
The general rule is that anyone collecting a debt—either a creditor or a debt collector—cannot communicate or attempt to communicate with a debtor or their family, acquaintances, or employer in such a way that the communication is harassment. Harassment is defined in the ''Business Practices and Consumer Protection Act'' to include:
 
* using threatening, intimidating, profane, or coercive language
* exerting excessive, undue, or unreasonable pressure
* publishing or threatening to publish the debtor’s failure to pay what they owe the creditor
 
The ''Business Practices and Consumer Protection Act'' also prohibits debt collectors from continuing to communicate with a debtor directly, once the debtor has told the debt collector to communicate with the debtor’s lawyer and provided the lawyer’s address.
 
Beyond the ''Business Practices and Consumer Protection Act'', the ''Criminal Code'' also prohibits direct threats of harm to persons or property, extortion, and conveying false messages with intent to alarm.


==Creditors and debt collectors cannot intimidate you==
==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.
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 cannot mislead you==
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 can’t use forms or documents that look like they come from a court or the government. For example, they can’t mail you a letter that looks like a court summons or document and demands payment because that would be misleading.
 
==Can creditors and debt collectors contact your employer?==
Yes, but creditors and debt collectors must be careful when contacting your employer. They can do so only to confirm your employment. So they can’t harass your boss, or harm your reputation by suggesting that you should 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==
==Only the right amount can be collected, and only from the right person==
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.
Debt collectors cannot collect or try to collect money from someone who doesn’t owe the money, or try to collect more money than is owed to the creditor. But interest can continue to accumulate on an outstanding debt, and they can collect that, if it is reasonable.


==Only the appropriate amount can be collected, and only from the right person==
==If you experience harassment or unreasonable collection practices==
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.
You have three options:


==What if you believe that you’re a victim of harassment or unreasonable collection practices?==
* complain
If you think you’re a victim, you have three options to consider:
* accept only written communications
*complain
* ask the creditor to sue you
*accept only written communications
*ask to be sued


==Your first choice is to complain==
==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).
Ask to speak with a supervisor at the debt collection agency. If that gets you nowhere, you can [https://www.consumerprotectionbc.ca/consumers-alias/resolving-problems/submitting-a-written-complaint-to-us complain to Consumer Protection BC]. They can explain how to deal with the complaint directly with the debt collector. If the unreasonable collection behaviour continues, Consumer Protection BC may investigate and stop 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==
==Accept only 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.
If the type 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. Put your request in writing and keep a copy for your records.


==Your third choice is to ask the creditor to sue you==
==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.
If you disagree with the debt, you can notify the creditor and debt collector that you dispute the debt and want the creditor to sue you so a court can rule on whether you owe money. Once they receive your written notification, they must stop all other types of collection. Keep a copy of your communication to the creditor and debt collector for your records. A debt may still show on your credit report while you are disputing it.


==What if you’re contacted about a debt that isn’t yours?==
==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.
Tell the debt collector that you are not the debtor. If the calls continue, contact Consumer Protection BC, who can help you.


==Remember, if you’re in debt, you have a legal obligation to repay the money==
==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.
You have to pay the debt, But the ''Business Practices & Consumer Protection Act'' regulates the practices that debt collectors can use in trying to recover their money.


==Where can you get help or find more information?==
==More information==
*See the consumer information section published by Consumer Protection BC on their website at [http://www.consumerprotectionbc.ca www.consumerprotectionbc.ca], or call 1.888.564.9963 (toll-free).
* See the [https://www.consumerprotectionbc.ca/consumers-alias/help-for-how-can-we-help consumer information section] of [http://www.consumerprotectionbc.ca/ Consumer Protection BC], Or call 1.888.564.9963 (toll-free).
*If you are in financial difficulty or have trouble paying your bills, refer to script [[When You Can't Pay Your Debts (Script 253)|253]] on “When You Can’t Pay Your Debts”.
* If you are in financial difficulty or have trouble paying your bills, check script [[When You Can't Pay Your Debts (Script 253)|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 [http://www.legalaid.bc.ca 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.  
* See the manual [http://www.legalaid.bc.ca/publications/pub.php?pub=17 Consumer Law and Credit/Debt Law] published by the [http://www.legalaid.bc.ca/ Legal Services Society] of BC. This manual is for paralegals, legal information counsellors, and lawyers with clients who have consumer/debt problems.




[updated December 2014]
[updated November 2016]


'''The above was last reviewed for accuracy by Daniel Hsu via John Carlisle, and edited by John Blois.'''


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