Nobody wants pick up the phone and hear a bill collector on the other side, but it happens. We overextend ourselves, buy things we can not afford, fall ill, lose jobs or some other emergencies arises and we start missing payments which eventually reaches a collection agency. Dealing with collection agencies is not always the first choice or a pleasant encounter; collection agents have a reputation of being rude, vulgar and harassing.

For a short while after graduating from University I worked at a collection agency. It was not a lot of fun when I was told by supervisors and trainers to be harsher on customers and threaten them as needed. Not surprisingly I left the agency fairly quickly, but I learned a lot from the inside. I learned the laws as well as how agents manipulate these laws.

Should a situation arise where you have to deal with a collection agency I hope the following tips can help you through this awful experience.

Educate Yourself

The first thing you need to do is educate yourself. What can a collection agent say or do? When can they call? What are your obligations? Understand your rights as well as your responsibilities.

In Canada collection agencies are regulated by provinces, although most have similar laws, some details will vary. Here is the collection agency act for Ontario. In the US they have the Fair Debt Collections And Practices Act.

Do Not Ignore

If the unfortunate happens and you do end up having an account in collections, do not ignore the calls and letters. Ignoring the issue will not get you anywhere, talk with the agent and try to find an appropriate solution for your financial problems. If it’s in 3rd party collection, the agent will have some discretion over the account.

Keep Record

Keep a record of everything you do and every conversation you have with the collection agency. If you mail a letter ensure it is registered and always ask them to send you everything in writing. Have phone conversations recorded, although you may need permission for this, it can go a long way when needed. Always ask for the persons full name and ID number, write down the time and date of the call.

What Collection Agencies CANNOT Do

Here are a few things the collection agency cannot do:

  • A collection agency may NOT contact you until six days after they have sent you a written notice. The notice should include all the following information: The name of the ORIGINAL creditor, the balance owing and the name of the collection agency.
  • They cannot contact you before 8am and after 9pm during the week and before 1pm and after 5pm on Sundays.
  • They cannot contact you more than 3 times in a seven-day period regarding the same debt.
  • Disclose any information to anyone else but you, they cannot say it is a collection agency calling or in anyway reveal that you owe money. This also applies to voicemails; they cannot reveal any details on a voicemail.
  • If you feel that the agency has violated any of the above rules or in anyway has harassed you record the date, time and details of the event and contact your consumer protection agency.

When speaking with a collections agent be professional and try to solve the issue rather than trying to avoid it or get in a fight.  Remember they are just doing a job.

Once an account is with a collection agency you can no longer solve the matter with the original creditor so do not try to contact them. You will only give yourself more headache and create confusion.

This is a guest article by Ray, the owner and primary author of Financial Highway, where he discusses investing, saving and practical money management concepts. You can check subscribe to his RSS feed or follow him on Twitter.


  1. FrugalTrader on October 29, 2009 at 11:36 am

    Great article Ray. I wish I knew these rules a couple years ago when a family member was harassed by a collections agency. From hearing the voice mails that they left, they definitely broke some of the rules listed above.

  2. Troy W. on October 29, 2009 at 11:57 am

    I’m curious… what kind of rights to they have to call family members?

    My father-in-law passed away a three of years ago, at 81, and my mother-in-law was NOT joint on any debt. There were only a couple small debts, unsecured department store credit cards. (Sears & The Bay)

    My mother-in-law could not afford to pay them when as her income was very little after her husband passed. Although she had cards in her name, the accounts were opened in the 50’s and she had never signed anything and the account was only in her husband’s name. I helped with the estate and immediately instructed her to cut up all credit cards, including hers, so they were never used beyond my father-in-law’s death.

    As you might guess, Sears & The Bay passed the debt onto a collections company who hounded her for months after my father-in-law passed away so I finally instructed her to give them my number as I assisted the Executor to the estate (my brother-in-law) who lived out of Province.

    After the estate was wrapped up there was only debt, related to the funeral expenses, and no money left. We sold the only asset my mother-in-law had, her car, to pay most of these expenses but we certainly had no intention of paying the credit card debt since there was nothing to pay it with.

    The collectors then hounded me for the debt, knowing fully that the estate was bankrupt, but expecting my mother-in-law to pay for it out of her monthly pension which was around $1K/month, barely enough to cover her property taxes, bills, and food costs.

    Finally, to get them off my back, I started telling them my mother-in-law died which was untrue but since they were going after debt that wasn’t hers I felt justified. The calls stopped.

    My question… what rights to the collectors have to call my mother-in-law or me for her deceased husband’s debt??? Any thoughts???

  3. kenyantykoon on October 29, 2009 at 2:09 pm

    in my country these people are very violent and definitely do not follow these rules. it will be a bad day in hell when you cross paths with these people. you ill wish that you had never borrowed that money. i think that is why my countrymen avoid loans like the bubonic plague

  4. Charles in Vancouver on October 29, 2009 at 6:11 pm

    What are the laws surrounding:
    1) Erroneous chargeoffs – e.g. a company (say, Bell Canada) bills you for something in error, they charge it off to a collection agency, the agency starts hounding you. Bell admits they were wrong but now it’s out of their hands.
    2) Cases where the company holding the original debt failed to notify the customer at a proper address or phone number, and the customer first hears about the whole thing through the collection agency?

  5. M Hawk on October 29, 2009 at 6:43 pm

    I used to also work at a collections agency. Couple notes:

    First off, try to be nice to the people you are talking to – in a job surrounded by negativity, when you find the nice people you’re usually willing to go to the ends of the earth for them.

    Secondly, tell the people your honest situation(in this job, you get good at sniffing out the lies), make a payment plan, and stick to it! When people made payment plans with us, they usually were a pretty sweet deal (lowest I ever did was $25 a month) and we could even freeze the interest rate as long as the payments kept coming in.

    Troy, as far as I knew we were allowed to call and hound whomever we could regarding debt. However, I could only ask them for information – I couldn’t officially ask them to pay off the debt. But, other agents I knew would trick other people into paying, using wording that suggested they were responsible without saying “you are legally indebted to us”. Ex: “Your name is on the loan” means, the name could be nothing more than a reference, but when you use that wording, people assume it means they owe.

    As far as I know, whether your mother-in-law owes them or not depends on the province you are in. In Alberta, I believe she would be responsible IF she was the executor of the will. I suggest phoning a lawyer on that one, though. Good luck.

  6. Ms Save Money on October 29, 2009 at 7:27 pm

    Good lists of things not to do. :) Collectors are shady.

  7. Ed Rempel on October 29, 2009 at 9:17 pm

    Hi Ray,

    I think you mean “Dreaded Bill Collector”, not “Dreadful..”. I’m not that scared of the really incompetent ones… :)


  8. Credit Card Chaser on October 30, 2009 at 5:23 am

    It’s interesting to hear some of these rules that apply to debt collectors even though I wonder how often they get broken… :)

  9. Sean on October 30, 2009 at 11:52 am

    Just as another datapoint, I started getting calls from a collection agency about a year ago. They were collecting for a 10 year old parking ticket from the University I went to.

    I don’t remember getting a parking ticket, so I asked for some proof. The first lady I talked to was very nice. I told her I’d pay it if they could show me some evidence that I got a parking ticket. She said she’d issue a request.

    The automated phone calls kept coming, so a month later I called back. The guy I talked to was downright rude, he was telling me that it was going to ruin my credit, etc.

    I did some research with the Manitoba Consumer and Corporate Affairs, including reading some of the relevant acts and calling someone there. I ended up writing a letter demanding proof and telling them to stop calling until they had proof. The calls stopped.

    A few other notes I found on the way

    – If you write them a letter telling them to stop calling, they have to.

    – If they put something on your credit report, you can write a letter to the credit agency demanding proof of the debt. If the proof isn’t available, the note has to be erased. This is one of the techniques used in those “I cleaned my credit report” eBooks — they just keep writing and demanding proof until someone slips up and forgets to respond.

  10. ExistingAlternatives on October 30, 2009 at 12:47 pm

    Excellent post, however, it is important to realize that Collections Agencies only call when you have not paid the bills you previously agreed to pay.
    Also, the last paragraph in the article is a little misleading, just because your account is with an agency, it does not mean you can’t settle with the original creditor.
    Only after the account is charged-off (over 6 months past due) the creditor may (in most cases they don’t) transfer the account to a third party collector, at which point the collector become the sole point of contact.

    @Troy W. Unfortunately, once a person passes away, the debt still needs to be settled.
    Usually it is the estate, if there is no money left, then next of kin.
    Most creditors will not go beyond the estate, but the reality is someone still has to pay.

  11. Paul S on October 30, 2009 at 1:59 pm

    Some very good advice in the article but also some incorrect info.Suggest the times when calls can be made are wrong and there is no mention of Saturday.
    The number of contacts is misleading as it is not unusual to have a collector
    and debtor speak 5 times in 1 day.Depends on who makes the call and if the calls are in reference to resolution of the matter.Not all things are as they may seem.
    Collectors have a job to do and it isn’t always pleasant.Lets remember the reason for the contact-“someone hasn’t paid as agreed” and everytime that happens it costs me more to buy an item or service.

  12. Credit Restoration Bureau on October 31, 2009 at 4:31 pm

    These rules get broken on a very regular basis. And for that reason, my advice to anyone dealing with bill collectors is that you should take extremely good notes or record your conversations if at all possible.

  13. Ray @ Financial Highway on October 31, 2009 at 9:03 pm

    Thanks FT for the opportunity to guest post!

    @Troy: as someone else pointed it out it will depend on where jurisdiction in regards to debt being passed on. However you can send them a cease and desists letter (i suggest registered mail) saying that you want them to stop calling you regarding the matter. They legally will have to stop calling you. Other than that I suggest speaking with consumer affairs agency in your jurisdiction.

    @Charles in Vancouver: For question 1 it will be Bell’s responsibility to resolve the matter, however if the charge was erroneous than request from the collection agency for proof of debt which they probably would not be able to provide you since the charge was is mistake.
    QUESTION 2: The company is required to notify the consumer at the LAST KNOWN ADDRESS which means the address you have given them last time. If you have moved and failed to notify them than it falls on you, if the mistake is on their end than you will need to speak with them to rectify the issue. However this maybe more complicated to resolve.

    @existingalalternitaves: Yes you are correct in regards to the debt being charged off, I should have stated that the post mainly applies to 3rd party collection and not 1st party.

    @paul: My point was in regards to calls demanding payment not in regards to resolving the issue. Collection agency can NOT call more than 3 times in a 7 day period, nor can they call outside of the times I have stated. before 8am and after 9pm week days, before 1pm and after 5pm on sunday and statutory holidays. I am not sure what part of the times you are disagreeing with.

  14. WestcoastFP on November 2, 2009 at 3:26 am

    I too had a short stint as a bill collector in University. You may be interested to know that most companies will settle for as little as 50 cents on the dollar. Whether or not you owe the full amount isn’t an issue. Most companies are just happy to have you pay anything.
    The previous point about about asking for further communication in writing is a good one. That is the law here in BC too.
    Of course, try to spend less than you earn, and over the long term you should be ok….

  15. cannon_fodder on November 2, 2009 at 3:07 pm

    I find it distasteful when I see US ads on TV about firms that help people eliminate high levels of debt for a fraction of the amount owed. It seems that they are implying that one can be absolved of almost all responsibility for previous commitments made.

    What type of message does that send to people? It could unfairly paint responsible people who have genuinely suffered as deadbeats and scam artists. I applaud companies for taking a stance where they try to be sympathetic to people who are in dire straits due to loss of income (unanticipated layoff, health reasons, etc.). But, I am sure there are other people who “pile on” by running up all of their credit cards with no intention to pay their bills hoping that they can settle for a fraction of the true cost.

    There will always be a victim and it is not guaranteed to be the right one.

  16. Canada Deals on November 2, 2009 at 4:08 pm

    Great post Ray! This is *valuable* info. Especially the list of all the things a collection agency can’t do ><

  17. thickenmywallet on November 2, 2009 at 5:34 pm

    This is a good post I learned a few things I didn’t know before.

  18. Briefcases on November 3, 2009 at 8:06 pm

    I wasn’t aware that there were all these rules for collection agencies. It’s good to be informed in case you do end up in a situation with them calling inappropriately. Luckily I’ve only had 1 minor incident with a collection agency, but I was able to pay the money.

  19. Victor A on November 8, 2010 at 11:36 pm

    Though all of the info above sounds great, what happens when Companies like Bell Canada cannot get their stories straight as to what you owe money for? When we canceled their ExpressVu TV satellite service we phoned them 36 days before the cancellation date as per our original agreement. They claimed I did not phone them as required: even though I have their confirmation number.

    When they realized they could not get me on that one, they changed the story and said that I was a month behind of my payments. I have bank records that show that I paid up to date, if fact I paid one month too much.

    When I sent them the bank statement they called back and changed their story again. This time they said the $225.00 that I owed was for a cancellation fee. At no time during our use of Bell ExpressVu was their any notice of any kind that stated that I was subject to a cancellation fee.

    Fortunately, I recorded all the phone calls with the Bell reps and have a voice record of them using three different reasons that I owe them money. Since that time, they have turned my account over to a collection agency who has phoned me twice. I very politely explained my story to the lady on the phone and she asked me to call Bell and to have them send me a written bill giving a reason as to why I owe them money. I was then supposed to get Bell to call the collection agency to give the final reason why I owed them money. I have refused. I feel that because I have a voice record that Bell used three different every excuse had at their disposal to penalize me for canceling my TV service, I will not be paying any amount what so ever to them.

  20. Humble Pie Eater on January 12, 2011 at 3:55 am

    Funny thing. Bell was ignorant to me a few times, I tried to cancel my service and was put on hold for 57 mins in total ( I was too bullheaded to let them win), until an automated message came on the line saying their system was experiencing issues and then hung up on me. So I, in my angered state, just refused to pay it. I think close to 2 years past when I wanted to give my reciever away but my friend couldn’t get it activated because Bell said the account needed to be cleared before they would let the reciever be used again. This would indicate that they still had control of the account. Anyway, I asked them for a number to contact an individual in collections, so they supplied it to me, transfered me even, where I was put on hold a while, then talked to a young woman who said she would again transfer me to the correct person, hold again, the same woman picked up again and asked me who I was on hold for a few minutes later. About a 45min call at this point, she put me on hold again, 5-10mins later, same woman picked up, asked me who I was on hold for, I told her again. She then responded that the person was current accupied so I asked if I could leave a message for them. That is correct, I LEFT MY NAME AND NUMBER WITH COLLECTIONS and they were too ignorant to ever return my call which was supposed to be 15mins following my conversation with the young woman.
    Moral. If you don’t get these things cleared up, one way or the other, they haunt your credit report forever! 3 years have past without a whisper from collections, the debt still shows on my report, and BANKS HATE UNPAID DEBTS…PERIOD! Try starting a small company up and ask a bank to back you even though you have a 3 year unpaid $215 debt to an ignorant service provider that you tried to pay to begin with but they wouldn’t let you. Clear your record one way or the other, or suffer indefinitely.

  21. Faillite on May 30, 2011 at 8:38 pm

    Another way to “handle” the debt collectors is to consolidate your debt and have the consolidation company deal with each one of your creditors individually. Not only will this take care of your debt collectors, but they will also manage to lower your debt.

  22. Wondering?? on November 5, 2011 at 7:15 pm

    Can a collector post on a public forum like Facebook yours and other peoples name and that you owe money to a certain merchant?? Is this legal?? It do not seem legal to make these statements public like this??

  23. BellCanadaSucks on November 6, 2012 at 3:29 pm

    Bell Canada owes me $3,378.01 due to an over payment on my account. They are refusing to refund as they tell me “we don’t do refunds”…or you will get a cheque in 3 weeks…or…a myriad of other stupid excuses. I’m taking Bell to Small Claims court in Ontario..and then I will list Bell Canada for collections or after judgement, seize their a Bell van parked on the road.

  24. Jimmer MCJimer on November 6, 2012 at 8:26 pm

    @ BellCanadaSucks – you are right out of control….. makes me wonder how you managed to “overpay” $3,378.01….

  25. BellCanadaSucks on November 6, 2012 at 8:53 pm

    @ Jummer MCJimer..Overpayment is easy. My wife automatically paid the same account each month, (online banking) same amount..after the account was paid and closed. We have since switched to Telusand better customer service, and not rude like Bell. I had a Bell employee yell and scream at me today when I called looking for my money. Unreal.

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