Failing to pay a debt can have serious consequences: you may be taken to court, your assets may be seized, funds might be taken directly from your paycheque and your credit rating could be adversely impacted. When you owe a debt, your creditor may use a collection agency (a third-party business acting on behalf of the creditor) to seek payment. While collection agencies in Ontario must be registered and are regulated under the Collection Agencies Act, it is important to know your rights when dealing with one.

Responding to a collection agency
Once you have been contacted by a collection agency, it is important to respond to them promptly. To avoid confusion, do not contact the original creditor.

If you agree with the amount owed and you can pay the debt, do so as soon as possible. If you are unable to pay it all at once, offer an alternative payment arrangement (such as monthly installments) that is suitable to both parties. If a payment arrangement is made, write a letter confirming it and include your first payment with the letter. Do not pay in cash, but with a method that will give you a record of the payment, such as by cheque.

If you do not agree with the amount owed, send a registered letter saying that you dispute the debt to both the original creditor and the collection agency. Do not make a payment or offer to pay. The collection agency is then prohibited from continuing to demand payment from you unless it obtains a court order to do so.

Your rights
A collection agency may not demand payment of a debt from you without express written authority from the company you owe the debt to, and without first notifying you of the agency's intention to collect a debt. This notice must be sent in writing to your last known address, and the collection agency cannot begin the collection process until six days have passed following the sending of the notice. The notice must contain the names of the creditor and the collection agency, the amount owed and the law that allows the collection agency to demand payment.

Under the Collection Agencies Act, a collection agency cannot:
- Collect additional charges to the debt owed
- Contact you more than three times in a seven-day period
- Call you on statutory holidays;
- Call you before 7 a.m. or after 9 p.m. Monday through Saturday, or before 1 p.m. or after 5 p.m. on a Sunday
- Contact another person regarding your debt unless that person has guaranteed to pay your debt, you have authorized the collection agency to contact that person or it is merely trying to obtain your contact information
- Contact your employer unless your employer has guaranteed to pay your debt, the collection agency has a court order or it is merely confirming your place of employment
- Use threatening, profane, intimidating or coercive language
- Use undue, excessive or unreasonable pressure
You should keep a record of contacts you receive from a collection agency, including the date, time and frequency of any calls.

Making a complaint
If a collection agency engages in a prohibited activity, you can send a complaint to the Ministry of Consumer Services, which will investigate and potentially charge the collection agency with violating the law. Penalties include suspension of the collection agency's licence, fines, or imprisonment. If the nature of collection agency phone calls is fraudulent or abusive, the collection agency may be criminally liable. As well, you may be able to sue the collection agency for damages.

For more information we encourage you to contact the Ministry of Consumer Services at ontario.ca/mcs or toll free at 1- 800-889-9768. In addition, you can find more information about consumer protection topics at any time in a series of Community Law School webinars archived online at yourlegalrights.on.ca/training-topic/consumer- law. Be empowered, and stay tuned.

This column is brought to you by Community Law School (Sarnia-Lambton) Inc., and Community Legal Services and Pro Bono Students Canada at Western University, with funding support from the Law Foundation of Ontario. It provides legal information only. The information is accurate as of the date of publication. Laws change frequently so we caution readers from relying on this information if some time has passed since publication. If you need specific legal advice, please contact a lawyer, your community legal clinic, Justice Net at 1-866-919-3219 or the Law Society Referral Service at 1-800-268-8326.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.