Q - What is a collection agency?
Sometimes a creditor may use a collection agency to collect a debt if you have fallen behind in your payments.
A collection agency is a business that arranges for and obtains payment of money owed to another person or organization.
Collection agencies and collectors (person employed by a collection agency) must be licensed to carry out collection activities in Nova Scotia. Service Nova Scotia licenses and regulates collection agencies and collectors in Nova Scotia, under the Collection Agencies Act.
Q - Is a collection agency allowed to call me?
Yes, but the agency must first write to you and tell you that it has been hired to collect the debt.
Collection agents or collectors are hired by companies who want to collect money from you when you have not paid a bill.
There are rules they must follow when they are trying to collect the debt.
Q - What are the rules that a collection agency or a collector must follow?
A collection agency or collector must not call or talk to you until you have been notified in writing that they have been hired to collect the debt. When they contact you the agency or collector must tell you the agency's name, the amount you owe, and identity themselves and how they are authorized to collect the debt. They must first make sure that you owe the debt before they try to collect it.
The agency or collector must not:
- Make collect calls to you;
- Contact you if you have written telling them to contact your lawyer;
- Use documents, notices or letters which are made to look like court forms;
- Pretend to represent the police or sheriff;
- Threaten you or use abusive or intimidating language;
- Harass you or your family, for example, by calling every 15 minutes;
- Try to collect the debt on a Sunday or any day before 8:00 am or after 9:00 pm;
- Give misleading information or try to make things difficult for you at work.
The agency or collector may:
- Contact your family, friends, neighbours, employer, or anyone else, but only to try to get your address;
- Collect the debt, but not any additional amount.
- Sue you if the creditor has assigned the debt to the collection agency in writing and you have been notified of the assignment.
Q - Can the collection agency contact my family, friends or employer?
Yes, but only to get an address for you.
Q - What can I do if I believe a collection agency or collector broke the rules?
First, see if you can complain to the supervisor or manager of the collection agency to resolve the problem. Otherwise, you can complain to Service Nova Scotia and Municipal Relations. You may contact Service Nova Scotia through ACCESS Nova Scotia toll-free at 1 800 670-4357 or 424-5200 in the Halifax Regional Municipality, or visit http://www.gov.ns.ca/snsmr/consumer/. In the most extreme cases, a collection agency's license can be suspended or cancelled.
You may also wish to get legal advice.
Q - What options do I have if I am contacted by a collection agency?
- Ask for a written statement of what you owe, including any interest or late payment charges;
- If possible, pay the money you owe. Note that the agency is not allowed to collect more than the amount you owe and cannot charge you for its costs to collect the debt. However, interest can continue to build up on an outstanding debt;
- If it is impossible for you to pay the full amount right away, explain why. You may suggest some alternative method of repayment, either a lump sum at a later date or a series of monthly payments for example;
- Never send cash and always make payments in such a way that you have a receipt - such as payment online, a money order, a cancelled cheque from your bank or a receipt from the agency;
- If you do make an agreement with a collection agency, make sure it is in writing;
- You may want to look at the Collection Agencies Act and the Consumer Creditors Conduct Act
- Contact a lawyer. Nova Scotia Legal Aid offers brief legal advice on credit and debt issues for those who qualify for Legal Aid, or contact a lawyer in private practice
- Contact a credit counsellor about your financial situation.
Q - Can a collection agency take me to court?
Yes, if the creditor assigns, that is sells, the debt to the collection agency, the agency can sue you in court. There are limits on the length of time a creditor has to sue on a debt, so you should find out how old the debt is.
If you receive a Notice of Claim (Nova Scotia Small Claims Court), a Notice of Action on a Debt (Supreme Court of Nova Scotia), or any other court document, you should contact a lawyer.
Q - Who can I talk to about my financial problems?
Contact a credit counsellor. Service Nova Scotia offers a Debtor Assistance Program - www.gov.ns.ca/snsmr/access/individuals/debtor-assistance.asp#debto. You can contact Service Nova Scotia through ACCESS Nova Scotia toll-free at 1 800 670-4357 or 424-5200 (HRM), or online at http://www.gov.ns.ca/snsmr/life-events/managing-your-finances.asp .
There are various credit counselling services listed in the yellow pages of the telephone book under 'Credit and Debt Counselling Services', or available online.
The federal Superintendent of Bankruptcy also has helpful information for dealing with debt - http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01861.html.