What you need to know when collection agencies come calling
Credit Counselling Services of NL explains the rules for debt collectors
The executive director of Credit Counselling Services of Newfoundland and Labrador says there are some tips to keep in mind when dealing with a debt collector.
Here's The Lowdown from Al Antle about rules for collection agencies.
Newfoundland and Labrador has its own set of rules about how — and how often — a collection agency can contact someone.
According to Service NL, a collection agency can't call a person until it has sent a written notice, including the name of the person or business to which the individual owes money, and the amount owing.
Collection agencies are also not allowed to contact you between the hours of 10 p.m. and 8 a.m.
Antle said these agencies can't contact you at work, or call your employer without your approval.
"As consumers, we need to be careful, because, as we return their phone call, we may say: 'Call me on [my work number],'" he said.
"So I, in effect, have given them permission to call me at work."
If a collection agency does contact your work, you can alert Service NL, and the department will remove that phone number from the agency's files.
The rules state that a collection agency also can't contact your relatives, neighbours, or friends — unless it's to obtain a mailing address, or if that person is a co-applicant or co-signer of the debt.
An agency also can't leave messages at telephone numbers other than your own.
Defining harassment
There are also rules about how often a collection agency can contact someone.
In Newfoundland and Labrador, an agency can't call a number of times, to the point that it would be considered harassment.
"That's probably one of the greyest areas in the whole piece of legislation, because what is harassment?" asked Antle.
"You may perceive harassment to be a phone call at 9:15 a.m., and another one two days later at 10:15 a.m. That's two calls in one week. [As a collection agency,] I may consider that to be absolutely ineffective, because you owe me money, and I want my money now."
There are also provincial regulations in place about what the agencies are allowed to say to someone. They can suggest that a person find other ways to pay their debts, or combine debts into one payment — but can't force an individual to seek other funding.
According to Service NL, collection agencies are also not allowed to use coercive language, or threaten job loss or legal action against you.
The collection agency can act on the creditor's behalf, but only the creditor can take you to court, and assets can only be seized through a court order.
Antle suggested that someone with questions about potential harassment from a collection agency should contact the consumer affairs division of Service NL.
"[They have] the investigative powers to tell you whether or not you're being harassed, and in fact can get the collection agency to leave you alone and to stop harassing you," he said.
Deficiency balance
Antle said he will often see clients returning to the Credit Counselling office months after settling a debt with a collection agency.
He used the example of a consumer who owes an agency $3,500, and the agency said it would instead settle that consumer's debt for $2,000.
"Very frequently, we will see the same consumer back in our office 18 months, 24 months later, because now, another collection agency is calling them for the deficiency balance," he said.
"So if settling is an option, you need to be absolutely clear with the agency, and the agency with you, that: 'This is it. You're done. You're actually settling this.'"
Reaching out for help
Antle said if you are having a tough time with a collection agency, it doesn't hurt to reach out and get some help.
"If you feel the collection agency is giving you an unreasonable time, if they're making unreasonable expectations — call... consumer affairs. Call Credit Counselling," he said.
"This is what we do: negotiate deals with these organizations."
The Lowdown is a series from CBC NL Investigates about consumer news you can use. If you have a story idea, email us: cbcnlinvestigates@cbc.ca.
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