Thanks Millie for that comment, it's also talked about in my article.

The right to offset is limited to debts to the same financial institution. If I don't pay my BMO Mastercard then they can take funds from my BMO bank account. As far as I know there is no legal way for a non-related creditor to just take funds without a judgment. They can do it only because banks don't check if the transaction is authorized.

Actually its very common for creditors or collection agencies to take (offset) money from your bank account without your permission.

And you don't need a judgment in place to do it.

Check out this article I posted a while back for more info on why: http://www.totaldebtfreedom.ca/articles/article_7.htm

Hope that helps you understand why.

I know banks have refused to open accounts for people with bad credit -- if they are allowed to or not it is policy at some banks.The argument can be made that someone with bad credit is a fraud risk.

Interesting note: I think it is a myth that one of the big five can refuse to open a personal bank acct for someone if their credit is bad.

FCAC regulations stipulate specifically when an account opening can be refused and bad credit / bankruptcy is not one of them. Instead:

When Can a Bank Refuse to Open a Personal Bank Account?
A bank can legitimately refuse to open a personal bank account for you if:
◆ the bank has reasonable grounds to believe that you'll use the account to break the law or commit fraud;
◆ you've committed a crime or fraud against a financial institution during
the past seven years;
◆ it has reasonable grounds to believe that you intentionally provided false
information when you opened the account;
◆ it has reasonable grounds to believe that opening the account would
expose its employees or customers to physical harm, harassment or
abuse;
◆ you do not agree to let the bank verify if the four circumstances
mentioned above may apply to you and to verify the pieces of
identification that you present to the bank; or
◆ you can't provide acceptable identification.

http://www.fcac-acfc.gc.ca/eng/publications/Rights/PDF/NewBankingRights-eng.pdf page 8

Doesn't apply to credit unions however. On this point I know personally.

If the payment plan was according to a court judgment and she missed even one payment that was agreed upon in court or in mediation and the C/A had that judgment to seize assets in her account, then yes. It would take some time, however, so the question is whether she paid all of her payments, was her payment schedule in accordance with a court ordered plan, and if she did miss a payment, when was it missed and how many were missed.

Otherwise, absolutely not.

Ditto what Millie said. NEVER let a C/A know your banking info. Each bit of information they garner from you will be used against you.

You didn't mention anything about a judgment so I'm going to assume there wasn't one. Obviously with a judgment they can move to seize assets including funds in a bank account.

Without a judgment the answer is no. That though doesn't stop them from doing so. Banks don't actually check to confirm that companies making automatic withdrawals actually have permission to do so. The reasoning is that 99.999% of the time they do and that it is easier to deal with the rare case where someone does something like this than require every ETF be supported by documentation.

The way to avoid this is to not allow sketchy collection agencies to get your banking info. Instead set up a bank account at a different institution and use it to pay them always keeping no funds other than what you intend to give them in the account. If your credit is too shot to get a new bank account then pay with money orders / drafts rather than personal cheques which carry way too much information.

Curious, was there a written payment schedule in place; one that was authorized by senior staff at Metropolitan? If so, then perhaps there might be a legal avenue worth investigating?

I forgot to mention that she is dealing with Metropolitan collectors....anybody have any experience with them?

My daughter was making regular payments to a collection agency. Today, when she was going to pay some other bills, she found she had not one penny left in her account. Can collection agencies do that??