Canadian Collection agency fact vs fiction..

An old gem...

This motivates me to add a new section to my credit repair ebook that deals with collection agencies ...

Canadians need to know the facts when dealing with collection agencies in Canada.

The right to collect the debt belongs to the creditor as does there right to hire an agency to do so.

Agencies do not have to have your authorization to report a third party collection. As members of a reporting agency, we have the right to do so. I suggest you become more familiar with the Collection Agencies Act which explicitly states what we can and cannot do.

>>Companies do not have to have your permission to send you to collection.

Under PIPEDA The Personal Information Protection and Electronic Documents Act (PIPEDA) , this is a correct statement.

However that doesn't give the collection agency the right to collect the debt. There is no law that says a person has to deal with a collection agency. Thus the individual must agree to the creditor using a third party collection agency in the contract.

I have seen many contracts that do not authorize the creditor to use a third party collection agency.

As well, the individual needs to give consent to a collection agency before they can transfer the individuals personal credit information to the credit bureau. This could be in the transfer of rights clause with the creditor, if one exists.

The onus is on the collection agency to show the individual proof that they have written authorization in a contract from the individual to collect them. Otherwise, the individual doesn't have to deal with the collection agency.

If the individual doesn't receive this proof from the collection agency or the creditor, they should complain immediately in writing to Consumer Protection and to the Privacy Commission's Office.

Where as the original debt was started with a contract, everything else that is executed relative to the contract must be agreed to in the contract.

I work for a collection agency and am actually glad to see a site like this working for people. I am well aware that there are many agencies out there who do the things that people here are accusing. Many of you are correct in wanting to be treated differently and to know your rights when it comes to dealing with collection agencies. I would caution everyone not to believe everything that is written here. Many of the things I have read are incorrect.

Collection Agencies are governed by the Ministry of Consumer and Business Affairs under the Collection Agencies Act. Under this act, anyone acting as a third party agency and/or collector, must be licensed to do so. You have every right to request a Company and Collector License number in order to validate them calling and the legitimacy of the agency.

Companies do not have to have your permission to send you to collection. They have every right within a valid contract to collect on that contract. It is also standard practice for Agencies to report third party collections to your credit file and are doing so as members under the Consumer Reporting Act. You can sometimes avoid this happening by dealing with the issue as quickly as possible.

Hope this helps!