TRUTH ABOUT THIRD PARTY COLLECTION AGENCIES

TAKE CONTROL WITH COLLECTION AGENCIES
- Knowledge is Power
Everyone hits financial bumps in their lives from time to time. At these times you might hear from a third party collection agency (collection agency). We've heard of all types of stories related to collection agencies and their tactics to get money from their victims. If you've ever received a call from a collection Agency in Canada, you know that they're very painful to deal with! We hope that you don't have this displeasure very often.

After in depth research we've found out some interesting facts to help out those plagued with collection agency calls.

We try to get our clients to take the offence when dealing with collection agencies. You shouldn't feel like a bad person when they call you. The following are things you can do to take the offence and give yourself a little breathing room while you figure out what to do. Don't ever feel pressured to give collection agencies money on the first call.

Things to remember when you get a collection call.

1. You don't have any contract directly with a collection agency. Thus you don't have to pay them*.
   
2. Always ask for the licence of the collection agent and the collection agency. The agent and agency must both be licenced in your province or you don't have to deal with them by law. They must show you proof that they are licenced, don't take their word for it.
   
3. If the agency provides proof that they're licenced, the next thing you ask for is the following: You need to see the original contract that makes up the alleged debt that the collection agent is collecting. How can you pay something you don't have proof of? If somebody called me up asking for money and I had no knowledge of it, it wouldn't be prudent for me to pay for it.

There are NO LAWS stating that you must deal with a collection agency. This is not a well known fact. Thus, the only way you have to deal with a collection agency is by prior contractual agreement. This point was brought to my attention by the Ministry of Justice - Consumer Protection Branch in Saskatchewan.

PRIOR CONTRACTUAL AGREEMENT EXPLAINED - TRANSFER OF RIGHTS (OR SIMILAR) LANGUAGE
When you sign a contract with a lender the following (which is in non-legal language)should be required language in contract:

"TRANSFER OF RIGHTS - We (the creditor) may transfer, sell or otherwise assign all of our rights under this Agreement. If we do so, we may disclose information about you and the Account to anyone to whom we assign our rights."

Not all agreements have this wording or similar wording. If this type of wording is not in the original contract, you may not have to deal with third collectiona agencies".

IMPORTANT: Similarly, if the collection agency doesn't have permission to collect from you, they don't have permission to disclose collection items on your credit report. The only way that an item can be put on your credit report is with prior written authorization.

IN SUMMARY:
We feel that it is important to take control of a conversation with a collection agency instead of getting emotionally beaten up by them. There are things you can do to take control with a collection agency.

Please post questions or comments in our Discussion Forum - Collection Agencies section.

NOTICE TO READER: The above information is cutting edge and not well understood by creditors, collection agencies and government agencies. Please use extreme caution when using the above information for your own situation. We recommend consulting a lawyer or Ministry of Justice - Consumer Protection regarding your personal situation as all situations are different.

More about collection agencies in Canada