Debt recovery refers to collecting debts from individuals or businesses. In Canada debt recovery regulation is established by provinces or territories. Collection agencies have legal status and are hired by service-provider companies to collect on their behalf.
Canadian Regulations
Canadian regulations regarding debt recovery apply to collection agencies and they establish rules about calling debtors, the times, the number of calls per week and the situations when mailing correspondence is necessary. Collection agencies must notify the debtor in writing about the account in collections, the creditor and the amount owed. Recovery agents are allowed to call the debtor once a day every day except on Sundays and on statutory holidays.
Collections and Creditors
Some collection agencies act on behalf of the creditor for a fee (usually around 25 percent of the debts owed). Other agencies buy the debt from the creditor for a small percentage of the debt and then collect the full amount from the debtor. The creditors are banks, credit card issuers, retailers, telephone companies or other service providers.
Bad Collection Practices
Collectors must not make frequent calls that can be considered harassment. They are not allowed to make charges or threats and they must not continue to contact a debtor except in writing or through the debtor's lawyer if the debtor has notified the collector about that.
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