Debt collection in Canada: What collectors can and can’t do

When bills go unpaid, that’s when the calls from creditors can start. At home, at work, by phone or mail—they’ll reach out in every way they can to get you to pay.

Debt collectors are obligated to follow specific rules about how they make contact and what information they can request; however, many Canadians aren’t sure where the line is between legal collection practices and harassment.

Knowing these rules and what rights you have can turn a stressful situation into something you can handle with confidence. In this article, we’ll explain what debt collectors are allowed to do, red flags to watch out for, and steps you can take to protect yourself.

Why debt collectors are calling you

If a debt collector is contacting you, it usually means your account has passed the stage where the original lender can recover the money themselves. In Canada, creditors such as banks, credit card companies, and utilities typically begin with their own internal collections department when payments are missed. These internal teams are still considered debt collectors and must follow the same legal standards governing communication and conduct.

Ideally, this is the stage where you should engage with the creditor, since resolving the issue early can prevent it from being transferred or sold to an outside collection agency. Typically, accounts are sent to external collections after about 90 to 180 days of non-payment. Once a debt reaches a third-party collection agency, that agency becomes your main point of contact—which explains why calls may start even if the original creditor has stopped reaching out.

Understanding how this process works can help make the situation less overwhelming. “When you know who is contacting you, why they’re reaching out, and what your rights are, it’s easier to respond calmly and avoid being pressured into decisions that aren’t in your best interest,” says Craig Stewart, certified Credit Counsellor at Credit Canada.

What debt collectors can do in Canada

Debt collection rules vary by province; however, all collectors are required to follow Canadian consumer protection laws. Here is what they are permitted to do:

• Contact you by phone, email, or mail: Collectors can reach out using standard communication methods, as long as they follow provincial limits on how often they can contact you.
• Call only during permitted hours: Collectors can only call during certain hours, generally 7 a.m. to 9 p.m. Monday to Saturday, and 1 p.m. to 5 p.m. on Sundays (except for holidays). The rules vary by province.
• Ask you to repay a legitimate debt: They are permitted to explain the amount you owe and discuss possible repayment options, as long as the information is accurate and the communication stays professional. They cannot mislead or pressure you to pay.
• Contact your employer for limited reasons: Collectors can call your current employer to confirm your employment status, job title, or work address, but they cannot discuss your debt with your employer.

What debt collectors cannot do (this is harassment)

Even though debt collectors are permitted to contact you, Canada has firm limits on how they can behave. If a collector crosses the following lines, it’s considered harassment and, in many cases, a violation of provincial law. “Understanding these rules helps you know your rights and navigate the situation without feeling intimidated,” says Stewart.

Here’s what collectors are not allowed to do:

• Threaten, intimidate, or use abusive language: Collectors must speak respectfully and cannot yell, insult, or make illegal threats.
• Contact your friends or family about the debt: They are not allowed to discuss your debt with anyone except you, your spouse, or a co-signer. 
• Call excessively or outside permitted hours: Repeated calls meant to annoy or pressure you are not allowed, and collectors must follow provincial calling times.
• Misrepresent who they are: A collector cannot pretend to be a lawyer, a government official, or law enforcement. They must clearly identify themselves and the agency they work for.
• Add unauthorized fees: Collectors cannot tack on interest, penalties, or collection fees unless the original contract or provincial law allows it.
• Pressure you to borrow money: They cannot encourage you to take out new, high-interest loans to pay off old debt.

If a collector engages in any of these behaviours, it is considered harassment and you have the right to file a complaint or seek help from a non-profit credit counsellor.

How to take back control when dealing with a debt collectors

Dealing with debt collectors can be stressful, but there are steps you can take to stop the calls and regain control.

Step 1: Confirm the debt is legitimate

Always ask the collector to provide details in writing, including the original creditor, amount owed, and how it was calculated. Check your credit report to verify the debt, and do not make any payments until you’re sure it’s valid. “Always ask for the debt in writing before paying anything. Sometimes people are contacted about old debts that have already been paid, or even mistakes on their credit report,” says Stewart.

Step 2: Keep a record of all interactions

Write down the dates and times of calls, the names of callers, the agency they work for and what was discussed. Maintaining a detailed record can help if you need to challenge the debt or file a complaint.

Step 3: Engage early to explore repayment options

If the debt is still with the original lender’s internal collections department, engaging early often gives you more flexibility. You may be able to:

• Set up a payment plan that fits your budget
• Negotiate a lump-sum settlement

Different creditors have different guidelines for what they will accept on an account in collection, but you may be surprised at how willing some creditors and collection agencies are to settle for a reduced amount. Your options will ultimately depend on the creditor, the age of the debt, and whether it has been transferred or sold to a collection agency.

When negotiating, explain your current financial situation and offer a payment that works for your budget—the shorter the term and higher the payment the more likely they are to accept your offer. Remember to always get any final agreement in writing

Step 4: Set boundaries and stop harassment

You have the right to request that collectors only communicate with you in writing. In many provinces, you can also ask them not to contact your workplace. Clear boundaries make it easier to manage interactions with debt collectors so you don’t feel pressured.

If a collector keeps calling or becomes aggressive, you can send a formal request (sometimes called a cease-and-desist letter) asking them to stop contacting you by phone. In Canada, you have the right to ask that all communication be in writing only, and once the collector receives that written request, they must stop calling you. You’ll need to send the letter to the collection agency or creditor handling the file, include your mailing address and any account or reference number, and keep proof of delivery. 

This can limit unwanted calls, but it does not erase the debt or prevent the collector from sending written notices and pursuing repayment through legal channels.

Step 5: File a complaint if needed

If a collector keeps calling after your written request, engages in harassment or breaks the law, you can report them to your provincial or territorial consumer protection office.

When debt collection crosses the line into fraud

Many don’t think to question whether a debt collector is legitimate, but scams that mimic collection agencies have become more common. These fraudsters rely on fear, urgency, and confusion to push people into paying money they don’t actually owe.

A major red flag is any request for unusual payment methods. Real collectors never ask for gift cards, cryptocurrency, or untraceable payments, and they won’t threaten arrest. In Canada, you can’t be arrested for falling behind on a consumer debt, so anyone who says police action will follow is not legitimate.

Scammers may also try to collect personal information that’s not required. A real collector never asks for your Social Insurance Number (SIN) to verify a debt. Scammers also create intense pressure by insisting you must pay immediately to avoid serious consequences. While legitimate collectors can discuss payment arrangements, they cannot demand instant payment.

If anything feels off, trust your instincts—don’t share personal information or send money. Instead, take a moment to verify the agency and check for known scam tactics through the Canadian Anti-Fraud Centre.

“A lot of people worry about ignoring calls, but reacting too quickly without verifying the debt can lead to unnecessary payments,” says Stewart. “Slow down, confirm, and then decide on the right course of action.”

How a non-profit credit counsellor can help

Seeking help with debt is completely normal and nothing to be ashamed of. Non-profit credit counselling agencies, like Credit Canada, offer free, non-judgemental advice to help you better understand your finances and figure out practical next steps.

Credit counsellors can review your finances and help you repay debt or rebuild your credit by creating a plan that’s tailored to your situation. They provide actionable guidance so you can make informed decisions while managing collections. “Many Canadians hesitate to ask for help, but it’s actually a smart way to understand your options and get back on track,” says Stewart.

Know your rights and take action

Dealing with debt collectors can be stressful, but you don’t have to face it alone. Knowing your rights and taking clear steps—including verifying the debt, keeping detailed records, and setting boundaries—gives you control over the situation.

FAQs

Read more about debt:

• Managing debt to build wealth
• The MoneySense guide to debt management: How to get out of debt
• What’s the best way to pay down debt?
• Should I use retirement savings to pay off credit card debt?

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