Many people explore the convenience of Canadian online loans to access quick and efficient financial assistance for unexpected expenses or emergencies. At FlexMoney, our goal is to ensure a smooth borrowing process because the last thing you need during financial limitations is more stress.

But when you rely on borrowing money, facing financial challenges is a common experience, and many Canadians deal with debt at some point in their lives. When debts go unpaid, it’s not uncommon for creditors to enlist the services of collection agencies to recover the funds owed. However, as a consumer in Canada, it’s crucial to be aware of your rights and understand the limitations of collection agencies.

Use the following guide to learn about the role of collection agencies, Canadian debt collection laws, and what these agencies can and cannot do in Canada.

What Is a Collection Agency?

A collection agency is a third-party entity creditors hire to recover outstanding debts. These agencies operate independently from the original creditors, specializing in tracking down debtors and persuading them to repay the amounts owed. Collection agencies may purchase the debts from creditors or work on a commission basis, earning a percentage of the recovered amount.

What Are the Canadian Debt Collection Laws?

Canadian debt collection laws are designed to protect consumers from harassment and unfair practices by collection agencies. Canada’s primary legislation governing debt collection is the Collection and Debt Settlement Services Act (CDSSA). This law regulates the conduct of collection agencies and sets forth guidelines to ensure fair treatment of debtors.

Under the CDSSA, collection agencies must be licensed to operate in provinces like Ontario, British Columbia, and Alberta. Licensing requirements vary by province, but agencies generally must adhere to strict ethical standards and follow prescribed procedures when collecting debts.

What Can Collection Agencies Do in Canada?

While collection agencies play a crucial role in debt recovery, they are bound by legal constraints in Canada. So, a common question borrowers often have is, what can a collection agency do to me in Canada? Here are some actions that collection agencies can legally take.

Contacting the Debtor

When you apply for FlexMoney’s easy Canadian online loans, you will find that we offer reasonable terms to help you better manage your debt. However, if you default and the debt reaches debt collectors, collection agencies can communicate with you.

Collection agencies are permitted to communicate with debtors to discuss outstanding debts, so people often wonder, can a debt collector call you every day? In Ontario, a debt collector cannot contact you more than 3 times in 7 days without your consent.

Negotiating Repayment Plans

Collection agencies may negotiate repayment plans with debtors to facilitate the settlement of outstanding debts. This can involve agreeing to lower monthly payments or a lump-sum settlement.

It’s essential that you carefully negotiate repayment plans, especially if you are dealing with multiple loans simultaneously. Some people make the mistake of taking on too much debt simultaneously and have trouble repaying them promptly.

Reporting to Credit Bureaus

Collection agencies can report the delinquent debt to credit bureaus, which can negatively impact the debtor’s credit score. Unfortunately, this can affect your loan eligibility in the long run, especially if you apply for a large loan.

Legal Action

If other methods fail, collection agencies may pursue legal action to recover the debt. This could result in a court judgment against the debtor.

What Can’t Collection Agencies Do in Canada?

While collection agencies have a role in recovering debts, there are strict regulations in place to protect consumers from harassment and unfair practices. Understanding what collection agencies cannot do is crucial to knowing their permissible actions.


Collection agencies cannot harass or use threatening language when communicating with debtors. This includes frequent and excessive phone calls, abusive language, or any form of intimidation.

Contacting Third Parties

Collection agencies are restricted from disclosing details about your debt to third parties, such as family members, friends, or employers, except to obtain or confirm your contact information. They must handle your personal information with discretion.

Contacting During Restricted Hours

Collection agencies should not be contacting you at inconvenient times. Hence, a question that often arises is, can creditors call you multiple times a day, and can collections call on Sunday?

Generally, the permissible hours for communication are usually between 7 a.m. and 9 p.m., local time, Monday to Saturday, and between 1 p.m. and 5 p.m. on Sundays.

Attempting to Collect Expired Debts

As someone learning about your rights, it’s essential that you seek the answer to a common question: how long can collections come after you?

Once the limitation period for a debt has expired, collection agencies cannot attempt to collect it through legal action. They are also barred from restarting the limitation period through specific actions, such as acknowledging the debt.

Adding Unauthorized Charges

When people fall short of emergency funds or need quick access to cash, they seek emergency loans with a quick application process. Emergency loans can benefit people who need to cover unexpected expenses, but sometimes, they can lead to people forgetting to make payments.

If continuous non-payments go to debt collectors, people often wonder if collection agencies can take money from your bank account in Canada.

Collection agencies cannot add unauthorized charges or fees to the original debt unless explicitly allowed by the original credit agreement.

How Should You Deal with Collection Agencies in Canada?

Dealing with collection agencies can be stressful, but consumers have rights protected by law. Here are some tips on handling interactions with collection agencies in Canada.

Know Your Rights

Before getting a loan in Canada, you must ensure you can make prompt payments to avoid financial difficulties in the future. However, we understand that economic uncertainties can often alter things and make it difficult for some borrowers to repay their loans on time.

If debt collectors get involved, take the time to familiarize yourself with the CDSSA and other relevant provincial regulations to understand what collection agencies can and cannot do.

Request Written Communication

You have the right to request that all communication be in writing. This can help create a paper trail and prevent harassing phone calls.

Verify the Debt

If you’re uncertain about the legitimacy of the debt, you have the right to request written verification from the collection agency. They must provide details about the debt and the original creditor.

Confirming that the debt collection agency is legitimate to protect yourself from potential fraud is equally essential.

Negotiate Repayment Terms

One of the benefits of personal loans through FlexMoney is the flexibility we offer. We provide a streamlined application process, reasonable income minimum requirement, and affordable payments and loan terms ranging from six months to five years.

But if you can still not pay the total amount, try negotiating a repayment plan that suits your financial situation. Collection agencies are often willing to work with debtors to recover at least a portion of the debt.

Seek Legal Advice

Seek legal advice if you feel that a collection agency is violating your rights or engaging in unfair practices. There are avenues to dispute and resolve such issues. In some cases, we recommend looking into debt consolidation to reduce stress and regain control of your finances. However, since everyone’s situation is unique, it’s essential that you only take this route if it suits your financial situation.

Debt Collection FAQs

Here are some frequently asked questions about debt collection in Canada you should know the answer to.

How Long Can Debt Collectors Try to Collect in Canada?

The limitation period for collecting a debt varies by province in Canada. In most provinces, the limitation period is two to six years, starting from the date of the last payment or acknowledgment of the debt. Once this period expires, the creditor or collection agency loses the right to sue for the debt.

To avoid extending the collection process and reduce stress, it’s essential to make a payment plan ahead of time and inform the debt collectors. This will help you take better control of your finances and can also improve chances of loan approval in the future.

Can Debt Collectors Call Your Work?

In addition to wondering how many times a loan company can call you in a day, people also wonder if debt collectors can call your work. Collection agencies can contact you at your workplace, but they must be discreet and avoid disclosing details about the debt to your employer. If you prefer not to be contacted at work, you can inform the collection agency in writing, and they must respect your request.

Can Collection Agencies Charge Interest in Canada?

When you borrow money, you likely find the best loans online and ensure that the lender offers you reasonable rates. The last thing you want is to end up paying extra money, so you may wonder, can collection agencies charge interest in Canada?

In Canada, collection agencies cannot unilaterally add interest to the original debt. However, if the original credit agreement allows for the charging of interest, the collection agency may attempt to collect the interest as part of the total amount owed.


Understanding your rights when dealing with collection agencies is essential for navigating debt repayment challenges. While collection agencies have legitimate means to recover debts, they must operate within the confines of Canadian debt collection laws.

By being aware of the regulations and guidelines in place, you can engage with collection agencies on your terms and work towards a fair and reasonable resolution of your financial obligations.