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Debt collection agencies

From: Innovation, Science and Economic Development Canada

A debt collection agency is a company that makes sure that money owed to a business, by a debtor, is repaid. If you have an outstanding bill with a business, they may decide to turn your account over to a collection agency.

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The role of a debt collection agency

A collection agency's job is to collect unpaid accounts. Companies hire collection agencies to collect on unpaid, past-due debts from individuals or other businesses.

Making sure that a collection agency is legitimate

If a company contacts you claiming to be collecting a debt, make sure you are dealing with a legitimate agency.

Take the following steps to protect yourself from potential fraud:

If you suspect that a fraudster has contacted you, report the incident to the Canadian Anti-Fraud Centre.

Dealing with a collection agency to repay your debt

Take your debts seriously. Leaving them unpaid long enough can result in legal action, which means that authorities can take money from your paycheque and/or seize your assets.

In most provinces and territories, a collection agency must notify you—in writing—when they take over your account. Once the account has been officially turned over to a collection agency, you'll be dealing exclusively with the collection agency to arrange for the repayment of the debt. The agency must contact you to attempt to recover the money you owe to its client (the business with whom you initially incurred the debt).

Tips for dealing with a collection agency:

After you've paid back the full amount owed, you will no longer have to deal with the collection agency.

For more information, visit the Dealing with a debt collector page on

Concerns about the actions of a collection agency

While rules vary across Canada, generally collection agencies are not allowed to:

If you have concerns about the actions of a collection agency, contact your provincial or territorial consumer affairs office.

Managing your debt

Make a plan to pay down your debt. Visit the Managing debt page on for help getting started.

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