Dealing With Debt Collectors In Alberta

Under Alberta’s Consumer Protection Act, all collection agencies and their collectors must be licensed through Service Alberta. You have the right to know who is contacting you, who they are collecting for, and their license information. Collectors must be upfront about who they are, and cannot misrepresent themselves as lawyers or police, or give you otherwise misleading information.

According to Section 12 of the Collection and Debt Repayment Practices Regulation:

• Collectors cannot contact you before 7:00 a.m. or after 10:00 p.m.
• They cannot contact you more than three times in a seven-day period unless you agree to more frequent contact
• They cannot otherwise call or email you “excessively”

Collectors may contact:

• You directly
• A guarantor or co-signor of the debt
• A representative you have authorized them to contact (e.g., a lawyer or Licensed Insolvency Trustee)

They may contact a friend, neighbour, or employer only to confirm your phone number or address (or in in the case of your employer, to confirm your employment status for the purpose of taking legal action). They are prohibited from discussing the details of your debt with these individuals under Section 118(1)(b) of the Act unless you authorize them to talk to those parties about it.

Collectors are prohibited from:

• Contacting you at work if you have asked them not to and you make other arrangements to speak with them and follow through
• Using threatening, intimidating, or abusive language, using undue, excessive or unreasonable pressure, or otherwise contacting you in a manner that constitutes harassment
• Threatening legal action they cannot lawfully take
• Continuing to contact you or attempt to collect from you if you have advised them that the debt is in dispute and you wish them to take the matter to court
• Adding extra fees or charges beyond what is legally owed (unless awarded by a court or permitted by your original credit agreement)

Collectors must stop contacting you in several situations:

• When you have advised them that you have appointed a representative to handle the matter and the representative follows through in dealing with them
• When you are enrolled in an Orderly Payment of Debts (OPD) program
• When you have advised them that the debt is in dispute and you wish them to take the matter to court
• When a Consumer Proposal or Bankruptcy is filed, creating a stay of proceedings. After this, they must deal with the Licensed Insolvency Trustee.

It’s also important to know that under Alberta’s Limitations Act, most creditors have two years from when they became aware of a claim to sue for a judgment. After that period, they can still ask for payment but cannot enforce it through the courts - it is "statute-barred". However, you may inadvertently restart the clock by making a payment or otherwise acknowledging the debt, so you must keep this in mind when dealing with debt collectors. If you decide to tell a collection agent (or the creditor themselves) to stop calling you and instead take court action - knowing that they can't sue because the debt is statute-barred - you still would need to defend yourself if they nonetheless try taking you to court.

As you can see, there are several things that collectors can or cannot do based on what you say to them (you'll notice we’ve highlighted those in blue). Therefore, knowing these rules will help you figure out what to say when they call. In other words, knowledge gives you tools to protect your rights and reduce unnecessary stress while you decide your next steps.

What to Do If a Collector Breaks the Rules

Violations of the Consumer Protection Act can be reported to Service Alberta’s Consumer Investigations Unit. Alberta’s Director of Fair Trading then has several tools for enforcing the rules.

If you have filed a Consumer Proposal or Bankruptcy and are still receiving calls, you can also contact your Licensed Insolvency Trustee to see if they can help.

Debt collectors in Alberta must follow strict rules designed to protect you from harassment and unfair treatment.  And if you make an insolvency filing under the Bankruptcy and Insolvency Act (BIA), this federal law overrides provincial rules and immediately stops all collection calls, letters, and legal actions from unsecured creditors. (It also freezes wage garnishments and bank account freezes.)

If calls are causing stress, know that options are available to bring them to an end—and help you start fresh.

If debt has reached the point where collectors are calling regularly—or legal action is a real possibility—it may be time to speak to a Licensed Insolvency Trustee.

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the Alberta region. We regularly help individuals consider their options for dealing with overwhelming debt. If you'd like to explore these options, please reach out to us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.