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Consumer Affairs Tip Sheets

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Collection Agencies

Although businesses usually try to collect their unpaid bills or accounts themselves, if they are unable to they may turn to a Collection Agent.

Collection Agencies collect debts on behalf of others. They are usually paid a percentage of the debts they collect. They make money by getting people to pay up. The collection agents are often more persistent and demanding than the businesses who hire them.

All collection agents who work for businesses in the Northwest Territories have to be licensed by Consumer Services.

Common Law provides the following protection to consumers:

  • Collection agents may not suggest that a friend or relative is responsible for your debt. The agent cannot ask a friend or relative for money unless he or she was a cosigner for a loan.
  • Collection agents may not threaten to physically harm you, your family or your property.
  • Collection agents do not have the authority to take your household possessions if you do not pay your bill. Only a Sheriff, or some one authorized by a Sheriff, can attempt to take your possessions. And this may only occur after you have been sued and if the court has made a judgment against you. This does not apply to "time sales" or "rent-to-own" agreements made with a store. These people may be able to take action through the Sheriff more quickly.
  • Collection agents may not bring in the RCMP or send you to jail. The police do not get involved in debt collection.
  • Collection agents must get permission from the people you owe money to before they can take you to court.

There are ways that you can protect yourself too:

  • Keep track of how much money you have paid on your debts. When you make payments be sure to get a receipt or the cancelled cheques back.
  • If you are having difficulty paying your bills, DON'T IGNORE THE PROBLEM! Call the people you owe and ask if they can reduce your payments or give you more time to pay. This way they will know that you are trying and so they may not seek the help of a collection agent.
  • If you think the actions of a collection agent are questionable contact the Consumer Affairs Office immediately.

For more information, call collect or e-mail our Consumer Affairs Officer at MACA headquarters in Yellowknife at: (867) 873-7125.