Think before you write that cheque and dole out money to a debt collector. It’s a dog eat dog world and it doesn’t hurt to be cautious.
1. Is it an official Collection Agency?
Ordinary, you won’t have a thug banging down your door and asking you to pay a debt; that only happens in films. Whoever contacts you from the collection agency should be asked to show some identification and a Collection Agency License. If they don’t have one on them, you can ask them to return back later with it and ask you about the debt.
2. Is it my Debt?
Confirm that it is your debt that the collection agency wants to collect. Don’t take it for granted that the debt is yours. It’s not unknown for the collection agency to make such a mistake. Go through your own documents, get a Credit Report and verify it. Also, ask the Debt Collection agency to verify if it is your debt.
3. Did I Get a Notice?
Before a Collection Agency can call you up, they should send you a notice in advance. A notice contains the name of the creditor, the debt amount owed, the name of the collection agency and its authority to demand the payment. Most provinces have regulations in place which makes this a standard practice. If you get a call without a notice, ask the collection agency to send one before both of you talk about debt.
4. When do they Call me?
The collection agency just can’t call you anytime. Most provinces have rules in place when a collection agency can contact you.
– Alberta: You can only contact you between 7:00am and 10:00pm.
You can’t be contacted on Sundays and statutory holidays.
5. Do I want them to stop Calling?
Calling you often is one harassment tactic which collection agencies use. A collection agency can’t call you more than three times within 7 consecutive days. If they do, you can threaten action against them such as filing a report with the agency or taking them to the Consumer Court.
6. Has the Statue of Limitation Expired?
The Statue of Limitation is the time period which a debt collector can legally sue you. In most of Canada it is two- six years, however, just because there can be no legal action, doesn’t mean you’re off the hook. The collection agency still has the job of collecting the debt.
7. Do I Pay the Debt?
If the debt is yours, you cannot ignore it. Paying back the debt will take a lot off your hands.
8. How do I Pay it back?
There are various ways you can pay it back, but unless you have a large bank account, you’ll have to negotiate with the debt agency. A good Debt Consultant will guide you to restructure your finance and come up with a payment plan which acceptable by the debt agency.
So, take stock of everything when a collection agency contacts you.
