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On this website we use the term bill collectors to include five distinct categories of firms that might be calling a consumer demanding payment with respect to an outstanding account.

Bill collector issues

  • original creditor
  • collection agency
  • collection lawyer
  • debt buyer
  • pure debt buyer

Collection lawyer:

Some lawyers engage in a variety of activities that can be described as collection work.  As a general rule, lawyers doing collection work are exempt from the obligation of complying with provincial and territorial law regulating collection agencies.

Collection lawyers, however, must comply with the rules of professional conduct governing lawyers in a particular province or territory.  Furthermore, lawyers doing collection work must comply with relevant federal law regulating collection activities.

Debt buyer:

A debt buyer is a firm that purchases outstanding accounts.  A debt buyer may use its own collection staff to attempt to collect delinquent accounts or it may outsource the work to a collection agency or a collection law firm.

It is helpful to think of two distinct categories of debt buyers:

collection agencies:   In Canada it is common for collection agencies to purchase delinquent accounts.  However, the primary source of revenues for a collection agency is third party collections--collecting debts belonging to others on a commission basis--and not revenues generated from collecting debts purchased by the collection agency.

pure debt buyer:   A pure debt buyer does not collect any unpaid accounts on behalf of another entity.  A pure debt buyer restricts its activities to purchasing debts.

‚ÄčOriginal creditor:  

The original creditor is the firm that actually provided goods, services, or credit to a consumer.  The phrase first party collections refers to collection calls made to a consumer by employees of the original creditor.

Collection calls and written demands for payment made by an original creditor attempting to collect monies owing to it must comply with any relevant federal law regulating automated telephone messages, federal privacy law--including restrictions on communications via text and e-mail with indebted consumers.

If you are receiving payment demands from the collection department at a bank or credit card company--either the company's employees or their authorized collection agents-- then you are entitled to certain protections afforded under the federal Business Credit Practices Regulations,   enacted pursuant to the federal Bank Act.

Collection agency:

Subject to a few exceptions, each province and territory in Canada not only licenses and regulates the conduct of firms that collect debts on behalf of others.  These firms are referred to as collection agencies.  Collection agencies are often described as engaged in third party collection activities because they collect debts belonging not to themselves--but owing to others.

The lion's share of work performed by collection agencies on behalf of their clients include involves making payment demands.  Historically, collection agencies made these payment demands via regular mail and by telephone.  Today, however, some collection agencies are taking advantage of text messages to communicate with indebted consumers.  In many instances the collection agency may be violating federal--and in some cases provincial law--when it communicates with an indebted consumer via text message.

From the perspective of a consumer, the relevant law regulating collection agencies is the province or territory in which the consumer resides.  Provincial and/or territorial law regulating the conduct of collection agencies contains an itemized list of prohibited collection practices.  Prohibited collection practices vary dramatically from one province to another.