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A collection agency called about a debt I don't owe. What can I do?
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A collection agency called about a debt I don't owe. What can I do?
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Debt and Consumer Rights - Collection agencies
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Ministry of Government and Consumer Services
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A collection agency called about a debt I don't owe. What can I do?
Reviewed:
August 17, 2018
Answer
If a collection agency calls you about a debt that you don’t think you owe, don’t give them money or personal information.
Your creditor or the collection agency may have made a mistake. A creditor is a person or business you owe money to.
Contact the collection agency and explain that:
- you don’t owe the money, or
- the information they have is wrong.
Then, the collection agency can contact your creditor to find out why they claim that you do owe the money.
If the collection agency is trying to collect a debt that you already paid, you may also want to contact the creditor. See Step 1.
Making sure it’s a real collection agency
Make sure that the caller is from a real collection agency before you give them any personal information.
A real collection agency will already have details about you and the person or company who hired them to collect the debt. See Step 2.
Disputing the debt
If these things don’t work, you can send a formal letter by registered mail to the collection agency saying that you “dispute the debt” and that you want a court to decide the problem.
If you do this, the collection agency can only contact you if they plan to take you to court. See Step 4.
1. Talk to the collection agency or your creditor
If you don’t agree that you owe the money, the first step is to talk to the collection agency. Sometimes, you can talk to them on the phone and explain that:
- you don’t owe the money, or
- the information they have is wrong.
Explain your situation to the collection agency. For example, you might:
- never have owed the money
- have already paid back your creditor, who is the person or company you owed the money to
- owe less money than what the collection agency says you owe
If you already paid the debt, make sure that you also talk to the creditor.
Reviewed:
August 2018
2. Make sure you’re dealing with a real collection agency
People who pretend to be a collection agency to get money from you are breaking the law. These people are sometimes called scam artists.
So when you get a phone call about collecting a debt, make sure you’re dealing with a real collection agency.
There are rules that collection agencies must follow when they contact you.
Collection agencies must be registered with the Government of Ontario. So you can check to see if they’re listed on the government’s website.
And in most cases, collection agencies must send you a written notice before they contact you to repay the debt.
If someone calls you about a debt
If someone calls you about a debt, don’t give them money or your personal information if:
- you didn’t first get written notice from them, or
- you don’t think you have a debt.
The caller might say that the letter is in the mail or offer to email you some information to prove the debt. But wait until you get a written notice before paying any money or giving any personal information.
Written notice can be sent by mail or email. But if you tell the collection agency you don't want to receive emails and give them your address, they must send you the written notice by mail.
The caller may give you the name of a real collection agency but not actually work for them.
Look for information about the company online or in the phone book. Then, call to see if they’ve been hired to collect your debt and if the person who called you works for them.
Having your personal information
A real collection agency will already have your address, name, and other personal information. The person you owe money to must give them this information so they can collect the money from you.
But, you need to be careful because someone pretending to be a collection agency could also have this information. For example, they might steal it or buy it from a payday loan company. That’s why it’s important to check that you’re dealing with a real collection agency.
One way you can check is to call the collection agency and ask if they’ve been hired to collect your debt.
Look up their phone number yourself. Don’t assume that the phone number the caller gives you is the right number.
Making threats
If someone calls about a debt, they’re not likely from a real collection agency if they say you must pay them right away or else they’ll:
- sue you
- call your friends or family
- arrest you
The law says that collection agencies can’t do these things. So, if this happens to you, you’re probably not dealing with a real collection agency.
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3. Write a letter to dispute the debt
If the collection agency keeps trying to collect the debt after you tell them that you don’t owe the money, send them a letter by registered mail.
Make sure that you do this only if you:
- know you don’t owe the money, and
- have tried other ways to fix the problem.
In the letter, say that you “dispute the debt” and that you want a court to decide the problem.
Keep a copy of any letters you send and always put the date on them.
Contact from the collection agency
Once you send the registered letter, the collection agency can’t contact you about that debt, unless you tell them that it’s okay to do this.
But the law says that the collection agency must contact you before they start legal action against you. And they must do this even if you did not tell them it was okay to contact you.
For example, if the collection agency plans to sue you in Small Claims Court, they must tell you:
- the reasons why they’re suing you
- what information they have to support their reasons
While this is going on, the collection agency can try to collect other debts that you owe and have not disputed.
Check your credit report
A few weeks after you send the registered letter to the collection agency, check your credit report to make sure that the debt is removed.
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4. Find out what happens if a collection agency decides to sue you
To dispute a debt, send the collection agency a registered letter saying you want the court to decide. Once you do this, the collection agency has to take you to court if they want to collect money from you.
This means they need to “sue you” to get the money.
If the collection agency decides to sue you, they send you a notice in the mail. The notice must include:
- the name of your original creditor
- the name of the collection agency
- the amount that the collection agency says you owe
If this happens, you may want to:
- get legal help
- find out more about Small Claims Court
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5. Make a complaint
There are a few things you can do if you:
- have trouble when you’re disputing a debt
- think a collection agency is breaking the law
Complain to the collection agency
Before you complain about a collection agency, you may want to call them to see if you can fix the problem without making a complaint.
For example, if they still contact you after you sent them a registered letter asking them not to, tell them you’ll make a complaint if they don’t stop.
You can also try speaking to the director of the collection agency.
Sometimes the collection agency will stop breaking the rules if you tell them that you know your rights. For example, if they’re calling you at times they’re not supposed to, tell them that you know they’re breaking the law.
Complain to the Ministry of Government and Consumer Services
If a collection agency does not follow the rules, you can complain to the Ministry of Government and Consumer Services.
The Ministry looks into whether the collection agency has been following the law.
The Ministry can:
- tell the collection agency to not collect from you
- order the collection agency to stop contacting you
- fine the collection agency
- stop the collection agency from doing business
Take other steps
If the collection agency threatens you, you may be able to:
- report them to the police
- sue them in Small Claims Court
But, you should get legal help before doing either of these things.
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2. Write a letter to dispute the debt
If the collection agency keeps trying to collect the debt after you tell them that you don’t owe the money, send them a letter byregistered mail (link is external).
Make sure that you do this only if you:
- know you don’t owe the money, and
- have tried other ways to fix the problem.
In the letter, say that you “dispute the debt” and that you want a court to decide the problem.
Keep a copy of any letters you send and always put the date on them.
Contact from the collection agency
Once you send the registered letter, the collection agency can’t contact you about that debt, unless you tell them that it’s okay to do this.
But the law says that the collection agency must contact you before they start legal action against you. And they must do this even if you did not tell them it was okay to contact you.
For example, if the collection agency plans to sue you in Small Claims Court, they must tell you:
- the reasons why they’re suing you
- what information they have to support their reasons
While this is going on, the collection agency can try to collect other debts that you owe and have not disputed.
Check your credit report
A few weeks after you send the registered letter to the collection agency, check your credit report to make sure that the debt is removed.
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