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Selecting A Collection Agency In Canada Selecting A Collection Agency In Canada
Tuesday, December 12, 2017
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Selecting a Collection Agency in Canada
If your company carries Canadian trade receivables, it's inevitable you will require the debt collection services of a licensed Canadian collection agency. When that day comes being aware of the correct procedures to collect debt in Canada from Canadian business and consumers will give you the best chance for success without running into a myriad of legal problems.

Many US collection agencies claim they can collect in Canada. In reality, very few can do it legally.

The Canadian version of the FDCPA includes commercial as well as consumer debt and is enforced at the provincial level.

Collection agencies engaged in Canadian debt recovery must meet the following criteria:
  1. Hold a valid provincial agency license
  2. Maintain yearly audited financial statements
  3. Post minimum bond requirements by province

This criteria is common amongst all Canadian provincial legislation, however there are many other requirements per province that are not mentioned.

If your company is serious about developing and maintaining long term business transactions in Canada, it is strongly recommended that you engage the services of a professional debt collection agency that is legally entitled to work in Canada. Ask your agency for copies of their provincial licenses and bonds. It may make good business sense to retain a Canadian collection agency directly to avoid the potentially higher commissions charged by US agencies for international accounts.

Due diligence should be exercised when choosing a Canadian collection agency.

Here is a simple 8 point checklist that an agency collecting in Canada should have as a minimum:
  1. Are they licensed in the jurisdiction where your customer operates?
  2. Do they belong to a professional industry association such as the International Association of Commercial Collectors (IACC) or ACA International (ACA)?
  3. Does the agency maintain Errors and Omissions insurance?
  4. Is the agency capable of reporting to all credit reporting agencies in Canada?
  5. Does the agency maintain a US dollar client trust account to avoid currency exchange problems?
  6. Can the agency provide secure web access to your accounts to assist you with Sarbanes-Oxley compliance?
  7. Does the agency provide a North American toll free telephone number?
  8. Do agency personnel speak fluent English?

If you have any questions or need more information, don't be afraid to ask. Simply click on the $ and choose your contact option. 
Did you know?
  • In Canada, the Collection, Retention and Disposal of Personal information is subject to the Canada Privacy Act

  • In the Northwest Territories a collection agency is permitted to contact a debtor's employer once a year to confirm the debtor's employment, title, and business address.

  • In the Yukon BEFORE communicating with Yukon residents a collection agency must hold a valid collection agency license issued under the Yukon Consumers Protection Act.

  • In Saskatchewan a collection agency shall not commence or continue a lawsuit for the recovery of a debt in the name of a collection agent as plaintiff unless the collection agency has purchased the debt for valuable consideration and the debtor has received notice of the sale of his account.

  • In Ontario It is illegal for a collection agency to communicate with a debtor using any name other than the name under which the collection agency is registered. This means it is illegal for a collection agency employee to hold himself out as calling from the creditor, a law firm, or some government agency.

Did you know?
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