Debt collection agencies have a bad rap. And although some of it may be justified, it’s never fair to tar an entire industry with the same brush. As a vocal proponent of ethical collection practices, I am impressed with improvements I’ve seen in the industry over the decades.What’s true: some collection agencies still resort to sneaky tricks and unethical tactics to collect a debt. For your business as the credit grantor, this is never a good thing: it harms your brand reputation and can escalate an already challenging situation. And for debtors, it can be unfair and cause a lot of misery.
Here are 5 things any business owner needs to know about collection agency practices and their governing rules before partnering with one.
1. Collection agencies can’t call debtors at all hours.
The actual times they are allowed to call vary by province, but calls or visits are generally not allowed late at night or on statutory holidays, and Sunday hours are limited. Everyone, debtors included, is entitled to rest and respite.
2. A collection agency cannot contact the debtor every day.
Most provinces and territories set a limitation of three unsolicited calls per week. Anything more can be considered harassment. (Important to note that unanswered calls are not considered “contact” and that the limitation does not apply to communications to which the debtor has consented or solicited in advance.)
3. Collection agencies must not misrepresent.
Agents are not allowed to pretend to be someone else (a lawyer, for example), and they must be as accurate as possible about the debt amount, interest charges, consequences and other particulars. Every province and territory has consumer protection legislation that forbids misrepresentation or deception. Note that although a caller collecting debt on behalf of a law firm is technically a collector, the legal profession is governed by regulations that differ from those pertaining to collection agencies.
4. Collection agencies cannot make threats or be abusive.
At MetCredit, to do so would be a terminable violation of our code of ethics—but then we’re not the average agency. Collectors cannot threaten to sue unless they have purchased the debt or have written permission from the client credit grantor. For an agency like ours with an in-house legal department, proceeding to litigation can be a simple matter for the client, and one we handle cost-effectively if every other recourse has failed. It is also worth noting that most high-volume listing clients give the agency blanket permission to sue.
5. Collectors are not allowed to approach a debtor’s family, friends or boss.
Some agencies will do so nonetheless to cause embarrassment or to shame debtors into paying, which is not allowed. It's important to recognize there are exceptions, for example if the debtor has gone into hiding and the agent must reach out to find new contact information. In such cases, legislation usually allow the agency to contact a spouse, friend or neighbour to confirm employment status, business title, business and address in preparation for legal proceedings, unless consent has been given to contact those individuals. A collection agency is also permitted to communicate with the guarantor of an account in default.
At MetCredit, collectors are trained very differently from most collection agencies. In fact, we are cautious in hiring even successful and experienced collectors who have worked for a competitor, because our practices and collection ethics differ so dramatically. (There are some inspiring exceptions: take this quiz if you think you’ve got what it takes to be part of the amazing MetCredit team.)
MetCredit seldom hires collectors who have worked for a competitor because our practices and collection ethics differ so dramatically.
We believe that debtors are simply ordinary people in a tough predicament, and who need help finding solutions. All our collectors are highly trained problem solvers and negotiators.
Does it work? Well, since 1973 we’ve been Canada’s leader in commercial and consumer debt collection. We collect fast, and work hard to safeguard our clients’ brands. And those clients appreciate it, including banks, credit unions, major retailers and telecom companies. For one of the country’s big banks we’ve provided uninterrupted service since 1974.
So yes, it works very well for us. Part of the reason is the uniqueness of an ethics-based problem solving approach. Talk to our collectors and consistently they’ll tell you they enjoy helping people on a daily basis. It comes as a surprise to many, especially those whose experience is with traditional collection agencies.
Clients appreciate and recognize good ethics.
For one of Canada’s big banks we’ve provided uninterrupted debt collection service since 1974.
If you’re on the hunt for a reliable debt collection partner, click the link below to download my helpful free guide to Canadian Collection agencies. And collect that debt!