If you’re struggling to recover your money from chronic debtors, you may want to hire a collection agency.
Recovering a loan is always difficult than offering it. Besides, some debtors are not intimated by your frequent calls or threat.
If you want your debtors to take urgent agency, sending them a notification for a collection agency may change the narration.
However, there are some debtors that are not intimated by that notification. As a result, you must take action by handling them to a collection agency.
But with several collection agencies out there, you can’t afford to choose the wrong best agency. This is where the best collection agencies come in.
As you continue reading, you will learn about the best collection agencies in Canada and how to choose the perfect one.
What is a Collection Agency?
A collection agency, also known as a debt collector, refers to a company responsible for recovering outstanding debt on behalf of creditors.
Whether a credit card, loan, or line of credit, a debt collector can contact your debtors once you report them.
That said, most creditors usually report debtors to collection agencies from 60+ days of non-payment.
Depending on your situation, you can use your debt collection department, hire a debt collector, or report the debtor to a financial debt recovery agency to retrieve your funds.
As you continue reading, you will learn more about debt collectors in Canada and how to choose the best one.
How Debt Collection Agencies Work
Since there are different types of debt collection agencies, you should expect them to operate differently.
However, the major aim of every debt collection agency is to recover creditors’ unpaid debt such as:
- Credit cards
- Automobile loans
- Medical loans
- Personal loans
- Student loans
As a result, debt collection agencies adopt different strategies for recovering outstanding debt based on the behaviour of each debtor.
That said, you need to notify your debtors before handing them to a debt collector. Usually, the notification will include the name of the collector, your name, and the amount your debtors owe.
After recovering the outstanding debt, you will pay the collector a percentage of the debt as compensation.
Who Can a Debt Collector Contact?
A debt collector can contact anyone who a creditor reported owing an outstanding debt.
To this end, a debt collector can go to any length to contact a debtor through their mobile number, employer, relatives, friends, or even neighbours.
However, if a debtor consent to a creditor not to contact them through a third party, so shall it be.
What Can a Debt Collector Do in Canada?
While the roles of debt collectors vary by jurisdictions, the following are the roles of debt collectors in Canada:
1. Retrieve Outstanding Debt
As mentioned previously, the major role of a debt collector is to retrieve creditors’ outstanding debt. This involves contacting debtors through phone calls and letters.
But when a debt collector can’t reach a debtor through their phone number, they can contact them through their employer, relatives, friends, or even neighbours.
However, a debt collector can’t contact a debtor through a third party if a written agreement prohibits it by the debtor.
Consequently, the collection agency has to rely on other computer software and private investigations to reach the debtor.
2. Research Debtors Assets
Some debtors are liable to large debt because they don’t have the means to repay.
Consequently, a debt collector can perform underground research to explore a debtor’s assets and determine their repayment ability.
3. Report to Credit Bureaus Canada
Furthermore, debt collectors may report outstanding debt to credit bureaus in Canada, reducing debtors’ credit scores.
This is likely to encourage debtors to pay back due to the severe consequences of having a low credit score.
3. Pursue Legal Action
A debt collector in Canada can’t force a debtor to repay a loan, access their bank account, or seize their paycheck.
However, a collector can pursue legal action against a debtor. By doing so, the debtor will be subject to court-ordered duties, which are often severe.
In most cases, the collector can have a legal backing of garnishing the wages and bank account of the debtor by contacting their employer and bank.
4. Enforcing Legal Judgment
Some debtors may fail or refuse to meet their obligations despite a legal judgment against them.
As a result, the debt collector has the legal backing to enforce compliance by placing levies on the debtor’s vehicles, bank accounts, forcing the sale of their assets, or placing property liens.
What a Debt Collector Can’t Do in Canada?
Even though a debt collector has the right to collect unpaid debt, there’s a limit to what they can do in Canada.
Here are the things a debt collector can’t do in Canada, as stated by the federal government:
1. Contact a Third-Party
A debt collector doesn’t have the right to contact a debtor on their mobile number without providing the number to them.
Also, a collection agency can’t contact a debtor through a third party if they consent to an agreement prohibiting such.
Furthermore, a debt collector can’t ask a debtor’s employer, relatives, friends, or neighbours to repay their loan unless the person co-signed it.
2. Harass
Debt collectors don’t have the right to harass debtors in Canada. This means no debt collector should threaten, intimate, or use abusive words against a debtor.
3. Apply Force
A debt collector in Canada can’t force a debtor to repay debt without legal judgment.
But even when there’s a legal judgment against a debtor, a collection agency can’t force the debtor unless they fail to meet the court-ordered duties.
4. Misrepresent the Situation
A debt collector can’t misrepresent their roles or perform contrary to their duties.
Additionally, Canadian debt collectors can’t give false or misleading information while recovering unpaid debt.
5. Increase Cost
Finally, a debt collector in Canada doesn’t have the right to increase the cost of a debtor’s obligation beyond legal and non-sufficient fees.
That’s all about the limitations of debt collectors’ roles in Canada.
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What Happens if a Debtor Fails to Pay a Collection Agency?
Here are the three major consequences of not paying a debt collector in Canada:
1. Reduce Credit Score
As mentioned previously, a debt collector has the right to report a debtor to the Canadian credit bureaus in order to recover outstanding debt.
The implications of these are well known. Besides lowering a debtor’s credit score, their chances of getting loans in the future will be limited.
But even if they’re approved for a loan, the interest rate will usually be high.
Also, reporting a debtor to a credit bureau in Canada may lead to rent disapproval by landlords, high insurance premiums, and missing employment opportunities, among others.
3. Legal Action
Debt collectors have the right to pursue legal action against a debtor if they fail to pay their debt for a particular period.
As a result, a debtor may face stringent court-ordered duties that may go against their wish. If they fail to meet the duties, the debt collector has the right to place levies on their car, bank accounts or force them to sell their assets.
3. Financial Set Back
The overall consequences of not paying a debt collector may lead to undermining a debtor’s financial security. This will not only ruin their current financial goals but their future goals.
Best Collection Agencies in Canada
Here are the best debt collection agencies in Canada:
1. MetCredit
MetCredit is one of the best collection agencies in Canada with offices in Toronto, Edmonton, Vancouver, and Montréal.
Established in 1979, this collection agency covers all Canadian provinces and territories on debt collection, debt recovery, and Accounts Receivable management.
Furthermore, MetCredit’s mission is to provide professional, reliable service and offer solutions according to the highest ethical standards.
2. CanadaDirect
CanadaDirect is another best collection agency in Canada, based in Dorval, Quebec. By using the best Voice Assistant Solutions (VAS) on the market, CanadaDirect creates customized programs that deliver superior results.
This collection agency aims to deliver the best results to its clients through its expertise in Contact Center Solutions.
In addition to soft collections and account management, they have developed expertise in creating and executing customer acquisition and retention strategies.
That said, CanadaDirect has been in the industry for almost 30 years, partnering with brands across telecom, financial, consumer, and non-for-profit segments.
3. Canadian Corporate Legal Services
Canadian Corporate Legal Services is a Toronto-based collection agency that has been in the business of debt recovery for over 30 years.
This collection agency not only covers Canada but also covers the United States and all over Europe.
That said, the company’s debt recovery services are frequently used by businesses of all sizes to recover money owed them.
Canadian Corporate Legal Services use strategic means to recover your money without alienating your clients. This means that after the debt recovery, you will maintain your relationship with your clients.
4. Canadian Credit Services
Canadian Credit Services is a Calgary-based collection agency that focuses on commercial and third-party debt recovery.
Through their highly trained professionals, you can maximize your revenue while protecting your reputation and maintaining your clients.
Furthermore, Canadian Credit Services offers free skip-tracking services to help you with your debtors’ current addresses and phone numbers.
That said, Canadian Credit Services reports to Equifax and TransUnion and doesn’t charge you unless they successfully recover your funds.
5. National Recovery Corp
The National Recovery Corp is a fully licensed collection agency in Cambridge, Ontario, serving all Canadian provinces and territories.
From business to business to business to consumer debt recovery, National Recovery Corp focuses on recovering delinquent accounts.
This collection agency aims to be the industry leader in debt recovery in Canada through advanced collection techniques.
That said, the National Recovery Corp’s goal is to maximize its customers’ cash flow and revenue while maintaining their reputation and client base.
Furthermore, the National Recovery Corp serves many industries such as healthcare, financial, property management, government, lawn care, manufacturing, production, and construction.
6. Collection Services of Canada
Collection Services of Canada is another best debt collection agency located in Whitby, Ontario. This collection agency recovers a wide range of debt such as:
- Service debt
- Retail debt
- Bad checks
- Medical bills
- Payday loans
- Loans
- Utility
- Legal debt
- Credit card debts
With over two decades of experience in the debt collections industry, Collection Services of Canada offers cost-effective debt recovery services to its clients.
In addition to debt recovery services, Collection Services of Canada offers Accounts Receivable solutions that maximize revenue for businesses while maintaining their reputation and client base.
7. Priority Credit Management Corp
Priority Credit Management Corp is a multifaceted company offering collection, credit, and lien filing services across Canada and the US.
Located in Edmonton, Alberta, PCM Corp specializes in commercial debt recovery, credit management, and lien filing.
Besides offering low-cost services, PCM also offers the fastest debt recovery solutions.
With over 16 years in the industry, this agency started as a collection agency and later upgraded to all-around accounts receivable company. The agency aims to help its clients get paid from:
- Third-party collections
- A/R outsourcing
- Credit application adjudication and risk mitigation
- Lien filing
- Leam training
8. Credit Bureau Collections Ltd.
Credit Bureau Collections Ltd. is one of the best collection agencies in Canada located in Barrie, Ontario.
This collection agency pride itself on offering low-cost commercial and consumer accounts in Canada.
With over 30 years of experience, Credit Bureau Collections Ltd. has established itself as a reputable collection agency in Canada.
Like the other collection agencies, this company only collects fees when it successfully recovers debt.
9. Common Collection Agency Inc.
Common Collection Agency Inc. (CCA) is a fully licensed collection agency surviving all Canadian provinces and territories.
Located in Scarborough, Ontario, Common Collection Agency has over 52 experience in the debt collection industry.
Formerly known, Commonwealth Collection Agency, CCA has satisfied clients all over Canada, making it common but uncommon when in the debt recovery industry.
10. Suite Excel Collections Canada Inc
The last but not the least good collection agency on my list is Suite Excel Collections. This collection agency has over 25 years of experience offering debt recovery services all over Canada.
Located in Toronto, Ontario, Suite Excel Collections has top-notch debt technology that services:
- Finance companies
- Banks
- Credit unions
- Property managers
- Housing co-operatives
- And other retail and commercial enterprises.
Furthermore, Suite Excel Collections is a fully licensed and bonded collection agency offering low-cost collection solutions.
Which Collection Agency to Choose in Canada?
It may be challenging to choose one of the above best collection agencies in Canada. This is because all have competitive features that distinguish them from other collection agencies.
However, consider the following factors when narrowing your selection of the best collection agency in Canada:
1. Industry
Not all collection agency serves all industries. Common industries that collection agencies cover in Canada are:
- Healthcare
- Financial
- Property management
- Government
- Lawn care
- Manufacturing
- Production
- Construction
Thus, ensure that the collection agency you’re choosing covers your industry.
2. Type of Recovery
While some collection agencies cover consumer to business, others cover business to business debt or both.
As a result, you should choose a collection agency that covers the type of debt you want to recover.
3. Fees
Most collection agencies in Canada will not collect anything from you until they recover the debt. Since not all collection agencies are the same, there’s an exception to this.
Thus, avoid any collection that requires upfront fees for recovering your debt.
4. Location
Different collection agencies have different addresses in Canada. While they may offer services across all provinces and territories, it’s essential to choose one whose office is ! to you.
That said, choosing a nearby collection agency will help you address any sudden problem quickly.
Final Thoughts
A debt collector could be your last option when struggling to recover your debt from chronic debtors.
However, not choosing the best debt collector could undermine your efforts and bring your business to a standstill.
Thankfully, now you know the best debt collection agencies in Canada and how to choose the perfect one.
If you have any questions or concerns about debt collection in Canada, don’t hesitate to communicate in the comment section.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.