At a glance
Ontario's debt collection laws control what a collection agency can say, when it can call, and how far it can go to collect a debt.
The Collection and Debt Settlement Services Act sets these rules. It applies only to third-party collection agencies.
Knowing the rules gives you a real advantage when a collection agency calls.
In this guide
What law governs debt collection in Ontario?
The Collection and Debt Settlement Services Act (CDSSA) is the provincial law that regulates collection agencies in Ontario.
The Ministry of Public and Business Service Delivery and Procurement registers and regulates collection agencies under the CDSSA.
Every third-party collection agency operating in Ontario must be registered with the Ministry. You can check the Ministry's online directory to confirm whether a collection agency contacting you is registered.
Source: Government of Ontario – Guide to collection agencies
Ontario's debt collection laws only cover third-party collection agencies. They don't cover your original creditor.
If you owe money to your bank and they call you about it, Ontario's debt collection laws don't apply. Your bank isn't a collection agency. It's the company you borrowed from, asking for its own money.
Ontario's debt collection laws kick in when your creditor hires a collection agency to collect.
What a collection agency cannot do
There are rules as to what a collection agency can do.
A collection agency can't:
- Add fees to the amount you owe
- Harass you with threats, profane language, or intimidation
- Lie to you or give false information to anyone else while trying to collect
- Tell your friends or family how much you owe
- Recommend legal action against you without warning you first in writing
Source: Government of Ontario – Prohibited practices and conduct
How a collection agency can contact you
A collection agency in Ontario must send you a written notice before it starts calling. The notice can come by mail or email.
It must include the amount owed, original creditor, debt type, collection agency and collector handling your file, confirmation that the collection agency is registered in Ontario, and a disclosure statement explaining your rights.
Source: Government of Ontario – Stop collection agency calls
After sending the notice, the collection agency must wait six days before contacting you to demand payment. If you don't receive the notice, they must resend it and wait another six days.
When a collection agency can call
Collection agencies in Ontario can call you between 7am and 9pm, Monday to Saturday. On Sundays, they can only call between 1pm and 5pm.
| Day | Calling hours |
|---|---|
| Monday to Saturday | 7am to 9pm |
| Sunday | 1pm to 5pm |
| Statutory holidays | No contact allowed |
Source: Government of Ontario – Stop collection agency calls
How often can a collection agency contact you?
After a collection agency makes initial contact with you, it cannot contact you more than three times in seven days without your consent.
Contact counts when the collection agency speaks to you, leaves a voicemail, or sends an email or text message. A phone call where no one answers and no message is left does not count as contact.
Source: Government of Ontario – Prohibited practices and conduct
You can request in writing that a collection agency communicate only in writing. You can also direct the collection agency to communicate only with your lawyer or licensed paralegal.
Who else can a collection agency contact?
A collection agency in Ontario can contact your spouse, family member, relative, neighbour or friend, but only to confirm your contact details.
If someone has guaranteed to pay your debt, the collection agency can contact that person for any reason related to the guarantee.
A collection agency can contact your employer once to confirm your employment status, job title, or business address. That's it. The only exception is if your employer has guaranteed your debt or if a court order or wage garnishment is in place.
Source: Government of Ontario – Prohibited practices and conduct
The statute of limitations on debt in Ontario
The statute of limitations on debt in Ontario is two years.
The two-year clock starts when the claim is "discovered," which in most debt cases means the date of your last payment or the date you first defaulted.
Source: Government of Ontario – Limitations Act, 2002
After two years pass without a payment or a written acknowledgment of the debt, the collection agency loses the ability to sue you.
You still owe the money. The collection agency can still call and send letters, but it cannot take you to court.
How the clock resets
If you make a payment or acknowledge the debt in writing before the two-year period expires, the clock resets. The collection agency then has another full two years to pursue legal action.
Even a small payment counts. A text message confirming you owe the money can count as a written acknowledgment under the Limitations Act.
Be careful. A collection agency doesn't have to tell you the statute of limitations has expired. If you make a payment on an old debt without realizing the limitation period has already passed, you restart the clock.
How collections affect your credit report
A collection account stays on your Equifax credit report for six years from the date of first delinquency on the account.
Source: Equifax Canada – How long does information stay on my credit report
The six-year credit report period and the two-year statute of limitations are separate timelines. The statute of limitations affects whether a collection agency can sue you. The credit report period affects how long the debt drags down your credit score.
Legal action and wage garnishment in Ontario
A collection agency in Ontario can take you to court if the statute of limitations has not expired, and it has written authorization from the original creditor.
The collection agency must also notify you in writing before recommending legal action.
If a collection agency wins in court, it can garnish your wages, take money from your bank account, or place a lien on your property.
To garnish your wages, a collection agency needs a court order. Your employer is legally required to comply. The collection agency must notify you in writing, and you have time to respond before garnishment begins.
Government benefits such as Ontario Disability Support Program (ODSP), Ontario Works, and Canada Pension Plan payments cannot be garnished by a collection agency.
How to deal with a collection agency in Ontario
If a collection agency contacts you, don't ignore it. Ignoring a debt doesn't make it go away, and it gives the collection agency time to pursue legal action while the statute of limitations is still running.
Confirm the debt is real
Before you do anything, confirm the collection agency is registered with the Ministry. Don't share personal information until you've verified who they are.
Ask for a written breakdown of what you owe. The collection agency must provide it upon request.
If you owe the debt
Tell the collection agency your situation. You can negotiate a lump sum settlement for less than the full amount, or arrange a monthly repayment plan.
Get any agreement in writing before you pay. Keep receipts for every payment, just in case.
If you don't owe the debt
Write to the collection agency and say you dispute the debt. You can request that the matter be taken to court. Once you do this, the collection agency must stop contacting you unless you consent to further contact.
If you can't pay
Speak to the agency and explain the situation, or get advice from a Licensed Insolvency Trustee or a Credit Counselling Agency.
How to complain about a collection agency
If a collection agency is breaking the rules, document everything. Note the date, time, and what was said. Save voicemails, emails and letters.
Contact the collection agency first and make your complaint in writing. If the collection agency doesn't resolve it, file a complaint with Consumer Protection Ontario.
For complaints about a debt collection department at a federally regulated financial institution (such as a bank), contact the Financial Consumer Agency of Canada.
Source: Financial Consumer Agency of Canada – Dealing with a debt collector
Frequently asked questions
Can a collection agency call me on Sunday in Ontario?
A collection agency in Ontario can call you on Sunday between 1pm and 5pm. No contact of any kind is permitted on statutory holidays.
How many times can a collection agency call me in a week?
A collection agency in Ontario can contact you up to 3 times within 7 days after initial contact.
This limit applies to all forms of contact, including calls, voicemails, emails, and text messages.
You can consent to more frequent contact if you choose.
Can a collection agency add fees to my debt in Ontario?
No, a collection agency in Ontario cannot add any additional fees or charges to the amount you owe. The collection agency can only collect the actual amount owed to the creditor.
What happens after the statute of limitations expires on my debt?
The collection agency can still call you, send letters, and try to get you to pay. However, it cannot sue you or obtain a court order to garnish your wages.
You still owe the money, and the debt remains on your credit report for up to six years from the date of first delinquency, regardless of the limitation period.
Can a collection agency contact my employer in Ontario?
A collection agency can contact your employer once to confirm that you work there, your job title, or your business address.
The collection agency cannot disclose your debt to your employer.
The only exception is if your employer guaranteed the debt or if a court order is in place.
Do I have to talk to a collection agency?
No. You can request in writing that the collection agency communicate with you only in writing.
You can also direct the collection agency to contact your lawyer or licensed paralegal instead.
Requesting written-only communication does not prevent the collection agency from pursuing legal action.
Can a collection agency take money from my bank account?
Only with a court order. A collection agency in Ontario cannot access your bank account without first suing you and obtaining a judgment.
Government benefits like ODSP, Ontario Works, and Canada Pension Plan payments are protected from garnishment.
How do I know if a collection agency is legitimate?
Check the Ministry of Public and Business Service Delivery and Procurement's online directory of registered collection agencies.
Every collection agency operating in Ontario must be registered under the CDSSA. If the collection agency is not in the directory, report it to Consumer Protection Ontario.
Does paying a collection agency remove it from my credit report?
No. Paying a collection account does not remove it from your credit report.
The collection account remains on your Equifax credit report for six years from the date of first delinquency, whether you pay it or not.
Paying the debt can reduce its impact on your credit score, but the entry stays on your credit report until the time is up.