Debt Collectors in Manitoba: What They Can and Cannot Do

Who these rules cover

Falling behind on a payment does not leave you without rights. A creditor whose payment is overdue may act on its own, or may hire a collection agent to pursue the money. The collection practices rules in The Consumer Protection Act govern anyone collecting a debt, on their own behalf or on behalf of someone else, in connection with a loan of money, a hire purchase, or a sale of goods or services. The Act defines a debtor to include anyone from whom payment of an alleged debt is demanded, so the protections can apply before any argument about the debt is settled.

Collection agents and their collectors must be licensed by the Consumer Protection Office.

What a collector must tell you

Under the Act, any demand for payment, whether by telephone, in person, or in writing, must indicate three things:

• the name of the creditor with whom the account was incurred
• the balance owing on the account
• the identity and authority of the person making the demand

The Consumer Protection Office adds that a collector must give you their own name and the name of the company they work for, and may not request more than what is owed. If you pay the collector, ask for a signed receipt showing the date, the amount paid, and the name of the creditor or company owed.

The hours collectors may contact you

A collector must not phone you, visit you, or attempt to do either, in order to demand payment, negotiate payment, or seize goods:

• on a Sunday
• on a holiday
• on any other day outside the hours of seven in the morning and nine in the evening

A call at ten at night, or a knock on the door on a Sunday morning, breaks the rule.

What collectors cannot do

• Demand more than you owe. No one may collect more than the amount actually owing plus any fees a statute or regulation allows. The fee the creditor agreed to pay its collection agent cannot be shifted onto you, even if your agreement says otherwise.
• Charge you for the contact. A collector cannot make you pay for the call or message used to demand payment.
• Threaten action they cannot lawfully take. It is prohibited to collect, or to try to effect a seizure, by threatening any action for which the person has no lawful authority.
• Use fake court documents. Without lawful authority, no one may use a document written or printed so as to look like a form used in a Manitoba court.
• Harass you or your family. Calls or visits of such a nature or frequency as to constitute harassment of you, your spouse or partner, or your family are prohibited. The same ban covers calls to anyone else made to find out where you are.
• Spread false information. A collector cannot give, directly or indirectly, any false information to any person or agency that may be harmful to you or your spouse or partner.
• Take goods the wrong way. Goods claimed under a seizure generally cannot be removed unless you, your spouse or partner, your agent, or an adult who has possession and use of the goods with your consent is present and aware of the removal, unless the court gives leave. No one may seize goods other than those specifically charged or mortgaged, or those lawfully claimable under a statute or a court judgment.

If you dispute part of an account, you can give notice by registered mail to the creditor, its assignee, or its collection agent, claiming a set off or counterclaim under the Act, another law, or your contract. The other side must then make no further demands and seize no goods until a court decides the matter, or both sides agree in writing on the amount still owing.

If a collector charges you an amount the law forbids

The Act gives a sharp remedy for wrongful charges. If anyone charges you an amount that section 98 of the Act makes not rightfully collectable, then:

• if you already paid it, you may recover from the creditor an amount equal to three times the charge
• if you have not paid it, or have paid only part, you may set off three times the charge against what you rightfully owe, and recover any excess from the creditor

If goods are seized contrary to the Act, you may take the goods back and recover the cost of doing so.

Repossession rules

Repossession means taking back goods purchased on credit when payment is past due. It must be done in accordance with the Act, by a licensed collection agent or by the creditor. If your goods are repossessed, you must be given written notice within forty eight hours, not counting Saturdays, Sundays, and statutory holidays, telling you:

• that the goods have been repossessed, and the date it happened
• the amount that must be paid to have the goods returned, and how it is calculated
• the last date to reclaim the goods, at least twenty days after the notice is given
• where the goods are being stored

Repossessed goods will be returned if you pay the missed payments, any default charges, and the actual expenses of taking and keeping the goods, up to the limit set by statute. If you do not recover the goods, they can be legally resold. A debt can also end up in court, where a judgment may be granted against you by default if you do not respond. A judgment can be enforced through garnishment of wages, removal of personal property as the court orders, or liens on property.

Practical steps if a collector contacts you

1. Write everything down. Note the collector’s name, their company, the creditor named, the balance claimed, and the date and time of every contact.
2. Check the licence. Ask the Consumer Protection Office to confirm the collector is registered and the agent is licensed.
3. Speak up about mistakes. If the debt sounds unfamiliar or you think there has been an error, tell the collector and contact your creditor at once.
4. Check your credit report. You can request a free copy each year from Equifax Canada and TransUnion Canada to confirm your information is accurate.
5. Keep payment records. Track every payment, and always ask for the dated receipt described above.
6. Do not simply ignore the calls. The Consumer Protection Office advises that unpaid debts do not disappear, and that arranging repayment is better than ignoring the calls. An unpaid account may also affect your credit score.

How to complain

The Consumer Protection Office investigates complaints about collection practices, and those who break the rules may face penalties ranging from $1,000 to $20,000. When you complain, be concise. Describe the transaction and its date, the problem and when it arose, what the business said in response and who you spoke to, and what you are seeking. Include copies of relevant documents, such as contracts, invoices, receipts, and correspondence, plus your name, address, and daytime telephone number.

Reach the Consumer Protection Office at Suite 302, 258 Portage Avenue, Winnipeg, Manitoba, R3C 0B6, by telephone at 204 945 3800 in Winnipeg or 1 800 782 0067 toll free within Manitoba, or by email at [email protected]. Office hours are 8:30 a.m. to 4:30 p.m., Monday through Friday.

A note on this guide

This article is general legal information about Manitoba rules as published by the Manitoba government and set out in The Consumer Protection Act. It is not legal advice, and it cannot decide how the law applies to your specific debt or dispute. If a collector is threatening court action, or a large amount is at stake, consider speaking with a lawyer or contacting the Consumer Protection Office.