Receivable/Accounts - Information for Credit and Collection Issues

Friday, January 21, 2022

Collection Agency Communication and Consent


I get asked a lot by clients and colleagues about consent to communicate with consumers in collections, especially by email and SMS.  Understandably, there’s a lot of confusion about that, especially with electronic communication methods like SMS or email.  In Canada, there are a couple guidelines that dictate what can and can’t be done.

What Do The Collection Acts Say?

Well, nowhere in the various provincial or territorial acts does it say that a collection agency has to ask permission to communicate with consumers.  Now, most of the legislation is built on foundations written in the 1970’s, so there’s a lot in there about telephone, letter mail, and occasionally even telegram, but across the board, the various acts talk about how often you can attempt contact, what hours and days you can attempt contact, and what can be said in the contact, and to whom you may disclose information, but doesn’t get into communication methods outside of telephone or mail.

ow, more recent amendments to the Acts in Ontario, British Columbia and Nova Scotia get into sending collection notices by email so it’s implied that email is fine for other communications.

he one thing that is clear in the Acts are options for consumers to opt-out of communications that cost them money (although the days of pay per text or cell phone minutes are 99% gone), or consumers to opt-out of any communication other than letter mail, if they send their communication request in writing – it used to be registered mail, but now it’s any sort of trackable communication such as fax, email, etc.

o, creditors can pass information on to their collection agency and the agency is allowed to use all methods of communication, until told otherwise.  Nowhere in any Act does it say a consumer needs to ask permission to send an SMS, email, or make a telephone call.

So, unless a consumer indicates otherwise, consent isn’t needed to sent an SMS or an email.

What Does The Office of the Privacy Commissioner Say?

The various findings of the Office of the Privacy Commissioner have a few references to collection agencies, mostly when collection agents have spoken to consumer’s employers, faxed items, or generally broadcast information regarding a debt to someone other than the consumer – that’s really covered under the collection acts, nothing groundbreaking here.

There are a few findings where it was questioned whether a creditor could pass information to the collection agency – and the general stance is that if that information directly impacted the collection agency’s role of collecting a debt, it was fine.

n general terms for all businesses, the Privacy Commissioner does have rules about a company having reasonable precautions to validate the identity of a consumer before disclosing personal information.  They don’t specify how many points of information or needed or what the policy should be, but a collection agency must have one.  So, for example, if you call Dave Smith at the telephone number provided by the creditor, ask for Dave Smith, and get a ‘yes, that’s me’ you’ve technically confirmed the consumer’s identity by two pieces of information – name and telephone number.  That would be sufficient as far as a policy goes.  Now, if you are looking for Dave Smith and start pulling names out of Canada411, you’re going to need another way to validate the identity of the consumer you are calling (because they are ALL Dave Smith, but not necessarily the right one, and when you call, you aren’t validating by two pieces of information like the first example).

he same policy should be applied to email and SMS.  This might require some back and forth, but before you get into details of the debt you should make sure you know who you are talking to.

What Does the Canada Anti-Spam Legislation (CASL) Say?

Well, CASL is mostly focused on companies spamming people with emails trying to solicit them, but there’s a very important exception for ‘enforcement of a right, or pursuit of enforcement of a right’ so for contacting debtors who owe money, consent is not required.

What Other Considerations For Communication Should Be Made?

This is where you can go into the weeds. 

What can you disclose to whom when you have a judgment, outside of filing a garnishment?
  What happens when the consumer has provided the creditor an email address owned by their place of employment?  All good questions, and no black and white answers. 

The important thing is to approach these processes thoughtfully and use discretion.


I am a huge fan of modern communication channels, but I get twitchy when folks start talking about just firing out payment links to a consumer without talking to them, or reminder for payment SMS messages – that works fine in a direct creditor to consumer world, but collection agencies that don’t have an established relationship with the consumer are treading on unproven ground here.  If we haven't spoken to the consumer, we don't know we have the right party, so it's not an issue of consent, it's an issue of validation.

Sending an email or an SMS to a consumer with information they gave the creditor is certainly fine, as long as that communication is 'call me' or 'is this the right party before we go any further?'.

he important thing is to remember that the collection legislation is paramount, and it has several warnings about disclosing information to someone other than the consumer.  While we can’t stop someone from sharing a personal email account, opening someone else’s mail, or pretending to be the consumer in question, reasonable processes need to exist to show that the collection agency is using personal information responsibly.

hat’s my two cents and rant for this week – got some questions or ideas?  I really do appreciate my colleagues reaching out to discuss these topics, it makes us all better.

Thanks kindly,

lair DeMarco-Wettlaufer
INGSTON Data & Credit
ambridge, Ontario

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