How Should I deal with Debt Collectors

Making Sure Your Debt Collector is Legit

Anyone trying to collect a debt from you—whether they work for a big agency or by themselves—must be legally registered with the Council for Debt Collectors (CFDC).

If someone contacts you demanding money and you feel suspicious, don’t just pay them. You can check if they are a real, registered collector by looking up their name on the Council’s Active Online Register.

Council for Debt Collectors (CFDC) Contact Info

Your Right to Know Exactly What You Owe

Debt collectors usually get to keep a percentage of the money they collect, which means their main goal is to get as much cash from you as possible. Because of this, you should never just take their word for how much you owe.

Under the National Credit Act, you have the right to demand a free, detailed statement that shows exactly what you owe and how that number was calculated.

• The collector or credit provider must give this to you within five business days of you asking.

• They can send it via email, SMS, mail, or give it to you in person.

If a debt collector refuses to show you the original loan documents or your statement, do not pay them. Instead, you can lodge an official complaint with the CFDC.

What If a Lawyer is Overcharging You?

Sometimes, lawyers act as debt collectors. If you are dealing with a lawyer and their extra fees, interest, and costs seem completely unfair or made up, you have a way to fight back.

In the past, you would complain to a “Provincial Law Society,” but those were shut down in 2018. Today, all lawyers are watched over by the Legal Practice Council (LPC). You can ask the LPC or a local magistrate’s court clerk to review the lawyer’s bill to ensure the fees are legally fair.

Legal Practice Council (LPC) Contact Info

(Note: The LPC has offices in all nine provinces. For the full list or to make a complaint, visit their Contact Page).

Three Important Laws Protecting You Right Now

If you are dealing with debt collectors today, keep these three massive legal protections in mind:

• 1. Old Debts Expire (“Prescribed Debt”): If you haven’t made a payment or admitted to owing a debt for three straight years, and the creditor hasn’t taken you to court over it, that debt has likely “expired.” By law, it is now a criminal offense for anyone to try and collect that old debt from you or sell it to another agency.

• 2. No Surprise Salary Deductions (“Garnishee Orders”): In the past, collectors could easily force your boss to deduct debt payments straight from your paycheck. Thanks to a 2016 court ruling, this is much harder for them to do. Now, a magistrate must look at your personal finances to make sure you can still afford to feed your family and pay rent before they allow anyone to take money from your salary.

• 3. Your Debt Cannot Be Infinitely Inflated (The in duplum Rule): There is a strict legal limit on how much interest and extra collection fees can be added to your account. The extra charges can never add up to more than the original amount you owed when you stopped paying. For example: If you stopped paying when your balance was R5,000, the absolute maximum they can ever force you to pay back—including all interest and fees—is R10,000.