Oct 15, 2026
It’s a common situation — even if it’s not talked about. You miss a few loan payments. Then the phone calls, emails and text messages start. Collection agency officers reach out demanding you repay the money you owe — only the consequences seem to escalate. Fast. You’re told that your file will be handed over to the police and the tax authorities and that your “financial annihilation” is imminent; paying up is the only way to make it stop.
This is exactly what happened to six borrowers from British Columbia.
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According to the B.C. consumer protection regulator, a Surrey, B.C. lender used pressure tactics that threatened borrowers in an attempt to force people into paying debts. As a result of the investigation, the company must now pay $34,000 in penalties.
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The investigation highlights that Canadian borrowers continue to have rights, even if they are in default of loan payments. And those rights apply whether you’re dealing with a collection agency or the lender itself.
Why did Consumer Protection BC fine a lender $34,000?
Consumer Protection BC (CPBC) is a not-for-profit regulator that enforces B.C.’s consumer protection and debt collection laws. Prior to its Sept. 24 decision, the CPBC inspected Toledo Credit after receiving complaints from six borrowers. The CPBC found that Toledo Credit, a Surrey, B.C. consumer lender, had engaged in harassment tactics and used false or misleading information to pressure borrowers to repay outstanding debts in all six cases.
In one case, messages warned a borrower that their file would go to the Royal Canadian Mounted Police (RCMP), the Canada Revenue Agency (CRA) and provincial crime units and the borrower was threatened with “financial exile” and “reputational destruction.” While Toledo Credit never acted on these threats, the CPBC investigation found the firm violated the province’s Business Practices and Consumer Protection Act. According to the CPBC decision, the messages were “calculated to create fear of criminal, financial, professional and reputational consequences.”
Based on the CPBC decision, Toledo Credit must pay $34,000 in administrative penalties, reimburse $3,000 in inspection costs and change its collection practices.
In response, the company has denied harassing borrowers. The company has 30 days to ask CPBC to reconsider the decision.
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Do collection rules apply when a lender chases its own debt?
While borrowers may already be aware of the rules and regulations that govern collection agencies — businesses that recover unpaid money on behalf of a creditor or buys the debt directly, collecting a fee for recovered funds — they may not be familiar with the rules that govern borrowers collecting money directly.
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In the case of Toledo Credit, the only money being collected was the money the lender provided directly to borrowing customers. As a result, Toledo Credit did not need a collection agency licence. But according to CPBC, B.C. debt collection laws still apply — and apply to any business trying to collect a debt from a B.C. consumer.
These laws even apply to big banks. In November 2025, Scotiabank paid $33,900 into a consumer education fund after a CPBC investigation found that a customer was called over 100 times in an effort to recover funds owed.
What can a debt collector legally do in B.C. — and what crosses the line?
Being contacted about a debt you owe isn’t harassment on its own, but cross the line and you have the law to protect you. So where’s that line?
To be clear, B.C. doesn’t cap how often a collector can reach out each week. However, CPBC guidance says contact from a collector must be between 7am and 9pm Monday to Saturday and 1pm to 5pm on Sundays. Plus, collectors can never contact you on statutory holidays.
In addition to these time constraints, collector cannot:
- Use threatening, profane or intimidating language
- Put excessive pressure on you to pay
- Threaten legal action unless they’re actually taking it
- Discuss your debt with someone else without your permission
- Publish or threaten to publish details of your debt, except to a credit reporting agency
- Add interest or fees your original agreement doesn’t allow
Red flags to look out for
For borrowers struggling to keep up with debts, there are a few red flags worth watching for when it comes to debt collector conduct. For instance, a message that involves threats about calling the police or notifying tax authorities is not allowed — if this happens, keep a record and contact your provincial regulator immediately.
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The CPBC also suggests asking for the collector’s name and company before you share personal information or make a payment. And it’s good practice to confirm the details of the collector and the debt prior to making a payment.
What about debt collector conduct in the rest of Canada?
Debt collection rules are set provincially, so the details differ on what is allowed. One good option is to confirm that the business you are dealing with is legitimate. Confirm these details with the federal Office of Consumer Affairs, which keeps a directory of provincial debt collection regulators. It also links to the Financial Consumer Agency of Canada for debts tied to federally regulated banks.
What to do now
If a lender or collector contacts you — or crosses the line — the CPBC recommends a few steps:
- Keep copies of texts, emails, voicemails and account records
- Ask for written details of the debt, including the amount owing and who owns it
- Request contact in writing only, or through your lawyer, using CPBC’s self-help forms, and allow three to five business days for the request to take effect
- If you don’t believe you owe the money, or you’ve already paid, send a dispute form to both the collector and the original creditor
- If the conduct continues, file a complaint with CPBC or your provincial regulator
Pushing back on illegal tactics doesn’t erase a legitimate debt, but flagging collectors who are operating outside of regulatory rules does help reduce the stress of unpaid debts.
For borrowers who owe but are unable to pay, consider talking to a non-profit credit counsellor; these professionals can help you work out a repayment plan before the problem grows.
Remember, your obligation to repay and a collector’s obligation to treat you lawfully exist side by side. As Louise Hartland, CPBC’s director of public relations, said in a statement: “Collectors can ask people to repay a debt, but they can’t harass them.”
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Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
