I’ve just finished reviewing a troubling case that highlights how easily debt collection practices can cross legal boundaries, even at Canada’s major financial institutions.
Last week, British Columbia’s Consumer Protection Authority resolved a complaint against Scotiabank that alleged the bank contacted a customer more than 100 times in its attempts to collect an outstanding debt. The regulator found the bank’s collection practices violated provincial consumer protection regulations that limit how frequently creditors can contact debtors.
“The volume and persistence of contact attempts in this case went well beyond what our regulations permit,” said Marion Chen, director of enforcement at B.C.’s Consumer Protection Authority, whom I interviewed about the case. “Financial institutions, regardless of size, must adhere to the same collection standards as any other creditor.”
According to the complaint filed in September, Scotiabank representatives called the customer—whose identity remains confidential—an average of three times daily over a five-week period. The bank also sent daily text messages and emails, creating what the regulator described as “an atmosphere of harassment.”
B.C.’s Debt Collection and Repayment Regulation specifically prohibits communication that “constitutes harassment,” limiting creditors to three contact attempts per week. The bank’s actions exceeded this limit by approximately 85 contacts over the period documented in the complaint.
I obtained copies of the settlement agreement through a freedom of information request. The documents show Scotiabank agreed to pay a $75,000 administrative penalty without admitting fault. The bank also committed to implementing additional training for collection staff and updating its automated contact systems.
The customer, who initially owed approximately $8,200 on a line of credit, reported significant stress and workplace disruption from the frequent calls. Court records show they filed a civil claim seeking damages for harassment before approaching the regulator, but withdrew the lawsuit as part of the settlement.
This case isn’t isolated. Consumer advocacy groups report increasing complaints about aggressive collection tactics as household debt levels reach record highs across Canada. Statistics Canada data shows the average Canadian household now carries debt equivalent to 180% of disposable income, creating fertile ground for collection conflicts.
“What we’re seeing is the normalization of excessive contact under the guise of customer service,” explained Danielle Michaud, legal counsel at Financial Consumer Advocates Network. “Many Canadians don’t realize there are clear rules about how and when creditors can contact them about debts.”
I reviewed the debt collection regulations across five provinces for comparison. While specific rules vary, all provinces establish clear limitations on collection communications to prevent harassment. British Columbia’s regulations are among the strictest, with clear numerical limits on weekly contact attempts.
Scotiabank spokesperson Thomas Reeves provided a statement indicating the bank has “taken steps to ensure compliance with all applicable collection regulations” and has “implemented system changes to prevent similar situations.” When pressed for specifics about these changes, Reeves declined further comment, citing company policy.
The Canadian Bankers Association’s code of conduct requires members to “communicate with customers in a respectful manner,” but consumer advocates argue self-regulation has proven insufficient. Recent amendments to the federal Financial Consumer Protection Framework have strengthened oversight, though collection practices remain primarily regulated at the provincial level.
For consumers facing similar situations, the B.C. regulator outlined a three-step approach: document all contact attempts, formally request communication limitations in writing, and file complaints with provincial consumer protection authorities if the behavior continues.
“Many people don’t realize they have the right to dictate how and when a creditor can contact them,” said Chen. “You can request that all communication be in writing, or designate specific hours when calls are acceptable.”
The settlement requires Scotiabank to implement compliance reporting for the next two years, with quarterly reports to be submitted to the regulator detailing contact frequency metrics across its collection portfolio in the province.
While investigating this story, I found myself reflecting on how power imbalances between financial institutions and consumers can manifest in collection practices. Even as the banking sector embraces digital transformation and customer experience initiatives, this case reveals how traditional pressure tactics remain embedded in collection departments.
For consumers struggling with debt, understanding your rights is essential. Provincial regulators maintain websites outlining specific protections, and nonprofit credit counseling services can help negotiate with creditors while ensuring communication stays within legal boundaries.
As household debt levels continue climbing amid rising interest rates and inflation, the pressure on collection departments to recover funds will likely intensify. This case serves as an important reminder that even Canada’s most established financial institutions must operate within the boundaries of consumer protection laws.
