Choosing a collection agency starts with two checks most creditors skip. Confirm the agency holds a current Alberta licence, which you can verify yourself in a public search rather than taking anyone’s word for it. Then understand how your money is held between the moment a debtor pays and the moment it reaches your account. Both checks should happen before becoming a client of any agency, because that is where the real financial risk in this relationship sits.
Key Takeaways
- Alberta requires collection agencies and collectors to be licensed.
- Licence status is publicly searchable, so verification is quick.
- Collectors hold individual licences separate from the agency’s.
- Funds collected on your behalf are held in a regulated trust account.
- Trust funds cannot be co-mingled with the agency’s own money.
- Recovery performance and reporting matter more than the headline rate.
Start by Verifying the Licence
This is the fastest filter available and almost nobody uses it.
What Alberta Requires
The Government of Alberta requires all collection agencies, collectors, debt repayment agencies, and debt repayment agents to be licensed under the Consumer Protection Act and the Collection and Debt Repayment Practices Regulation.
Exemptions exist and they turn on who is doing the collecting rather than the type of debt. A business collecting a debt it is owed directly, a lawyer collecting for a client, and a civil enforcement bailiff seizing security all fall outside the licensing requirement. Placing accounts with a third party does not.
How to Check It Yourself
Service Alberta maintains a public search where you can find out if a business is licensed. Only active licences appear, so an agency that is not listed is either unlicensed or listed under a different legal entity name.
Two practical notes from the search guidance. Use single-word searches, since the name must match the legal entity exactly. Where a business is operating in Alberta but does not appear, Service Alberta directs enquiries to the Consumer Contact Centre for confirmation rather than leaving you to assume the worst.
Collectors Are Licensed Individually
The agency licence is not the whole picture. Individual collectors hold their own licences, and Service Alberta’s compliance standards require collectors to provide the name shown on their licence in all contacts and correspondence.
That matters for a creditor because it tells you the people actually working your file are accountable in their own right, not simply employees of a licensed company. Ask how the agency confirms every collector touching your accounts is currently licensed.
Trust Accounts: Where Your Money Sits Before It Reaches You
This is the protection creditors least often know about and the one that matters most when something goes wrong.
What the Regulation Requires
When a debtor pays, the money does not belong to the agency. It is held on your behalf, and Alberta regulates how.
Under the Collection and Debt Repayment Practices Regulation, an agency must establish a complete and accurate register for the trust accounts it maintains, recording all money collected or received from a debtor and all amounts paid out. That register must be available for inspection by an inspector at a place in Alberta, and the portion relating to a debtor must be kept for at least three years after the last entry concerning that debtor.
Service Alberta’s compliance standards add that there must be no co-mingling of funds in a trust account, and that money not received from debtors on behalf of another party cannot be deposited into trust. Trust account information must be registered with the Director.
What This Means for You
Two questions follow naturally. What happens to trust funds if the agency ceases operating, and can the agency produce trust account records relating to your accounts on request.
Neither is an awkward thing to ask. A properly run agency answers both without hesitation, because the framework already requires the records to exist.
Nine Questions to Ask Before You Sign
Each of these has a good answer and a revealing one.
- What is your Alberta licence number? A good answer is the number, immediately. Licensees are required to confirm their licensing on request, so hesitation here has already told you something.
- Are your collectors individually licensed, and how do you track that? Look for a specific process. Vagueness suggests nobody is checking.
- What is your contingency rate, and how does it change by account age and balance? Expect a structure. A single flat number across all account types usually means the pricing has not been thought through.
- What costs sit outside the contingency fee? Court filing fees and disbursements normally do. You want that stated before placement, not discovered afterward.
- What is your recovery rate on accounts like mine? A good answer is qualified by account age and type. A bad answer is a single impressive percentage with no context.
- How and when are recovered funds remitted? Expect a defined cycle and a clear trigger for payment runs. Vague answers about remitting when convenient are a genuine warning sign.
- What reporting will I receive and how often? You are looking for visibility into which accounts are moving, not a monthly total.
- What happens to accounts you cannot collect? Ask whether they are returned, held, or referred, and on what timeline.
- Are you licensed in every province where my debtors are located? Licensing is provincial, and an agency contacting debtors in another province needs authority there.
Judge Performance, Not the Headline Rate
The lowest contingency rate is frequently the most expensive choice, because what returns to your bank account is recovery rate multiplied by the fee structure rather than the fee structure alone.
The only way to know which agency you have is ongoing client reporting that shows performance by account age and placement cohort rather than a single figure at month end. Ask what the reporting looks like before you sign, since agencies confident in their results describe it readily.
Matching the Agency to Your Ledger
Capability matters as much as compliance, and the requirements differ by what you are placing.
A ledger of business-to-business invoices needs an agency with real experience in commercial debt collection, including entity verification and the ability to work with contracts, purchase orders, and delivery records. A high-volume file of individual accounts needs consumer debt collection capacity and the compliance discipline that comes with it.
Where accounts may need to proceed to court, ask whether the agency has in-house legal services or refers out. Both models work. The difference is whether escalation happens as a continuation of the same file or as a fresh handoff to counsel who has to start from the beginning.
Common Questions About Choosing a Collection Agency
The questions below come up in most first conversations.
Are collection agencies licensed in Alberta?
Yes. Agencies and their individual collectors must be licensed under the Consumer Protection Act and the associated regulation, and licence status can be verified through Service Alberta’s public search.
How do I know they will actually remit what they collect?
Funds collected on your behalf are held in a regulated trust account with a register the agency must maintain and make available for inspection.
Should I ask for references from other creditors?
Yes, and ask for ones in your industry with a similar ledger profile. An agency that performs well on high-volume consumer accounts is not automatically the right fit for a handful of large commercial invoices, and the reference conversation surfaces that faster than a capability deck.
What should I be given before signing?
A written agreement setting out the rate structure, what falls outside it, remittance timing, reporting, and how accounts are returned or closed. Anything agreed verbally should appear in it.
Can I place accounts with more than one agency?
You can, though not the same accounts simultaneously, which creates confusion for the debtor and disputes about who earned the fee. Some creditors split ledgers by type or run a trial placement before committing volume.
Verify First, Then Talk About Accounts
Confirming a licence, asking for the number, and understanding how trust funds are handled will tell you more about an agency than an hour of conversation about capability.
Bison Credit Solutions has been recovering receivables for Canadian businesses since 1992, working commercial and consumer accounts on a contingency basis with no charge where nothing is collected. Every question in this article is one worth asking us.
Contact Bison Credit Solutions to discuss your accounts and how third-party collections would work for your business.
