When Another Creditor’s Lawyer Comes Knocking (PIPEDA)

Sometimes the difficult conversation in a recovery file is with another creditor. Two lenders have interests in the same vehicle, and the other creditor’s lawyer wants information to move their file forward. The request starts with a balance or a document. Before long, it may extend to the borrower’s wider account records.

Cooperation can help resolve a lien dispute. But a firm letter, a short deadline or an allegation that your staff are “obstructing” does not answer whether the requested information can lawfully be shared.

The practical response is measured: identify what is being requested, establish the authority for disclosure and document the decision. Pressure should prompt a careful review, rather than an improvised release of the file.

Start with the information and the applicable law

Borrower files can contain personal information about individuals: contact details, financial history, payment records and supporting documents. A request concerning a corporate account can also reach personal information about a guarantor or another individual. Review the actual records instead of assuming that everything is public or that everything is confidential on the same basis.

The federal Personal Information Protection and Electronic Documents Act, commonly called PIPEDA, governs personal information in many commercial settings. The applicable framework depends on the organization and activity. Alberta and BC have private-sector privacy laws that may apply instead, while PIPEDA continues to apply in circumstances such as relevant cross-border transactions and federally regulated businesses. The Privacy Commissioner’s summary of Canadian privacy laws explains that distinction.

For teams handling Ontario, Alberta and BC portfolios, a single response template should therefore include a check of which law governs the disclosure.

A lawyer’s request needs a legal basis

Ask who the lawyer represents, what information is sought, why it is needed and what authority they rely on. Verify the requester through a trusted channel before sending records.

Consent and court orders can support disclosure, but they are not the only possible bases. PIPEDA contains exceptions to consent, including a provision concerning collection of a debt owed by the individual to the disclosing organization. The Privacy Commissioner’s debt-collection guidance illustrates that the exception has a specific purpose. It is not a general entitlement for another creditor to receive a borrower’s entire file.

Do not assume either that a demand must be honoured because it comes from counsel, or that every disclosure requires express consent or a new court order. Have the proposed disclosure assessed against the applicable law, any consent, the legal process and the particular documents. Privilege and other confidentiality obligations may need separate consideration.

Respond to the scope of the request

A useful review asks:

• What precise records or information are required for the stated purpose?
• Does the asserted authority cover those records and this recipient?
• Is there unrelated information about the borrower or another person?
• Could an appropriately limited extract or redacted document meet the lawful purpose?
• Who within the organization can approve the response, and how should it be delivered?

Redaction is a tool for controlling scope; it does not create authority to disclose. Equally, do not ignore a subpoena, court order or procedural obligation while reviewing an informal request. Escalate formal demands promptly and track the applicable response requirements.

Our corporate debt recovery practice considers these information issues alongside the underlying recovery strategy. Where a vehicle lien is involved, our guide to reviewing RSLA claims discusses the records needed to assess the asset dispute itself.

Give staff a clear escalation path

Keep the request, the authority supplied, the internal review and the response together. Record what was disclosed, to whom, when and on what basis. If more detail is needed before a decision can be made, explain that professionally and ask focused questions.

Staff should know who handles privacy decisions, which records require review and when to involve the person managing the legal file. Our team training article offers practical ideas for consistent handoffs as new people join.

The aim is to cooperate where there is a proper basis, protect personal information and keep the recovery file moving. If another creditor’s information demands are creating uncertainty, book a consultation to discuss the request and the next practical response.

Explore our corporate debt recovery services for businesses and lenders in Ontario, Alberta and British Columbia.