Executive Summary: Key Legal and Evidentiary Issues

• Jad Hammoud claimed $15,000 from Kingston Data and Credit Inc., alleging the debt collector improperly reported a $215 debt to TransUnion without complying with statutory notice requirements.
• Central to the dispute was whether Kingston transmitted the required written notice of claim to Hammoud before communicating with him orally, as mandated by the Loi sur le recouvrement de certaines créances.
• Hammoud also alleged that a Kingston representative verbally agreed not to disclose the debt to TransUnion if he settled within one week, an agreement Kingston denied.
• No audio recording of the May 14, 2025 telephone conversation was produced, and Hammoud offered no documentary evidence to support the alleged verbal agreement.
• Establishing causation between the debt disclosure and Hammoud's two Scotiabank credit refusals proved impossible, as the refusal letters did not reference the Kingston matter and many other factors could have influenced the outcome.
• The court found no fault on Kingston's part and no breach of contractual obligation, resulting in the dismissal of Hammoud's claim in its entirety.

Facts of the case

Jad Hammoud, a student working to improve his credit score, received a text message from Kingston Data and Credit Inc. on May 14, 2025, regarding an outstanding debt of $215 owed to a fitness centre. It was the first time Hammoud became aware that Kingston had been retained to collect this debt. Upon contacting Kingston the same day, Hammoud alleged that a representative agreed not to report the debt to credit bureau TransUnion if he settled within one week. Hammoud also claimed the representative told him the debt had not yet been disclosed to TransUnion — a statement that was inaccurate, as Kingston had already reported the debt to TransUnion on May 10, 2025. A few days after the call, Hammoud reached a settlement with the fitness centre and paid $98.83 on May 20, 2025, promptly informing Kingston. Between May 12 and June 10, Hammoud's credit score dropped by 26 points. By mid-June, Kingston updated TransUnion to reflect the debt as "settled" rather than "paid in full," as the total amount of $215 had not been fully paid — Hammoud having paid a combined total of approximately $129.82. The debt was reduced to $0 in Hammoud's credit file no later than July 19, 2025, and by August his credit score stood at 613. Hammoud also produced two Scotiabank credit refusal letters dated November 18, 2025 and January 16, 2026.

Statutory framework and obligations at issue

The case turned in large part on Kingston's compliance with the Loi sur le recouvrement de certaines créances and its implementing regulation. Article 34 of the Act requires a licensed debt collector to send a written notice of claim — in the prescribed form — before communicating orally with a debtor, and only after a five-day waiting period following that mailing. Article 44 of the Regulation specifies that the notice must conform to Form N-41. Kingston's record-keeping obligations were also at issue: Article 47(h) of the Regulation requires licensees to maintain a register recording the date the notice of claim was sent, while Article 48(b) requires that a copy of the notice be retained. Article 49 clarifies, however, that retention of the actual document is not required where the register contains sufficient information to reconstruct its full content.

Reasoning and analysis

Kingston's representative testified that a written notice of claim had been mailed to Hammoud on March 6, 2025, and that a follow-up email was sent on March 13, 2025. Receiving no response, Kingston reported the debt to TransUnion on May 10, 2025. However, Kingston produced neither the letter nor the email, relying instead on internal computer records and a template letter. Hammoud denied receiving either communication and noted that the address used for the mailing was incomplete. The court acknowledged that Kingston's evidence was insufficient to conclusively disprove Hammoud's account, but held that Hammoud's lack of awareness of the collection process as of May 14, 2025 did not automatically render the May 10 disclosure to TransUnion wrongful. Having received no response after sending the required notice, Kingston was entitled to proceed on the basis that Hammoud had not addressed the claim, and the court found no regulatory breach in Kingston's reporting of the debt. On the alleged verbal agreement, the court found it implausible that a Kingston representative would have committed to withholding a disclosure that had already been made to TransUnion four days earlier. No documentary or audio evidence of such an agreement was produced. The court also accepted Kingston's position that it was entitled to verify Hammoud's May 20 payment claim directly with the fitness centre before acting on it, and that characterizing the transaction as a "settlement" rather than "payment in full" was legally accurate given that only $129.82 of the $215 debt had been paid. As for the Scotiabank refusals, the court found no causal link between those decisions and Kingston's conduct, noting that the letters did not identify the Kingston matter as a reason for refusal, the type and amount of credit requested were unspecified, and numerous other factors could have contributed to the outcome.

Ruling and overall outcome

The Court of Québec, Small Claims Division, found that the evidence disclosed no fault capable of engaging Kingston's liability and no breach of any contractual commitment. While the court acknowledged that the situation caused Hammoud stress and inconvenience, it concluded that his claim was unfounded. The court rejected Hammoud's demand for $15,000 — which comprised claims for credit score damage ($3,000), punitive damages ($2,500), emotional distress ($4,000), lost time and inconvenience ($3,500), and breach of an alleged verbal agreement ($2,000) — and dismissed the action in its entirety, with costs. Kingston Data and Credit Inc. was the successful party; no monetary award was granted in Hammoud's favour.