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Collection and Debt Settlement Services Act

R.R.O. 1990, REGULATION 74

GENERAL

Consolidation Period:  From April 1, 2015 to the e-Laws currency date.

Last amendment:  O. Reg. 309/14.

This is the English version of a bilingual regulation.

CONTENTS

 

Application

1. (1) An application for registration as a collection agency or a renewal thereof shall be in a form approved by the Registrar.  R.R.O. 1990, Reg. 74, s. 1 (1); O. Reg. 309/14, s. 1 (1).

(2) An application for registration as a collector or renewal thereof shall be in a form approved by the Registrar.  R.R.O. 1990, Reg. 74, s. 1 (2); O. Reg. 309/14, s. 1 (2).

(3) A notice by a collection agency under clause 20 (1) (a), (b) or (c) of the Act or by a collector under subsection 20 (2) of the Act shall be in a form approved by the Registrar.  R.R.O. 1990, Reg. 74, s. 1 (3); O. Reg. 309/14, s. 1 (3).

(4) A request for voluntary cancellation of registration under subsection 8 (7) of the Act shall be in a form approved by the Registrar.  R.R.O. 1990, Reg. 74, s. 1 (4); O. Reg. 309/14, s. 1 (4).

(5) When notified by the Registrar, the applicant shall file,

(a) the examination fee prescribed in section 11;

(b) the appropriate fee prescribed in section 11; and

(c) the bond required by section 2.  R.R.O. 1990, Reg. 74, s. 1 (5).

Bonds

2. (1) Every applicant for registration as a collection agency shall be bonded.  R.R.O. 1990, Reg. 74, s. 2 (1).

(2) On an initial application, where the applicant has not acquired an operating collection agency, the amount of the bond shall be $5,000.  R.R.O. 1990, Reg. 74, s. 2 (2).

(3) On subsequent applications for maintenance of registration or where the applicant has acquired an operating collection agency, the amount of the bond shall be based upon the amount of money collected by the collection agency in the calendar year immediately preceding the date of the application for registration.  R.R.O. 1990, Reg. 74, s. 2 (3).

(4) Where the amount collected was,

(a) less than $50,000, the amount of the bond shall be $5,000;

(b) $50,000 or more but less than $100,000, the amount of the bond shall be $10,000;

(c) $100,000 or more but less than $150,000, the amount of the bond shall be $15,000;

(d) $150,000 or more but less than $250,000, the amount of the bond shall be $20,000; or

(e) $250,000 or more, the amount of the bond shall be $25,000,

provided, however, that where the collection agency is involved in a prepaid collection service the Registrar may require any of the aforementioned amounts to be increased by an additional amount of up to $20,000.  R.R.O. 1990, Reg. 74, s. 2 (4).

(5) The bond shall be,

(a) the bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance;

(b) a personal bond accompanied by collateral security; or

(c) the bond of a guarantor, other than an insurer licensed under the Insurance Act to write surety and fidelity insurance, accompanied by collateral security.  R.R.O. 1990, Reg. 74, s. 2 (5); O. Reg. 103/06, s. 1 (1, 2).

(6) The classes of negotiable security that may be accepted as collateral security for a bond are,

(a) bonds issued or guaranteed by Canada; or

(b) bonds issued or guaranteed by any province of Canada.  R.R.O. 1990, Reg. 74, s. 2 (6).

(7) The collateral security referred to in subsection (5) shall be deposited with the Minister of Finance and maintained at a market value of not less than the face value of the bond.  R.R.O. 1990, Reg. 74, s. 2 (7).

(8) The bond referred to in subsection (5) shall be in a form approved by the Registrar. O. Reg. 309/14, s. 2.

3. A bond may be cancelled by any person bound thereunder by giving to the Registrar and the collection agency named in the bond at least two months notice in writing of intention to cancel and, subject to section 4, the bond shall be deemed to be cancelled on the date stated in the notice, which date shall be not less than two months after the receipt of the notice by the Registrar.  R.R.O. 1990, Reg. 74, s. 3.

4. For the purpose of every act or omission occurring,

(a) during the period of registration; or

(b) during the period prior to cancellation of the bond under section 3, where there has been no termination of registration,

every bond shall continue in force and the collateral security, if any, shall remain on deposit for a period of two years following the termination of the registration or the cancellation of the bond, as the case may be.  R.R.O. 1990, Reg. 74, s. 4.

5. Where a bond has been cancelled or the registration has been terminated, and the bond has not been forfeited, the Minister of Finance may, two years following termination of the registration to which the bond relates or two years after the cancellation of the bond, deliver the collateral security to the person who deposited such security.  R.R.O. 1990, Reg. 74, s. 5.

6. The Registrar may declare any bond mentioned in section 2 forfeited,

(a) where a collection agency, in respect of whose conduct the bond has been conditioned or any collector or official of the collection agency has been convicted of,

(i) an offence under the Act, or

(ii) an offence involving fraud or theft or conspiracy to commit an offence involving fraud or theft under the Criminal Code (Canada),

and the conviction has become final;

(b) where proceedings by or in respect of a collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned, have been taken under the Bankruptcy and Insolvency Act (Canada) or by way of winding-up and a receiving order under the Bankruptcy and Insolvency Act (Canada) or a winding-up order has been made, and the order has become final;

(c) where a judgment based on a finding of fraud has been given against a collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned, or against a collector or other official of the collection agency for money collected for any other person and the judgment has become final; or

(d) where judgment has been given against a collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned or a collector or other official of the collection agency on any claim involving a collection matter, and the judgment has remained unsatisfied for a period of ninety days,

and thereupon the amount thereof becomes due and owing by the person bound thereby as a debt due the Crown in right of Ontario.  R.R.O. 1990, Reg. 74, s. 6; O. Reg. 24/08, s. 1; O. Reg. 309/14, s. 3.

7. Where a bond secured by the deposit of collateral security is forfeited under section 6, the Minister of Finance may sell the collateral security at the current market price.  R.R.O. 1990, Reg. 74, s. 7.

8. If the Crown in right of Ontario becomes a creditor of a person in respect of a debt to the Crown arising from section 6, the Registrar may take the proceedings that he or she sees fit under the Bankruptcy and Insolvency Act (Canada), the Courts of Justice Act, the Corporations Act or the Winding-up and Restructuring Act (Canada) for the appointment of an interim receiver, custodian, trustee, receiver or liquidator, as the case may be.  O. Reg. 24/08, s. 2.

9. (1) The Minister of Finance may in his or her discretion,

(a) assign any bond forfeited under section 6 and transfer the collateral security, if any;

(b) pay over any money recovered under the bond; or

(c) pay over any money realized from the sale of the collateral security under section 7,

to any person who,

(d) is a judgment creditor of any collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned, or a collector or other official of the collection agency, where the judgment was based on a claim arising out of a transaction involving a collection matter;

(e) in respect of a claim for less than $100 against any collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned, or a collector or other official of the collection agency, arising out of a transaction involving a collection matter, satisfies the Registrar as to the validity of such claim; or

(f) has proven a claim in bankruptcy against any collection agency, including any member of a partnership, in respect of whose conduct the bond has been conditioned, in respect of any claim arising out of a transaction involving a collection matter,

provided that the claim or transaction occurred during the period referred to in clause 4 (a) or (b).  R.R.O. 1990, Reg. 74, s. 9 (1).

(2) The Minister of Finance may, where he or she considers it advisable, without any order, pay the whole or any part of the proceeds referred to in clause (1) (b) or (c) to the Accountant of the Superior Court of Justice in trust for such persons as are or may become entitled to share in the proceeds of the bond under the provisions of subsection (1).  R.R.O. 1990, Reg. 74, s. 9 (2).

10. Where a bond has been forfeited and the Minister of Finance has not received notice in writing of any claim against the proceeds of the bond or such part as remains in his or her hands within two years of the forfeiture, the Minister of Finance may pay the proceeds of the bond or the collateral security, or any part remaining, to any person who made a payment under the bond or who deposited the collateral security, after first deducting the amount of any expenses that have been incurred in connection with any investigation or otherwise relating to the collection agency in respect of whose conduct the bond was conditioned.  R.R.O. 1990, Reg. 74, s. 10.

Fees

11. The following fees are payable to the Registrar:

1. $290, upon application for registration as a collection agency or renewal of the registration.

2. $290, for each branch office of the collection agency.

3. $190, upon application for registration as a collector or renewal of the registration.

4. $10, for each written examination of an applicant for registration as a collection agency.  O. Reg. 515/97, s. 1; O. Reg. 54/98, s. 1.

12. (1) No person shall be registered as a collection agency unless the person,

(a) has had at least two years of actual experience in all phases of the collection agency business, or has related experience that, in the opinion of the Registrar, is equivalent to that actual experience; and

(b) is 18 years of age or over, if the applicant for registration is an individual.  O. Reg. 231/00, s. 1.

(2) No person shall be registered as a collector unless the person,

(a) is an individual who is a Canadian citizen or has been lawfully admitted to Canada for permanent residence and who is ordinarily resident in Canada; and

(b) is 18 years of age or over.  O. Reg. 231/00, s. 1.

Terms and Conditions of Registration

13. (1) Every registration expires on the date shown on the certificate of registration unless an application for renewal of registration in a form approved by the Registrar, together with the appropriate fee prescribed in section 11, is filed with the Registrar prior to the date of expiry.  R.R.O. 1990, Reg. 74, s. 13 (1); O. Reg. 309/14, s. 4 (1).

(2) Every applicant for registration shall state in the application an address for service in Ontario.  R.R.O. 1990, Reg. 74, s. 13 (2).

(3) A collection agency shall not operate any branch office unless such branch office is authorized by the registration.  R.R.O. 1990, Reg. 74, s. 13 (3).

(4) Every applicant for registration as a collection agency shall file with the Registrar copies of all forms and form letters that it proposes to use in dealing with debtors, as well as copies of forms of agreement that it proposes to use in its dealings with persons for whom it acts or proposes to act.  R.R.O. 1990, Reg. 74, s. 13 (4).

(5) Where an applicant for registration is a corporation, a copy of a current financial statement prepared by a person licensed under the Public Accounting Act, 2004, or where the corporation is recently incorporated or is a sole proprietorship or partnership, an opening financial statement prepared by a person licensed under the Public Accounting Act, 2004 shall be attached to the application.  R.R.O. 1990, Reg. 74, s. 13 (5); O. Reg. 24/08, s. 3.

(6) A copy of the current financial statement prepared by a person licensed under the Public Accounting Act, 2004 shall be attached to the application for renewal referred to in subsection (1).  R.R.O. 1990, Reg. 74, s. 13 (6); O. Reg. 24/08, s. 3.

(7) A registration of a collection agency is not transferable.  R.R.O. 1990, Reg. 74, s. 13 (7).

(8) A collector shall be registered only where he or she is to be employed by a registered collection agency.  R.R.O. 1990, Reg. 74, s. 13 (8).

(9) Where a collector has not applied for transfer of registration within sixty days after termination of employment and where he or she intends to continue to act as a collector, he or she shall apply for registration by filing an application in a form approved by the Registrar.  R.R.O. 1990, Reg. 74, s. 13 (9); O. Reg. 309/14, s. 4 (2).

(10) Every person registered as a collection agency shall operate from a permanent place of business in Ontario that is not a dwelling and that shall be open during normal business hours. O. Reg. 309/14, s. 4 (3).

(11) The Registrar may require further information or material to be submitted by any applicant or any registered person within a specific time limit and may require verification by affidavit or otherwise of any information or material then or previously submitted.  R.R.O. 1990, Reg. 74, s. 13 (11).

(12) Every collection agency or branch thereof shall keep on its premises proper records and books of accounts showing money received and money paid out and such books shall include a receipts journal, disbursements journal, general journal, clients’ ledger, general ledger and such additional records as the Registrar considers necessary in accordance with accepted principles of double entry bookkeeping.  R.R.O. 1990, Reg. 74, s. 13 (12).

(13) An entry in a record book of account kept under subsection (12) shall be retained for a period of six years from the date of the entry.  R.R.O. 1990, Reg. 74, s. 13 (13).

(14) Every person registered as a collection agency who collects debts for a single creditor who exercises control directly or indirectly over the agency shall not carry on business except on behalf of that creditor and shall disclose the full name of that creditor on all correspondence and communications.  R.R.O. 1990, Reg. 74, s. 13 (14).

(15) No person who is registered as a collector or as a collection agency shall engage directly or indirectly in the business of lending money whether as principal or as agent.  R.R.O. 1990, Reg. 74, s. 13 (15).

(16) Where a notice of intention to cancel a bond has been served on the Registrar under section 3 and the bond has been cancelled on the date stated in the notice, the registration of the collection agency shall no longer be valid unless prior to that date a replacement bond has been received by the Registrar.  R.R.O. 1990, Reg. 74, s. 13 (16).

14. A financial statement referred to in subsection 13 (6) shall include a statement by the person who prepares the financial statement that the registrant has complied with the provisions of this Regulation respecting trust accounts.  R.R.O. 1990, Reg. 74, s. 14.

15. (1) Every individual applicant and every active officer or director of a corporate applicant or registrant who has not been previously registered shall pass a written examination based on the Act and such further subject matters as the Registrar prescribes.  R.R.O. 1990, Reg. 74, s. 15 (1).

(2) Every collection agency that is not a corporation and every officer or director of a corporate collection agency, who has been previously registered but has not been registered under this Act for a period of one year or more preceding an application for registration, shall write and pass the examination referred to in subsection (1).  R.R.O. 1990, Reg. 74, s. 15 (2).

(3) No corporation shall be registered or shall maintain its registration as a collection agency unless all of its officers and directors who are actively engaged in the business of the agency have met the examination requirements.  R.R.O. 1990, Reg. 74, s. 15 (3).

(4) The examination shall be conducted in the presence of a presiding officer appointed by the Registrar or his or her nominee.  R.R.O. 1990, Reg. 74, s. 15 (4).

(5) The examination papers shall be marked by the Registrar or his or her nominee.  R.R.O. 1990, Reg. 74, s. 15 (5).

(6) Not less than 75 per cent shall be considered a pass mark for the examination.  R.R.O. 1990, Reg. 74, s. 15 (6).

(7) The Registrar or his or her nominee may review, and, where so requested in writing by an applicant who fails to obtain the pass mark prescribed in subsection (6), shall review the examination paper and make such changes in the marks obtained as he or she considers proper.  R.R.O. 1990, Reg. 74, s. 15 (7).

(8) Upon written application to the Registrar, an applicant who fails to obtain the pass mark prescribed in subsection (6) may take a further examination at any time, but where he or she fails the second examination, the applicant shall not take any subsequent examination until after the expiration of four months from the date of his or her latest examination.  R.R.O. 1990, Reg. 74, s. 15 (8).

16. Where a collection agency is a corporation it shall, within five days after the event, notify the Registrar in a form approved by the Registrar where there is a change in a director of the corporation or where there is a change in its controlling interest.  R.R.O. 1990, Reg. 74, s. 16; O. Reg. 309/14, s. 5.

Trust Funds

17. (1) All funds received by a collection agency in the normal course of business from clients or debtors, other than those which clearly represent payment for fees earned, and all advance payments or deposits for services to be rendered or expenses to be incurred at some future date are deemed to be trust funds.  R.R.O. 1990, Reg. 74, s. 17 (1).

(2) Every collection agency or branch thereof shall maintain in respect of all trust funds that come into its hands a separate trust account in any Ontario branch of a bank, a corporation registered under the Loan and Trust Corporations Act or a credit union as defined in the Credit Unions and Caisses Populaires Act, 1994 authorized by law to accept deposits, and such account shall be designated as the “Collection and Debt Settlement Services Act Trust Account” in English and “compte en fiducie prévu par la Loi sur les services de recouvrement et de règlement de dette” in French. O. Reg. 309/14, s. 6.

(3) For the purposes of this section, no collection agency or branch thereof shall maintain more than one account designated as a trust account without first notifying the Registrar and obtaining the Registrar’s consent in writing.  R.R.O. 1990, Reg. 74, s. 17 (3).

(4) All trust funds received by a collection agency or branch thereof whether by cash, cheque, or otherwise, shall be deposited in the collection agency trust account within two banking days of their receipt.  R.R.O. 1990, Reg. 74, s. 17 (4).

(5) No collection agency shall disburse or withdraw any money held in trust, except in accordance with the terms and conditions upon which the money was received or as otherwise provided.  R.R.O. 1990, Reg. 74, s. 17 (5).

(6) Where a collection agency collects debts for other persons in consideration of the payment of a commission or other remuneration it shall remit all money collected to the persons entitled thereto in accordance with subsection 18 (1).  R.R.O. 1990, Reg. 74, s. 17 (6).

(7) Nothing in this section shall be construed as affecting the right to any remedy available in law to a collection agency or any other person having a lawful claim to the money held in the trust account referred to in subsection (2).  R.R.O. 1990, Reg. 74, s. 17 (7).

(8) When so requested in writing by the Registrar or a person entitled to an accounting, every collection agency shall account within thirty days for all trust funds received from or on behalf of the person entitled to such accounting.  R.R.O. 1990, Reg. 74, s. 17 (8).

18. (1) Every collection agency shall without any notice or demand account for all money collected and pay the money less the proper fees of such collection agency, to the person entitled thereto on or before the 20th day of the month following the month in which the money was collected, but when the money collected and due is less than $15, payment to the person entitled thereto shall be made within ninety days.  R.R.O. 1990, Reg. 74, s. 18 (1).

(2) Where for any reason a collection agency is unable to comply with subsection (1) and any money collected by it remains for a period of six months unclaimed by, or unpaid to, the person entitled to the money, it shall cause the money to be paid to the Minister of Finance who may pay the money to the person entitled thereto upon satisfactory proof being furnished by the person that the person is entitled to receive the money.  R.R.O. 1990, Reg. 74, s. 18 (2).

Exemptions

19. The Act does not apply to a telephone system or telephone company that is,

(a) engaged in the business of a collection agency on behalf of Tele-Direct Limited or Tele-Direct (Publications) Inc.; or

(b) collecting accounts through its normal procedures on behalf of other parties where use of a telecommunications system is an integral part of the service provided by such a party to its customers.  R.R.O. 1990, Reg. 74, s. 19.

19.1 (1) The restriction in subsection 4 (1) of the Act against a person acting as a collector, unless the person is registered by the Registrar under the Act, does not apply to a person employed by a not-for-profit corporation that is a registered charity as defined in the Income Tax Act (Canada) and that provides credit counselling services. O. Reg. 309/14, s. 7.

(2) Section 11 does not apply to a not-for-profit corporation that is a registered charity as defined in the Income Tax Act (Canada) and that provides credit counselling services. O. Reg. 309/14, s. 7.

(3) Section 15 does not apply to an officer or director of a not-for-profit corporation that is a registered charity as defined in the Income Tax Act (Canada) and that provides credit counselling services. O. Reg. 309/14, s. 7.

19.1.1 (1) Subsection 4 (2) and clause 22 (d) of the Act and section 21 of this Regulation do not apply to a collection agency or collector that is contacting a debtor in the name of a creditor pursuant to a written contract between the collection agency and the creditor under which,

(a) the collection agency is authorized to act in the name of the creditor to collect money owed that is no more than 60 days past due;

(b) the collection agency or collector is not compensated contingent on or based on the amount, if any, collected from the debtor;

(c) the collection agency or collector does not receive payment directly from the debtor and may not request that the debtor make any payment to the collection agency or collector; and

(d) the collector is required to give the debtor the name of the creditor and his or her own name in every contact with the debtor.  O. Reg. 466/01, s. 1; O. Reg. 309/14, s. 8.

(2) The exemptions in subsection (1) only apply to a registered collection agency or collector while engaged in the collection of money owed as described in that subsection and do not apply to the same collection agency or collector while engaged in any other activity.  O. Reg. 466/01, s. 1.

(3) A collection agency that is exempt under subsection (1) shall, before engaging in the activity described in that subsection, notify the Registrar in writing,

(a) that the collection agency has entered into a contract as described in that subsection; and

(b) of the name and address of the creditor.  O. Reg. 466/01, s. 1.

19.2 The Act does not apply to an authorized foreign bank within the meaning of section 2 of the Bank Act (Canada).  O. Reg. 24/08, s. 4.

Prohibited Practices and Methods in the Collection of Debts

20. In sections 21 to 25,

“contact” includes communication by e-mail or voice mail;

“debtor’s employer” includes any and all of the employer’s employees;

“spouse” means,

(a) a spouse as defined in section 1 of the Family Law Act, or

(b) either of two persons who live together in a conjugal relationship outside marriage.  O. Reg. 103/06, s. 2.

21. (1) No collection agency or collector shall demand payment, or otherwise attempt to collect payment, of a debt from a debtor unless the collection agency or collector has sent the debtor, by ordinary mail, a private written notice setting out the following information:

1. The name of the creditor to whom the debt is owed.

2. The balance owing on the debt.

3. The identity of the collection agency or collector who is demanding payment of the debt.

4. The authority of the collection agency or collector to demand payment of the debt.  O. Reg. 103/06, s. 2.

(2) No collection agency or collector shall make a telephone call to or a personal call on the debtor before the sixth day after mailing the written notice required by subsection (1).  O. Reg. 103/06, s. 2.

(3) Subsection (1) does not require that the written notice be sent before a written demand for payment but is satisfied if the written demand for payment is contained in the written notice.  O. Reg. 103/06, s. 2.

(4) If a debtor states to a collection agency or collector that the debtor has not received the notice required by subsection (1), the collection agency or collector shall send the notice to the debtor at the address provided by the debtor, and no demand for payment, or other attempt to collect payment, of the debt shall be made before the sixth day after the day the notice is sent.  O. Reg. 103/06, s. 2.

22. (1) If a debtor sends a collection agency or collector, by registered mail, a letter stating that the debtor disputes the debt and suggests that the matter be taken to court, the collection agency or collector shall not thereafter contact or attempt to contact the debtor, unless the debtor consents to or requests the contact.  O. Reg. 103/06, s. 2.

(2) If a debtor or his or her lawyer or licensed paralegal sends a collection agency, by registered mail, a letter requesting that the collection agency communicate only with the debtor’s lawyer or licensed paralegal, and setting out the lawyer or licensed paralegal’s address and telephone number, the collection agency or a collector shall not thereafter contact or attempt to contact the debtor other than through the debtor’s lawyer or licensed paralegal unless the debtor consents to or requests the contact. O. Reg. 309/14, s. 9.

(3) No collection agency or collector shall contact or attempt to contact the debtor’s spouse, a member of the debtor’s family or household, or a relative, neighbour, friend or acquaintance of the debtor unless,

(a) the person being contacted has guaranteed to pay the debt and the contact is in respect of that guarantee;

(b) the debtor has requested the collection agency or collector to discuss the debt with the person being contacted; or

(c) the collection agency or collector does not have the debtor’s home address or home telephone number and the contact is for the sole purpose of obtaining the debtor’s home address or home telephone number.  O. Reg. 103/06, s. 2.

(4) No collection agency or collector shall contact or attempt to contact the debtor’s employer unless,

(a) the employer has guaranteed to pay the debt and the contact is in respect of that guarantee;

(b) the debtor has given the collection agency or collector written authorization to contact the debtor’s employer;

(c) the contact occurs only once and is for the sole purpose of confirming one or more of the debtor’s employment, the debtor’s business title and the debtor’s business address; or

(d) the contact is in respect of payments pursuant to,

(i) a wage assignment given to a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994, or to a caisse populaire within the meaning of that Act, or

(ii) an order or judgment made by a court in favour of the collection agency or collector or of a creditor who is a client of the collection agency or collector.  O. Reg. 103/06, s. 2.

(5) No collection agency or collector shall,

(a) collect or attempt to collect a debt from a person who the collection agency or collector knows or reasonably ought to know is not liable for the debt; or

(b) contact or attempt to contact a person for the purpose of collecting a debt if the person has informed the collection agency or collector that the person is not who the collection agency or collector intends to contact, unless the collection agency or collector first takes all reasonable precautions to ensure that the person is, in fact, who the collection agency or collector intends to contact.  O. Reg. 103/06, s. 2.

(6) No collection agency or collector shall engage in conduct described in any of the following paragraphs with respect to the debtor, the debtor’s spouse, a member of the debtor’s family or household, a relative, neighbour, friend or acquaintance of the debtor, the debtor’s employer, a person who guaranteed the debt or a person mistakenly believed to be the debtor:

1. Make a telephone call or personal call at any of the following times, except at the request of the person being contacted:

i. On a Sunday, other than between the hours of 1 p.m. and 5 p.m. local time of the place where the contact is being made.

ii. On any day of the week other than a Sunday, between the hours of 9 p.m. and 7 a.m. local time of the place where the contact is being made.

iii. Despite subparagraphs i and ii, on any holiday listed in subsection (7).

2. Contact the person more than three times in a seven-day period on behalf of the same creditor, subject to subsections (8) and (9).

3. Publish or threaten to publish the debtor’s failure to pay.

4. Use threatening, profane, intimidating or coercive language.

5. Use undue, excessive or unreasonable pressure.

6. Otherwise communicate in such a manner or with such frequency as to constitute harassment.  O. Reg. 103/06, s. 2.

(7) For the purposes of subparagraph 1 iii of subsection (6), the following days are holidays:

1. New Year’s Day.

1.1 Family Day, being the third Monday in February.

2. Good Friday.

3. Revoked:  O. Reg. 24/08, s. 5.

4. Victoria Day.

5. Canada Day.

6. Civic Holiday.

7. Labour Day.

8. Thanksgiving Day.

9. Revoked:  O. Reg. 24/08, s. 5.

10. Christmas Day.

11. December 26.

12. Any day fixed as a holiday by proclamation of the Governor General or Lieutenant Governor.  O. Reg. 103/06, s. 2; O. Reg. 588/07, s. 1; O. Reg. 24/08, s. 5.

(8) For the purposes of paragraph 2 of subsection (6), the following types of contact shall not be counted:

1. Contact made by ordinary mail.

2. Contact consented to or requested by the person being contacted.

3. Contact of a person other than the debtor where the purpose of the contact is to locate the debtor.  O. Reg. 103/06, s. 2.

(9) The prohibition set out in paragraph 2 of subsection (6) does not apply to a collection agency or collector until such time that the collection agency or collector speaks with the person being contacted either in a telephone call or a personal call, but the prohibition applies thereafter.  O. Reg. 103/06, s. 2.

23. (1) No collection agency or collector shall directly or indirectly threaten, or state an intention, to commence a legal proceeding for the collection of a debt, unless the collection agency or collector has the written authority of the creditor to commence the proceeding, and the proceeding is not otherwise prohibited by law.  O. Reg. 103/06, s. 2.

(2) No collection agency or collector shall recommend to a creditor that a legal proceeding be commenced for collection of a debt, unless the collection agency or collector first gives notice to the debtor of its intention to make the recommendation.  O. Reg. 103/06, s. 2.

(3) No collection agency or collector shall commence a legal proceeding for the collection of a debt,

(a) in the name of the creditor, unless the collection agency or collector has the written authority of the creditor to do so; or

(b) as a plaintiff, unless the following conditions have been satisfied:

(i) The creditor has assigned the debt to the collection agency or collector by written instrument and for valuable consideration, and the creditor has no further interest in the debt.

(ii) If a legal proceeding was commenced by the creditor prior to assigning the debt, the collection agency or collector has given written notice to the debtor of the assignment.

(iii) If a legal proceeding was not commenced by the creditor prior to assigning the debt, the collection agency or collector has given written notice to the debtor of the assignment and, either separately or together with the written notice of assignment, has given notice to the debtor of its intention to commence a legal proceeding.  O. Reg. 103/06, s. 2.

24. No collection agency or collector shall,

(a) give any person, directly or indirectly, by implication or otherwise, any false or misleading information;

(b) misrepresent to any person contacted in respect of the debt the purpose of the contact or the identity of the creditor or of the collection agency or collector; or

(c) use, without lawful authority, any summons, notice, demand or other document that states, suggests or implies that it is authorized or approved by a court in Canada or another jurisdiction.  O. Reg. 103/06, s. 2.

25. (1) Charges incurred by a collection agency or collector in collecting a debt and charges incurred by a creditor to retain a collection agency or collector do not form part of the debt owed by the debtor, and no collection agency or collector shall collect or attempt to collect any such charges, subject to subsection (2).  O. Reg. 103/06, s. 2.

(2) A collection agency or collector may collect, as part of the debt owed by a debtor, all reasonable charges incurred by the collection agency or collector in respect of the debtor’s dishonoured cheques if,

(a) the agreement between the creditor and the debtor provides that the debtor is liable for such charges if incurred by the creditor and sets out the amount of the charge;

(b) the creditor has provided information to the debtor, by any method, that the debtor is liable for such charges if incurred by the creditor and the debtor knows or reasonably ought to know of his or her liability for such charges and the amount of the charge; or

(c) the collection of such charges is expressly permitted by law.  O. Reg. 103/06, s. 2.

Note: On July 1, 2015, the day section 4 of Schedule 1 to the Stronger Protection for Ontario Consumers Act, 2013 comes into force, the Regulation is amended by adding the following sections: (See: O. Reg. 309/14, ss. 10, 13 (4))

Debt Settlement Services Agreements

26. (1) For the purposes of subsection 16.3 (1) of the Act, a collection agency or collector shall not communicate or cause to be communicated the following representations relating to a debt settlement services agreement:

1. A claim that the services are provided on a non-profit or charitable basis, if they are not.

2. A claim that the collection agency’s operations or programs are approved by, or a part of, a program run by the government of Ontario, the government of Canada, or the government of any other jurisdiction outside Ontario, if they are not.

3. Any reference to registration under the Act, other than the collection agency’s or collector’s registration number under the Act.

4. Any claim of savings or other results for debtors that is not based on typical results.

5. Any claim that misrepresents or exaggerates the services provided under the agreement or the effects or benefits of those services, including but not limited to,

i. a claim that using the services will or may deter the efforts of a creditor or agent of a creditor to collect a debt, and

ii. a claim that using the services will or may prevent legal action or garnishment of the debtor’s wages. O. Reg. 309/14, s. 10.

(2) For the purposes of paragraph 4 of subsection (1), typical results means the average results obtained by the collection agency, over a period of at least six months and no longer than 12 months in the preceding calendar year, in respect of all debts that were the subject of a debt settlement services agreement during that period. O. Reg. 309/14, s. 10.

(3) A collection agency shall communicate or cause to be communicated the following representations in the circumstances described:

1. If the collection agency has a website, any place on the website that requests a debtor’s personal information shall clearly and prominently display the collection agency’s registered name, principal business address in Ontario, telephone number, fax number, e-mail address and registration number under the Act, set out as “Ontario Registration # [insert registration number]” in English or “No d’inscription en Ontario : [insert registration number]” in French.

2. If an advertisement is made by or on behalf of a collection agency, the advertisement shall clearly and prominently state the collection agency’s registered name and registration number under the Act set out as “Ontario Registration # [insert registration number]” in English or “No d’inscription en Ontario : [insert registration number]” in French. O. Reg. 309/14, s. 10.

27. (1) For the purposes of clause 16.5 (1) (a) of the Act, the following are requirements that a debt settlement services agreement entered into between a collection agency and a debtor is required to meet:

1. For each debt settlement services agreement with a debtor, the collection agency shall indicate which of the following methods of negotiating the settlement of the debtor’s debts the collection agency will pursue:

i. The collection agency will put forward to each of the debtor’s creditors a proposed schedule of payments in respect of each debt.

ii. The collection agency will put forward to each of the debtor’s creditors, on or before a specified date, an offer to settle the debt with a one-time payment that is less than the amount of the debt.

2. If the collection agency proposes to settle a debtor’s debts by the method described in subparagraph 1 i,

i. the agreement shall include the proposed schedule of payments for each debt,

ii. the agreement shall specify that the maximum payment or security for payment that the collection agency may require or accept for services provided under the agreement shall be 15 per cent of every payment made by the debtor to a creditor in respect of a debt to which the agreement applies, and

iii. the first page of the agreement shall be the document entitled “Repaying Debt and Credit Counselling—What You Need to Know” and dated November 24, 2014, which is available on a Government of Ontario website.

3. If the collection agency proposes to settle a debtor’s debts by the method described in subparagraph 1 ii,

i. the agreement shall state for each debt the date on which an offer to settle will be made and the amount of the one-time payment that will be offered,

ii. the agreement shall specify that the maximum payment or security for payment that the collection agency may require or accept for services provided under the agreement shall be 10 per cent of the amount of each debt, at the time the agreement is signed, that is settled through the collection agency, and

iii. the first page of the agreement shall be the document entitled “Settling Debt—What You Need to Know” and dated November 24, 2014, which is available on a Government of Ontario website.

4. Unless a termination provision set out in the agreement provides for an earlier termination date, the agreement terminates 18 months after the later of,

i. the date the agreement was entered into,

ii. the last day on which a payment was made in connection with the agreement, or

iii. if any debts to which the agreement applies are settled by or through the collection agency, the last day on which such a settlement occurred.

5. The agreement shall disclose whether or not the collection agency receives or will attempt to receive funding from a creditor in exchange for entering into a debt settlement services agreement with the debtor.

6. The agreement must include the following information, in addition to the information required under paragraphs 1 to 5:

i. The name, address and telephone number of the debtor.

ii. The collection agency’s registered name, principal business address in Ontario, telephone number, fax number, e-mail address, website address and registration number under the Act, set out as “Ontario Registration # [insert registration number]” in English or “No d’inscription en Ontario : [insert registration number]” in French.

iii. The names of any collectors who negotiated or concluded the agreement with the debtor on behalf of the collection agency, and their registration numbers under the Act, set out as “Ontario Registration # [insert registration number]” in English or “No d’inscription en Ontario : [insert registration number]” in French.

iv. The date on which the agreement was entered into.

v. The proposed termination date of the agreement, together with the statement that the termination date is subject to the rule specified in paragraph 4.

vi. An itemized list of all services that will be provided under the agreement.

vii. The details of all the debts to which the agreement applies, including each creditor’s name, the total amount owed to each creditor and the interest rate applicable to each debt.

viii. The total amount owed by the debtor to all creditors under the agreement.

ix. Any restrictions, limitations and conditions under the agreement.

x. A statement that the debtor is entitled to receive a written report on the performance of the agreement within 15 days after requesting it.

xi. The date and signature of the debtor, the collection agency and the collector who dealt with the debtor at the time the agreement was signed. O. Reg. 309/14, s. 10.

(2) A debt settlement services agreement may be amended, whether or not the agreement provides for amendment, by the express agreement of the debtor and collection agency. O. Reg. 309/14, s. 10.

(3) If a debt settlement services agreement is amended, the debtor may, without any reason, cancel the agreement at any time from the date that the amendment is agreed to until 10 days after receiving the written copy of the amended agreement, and subsections 16.7 (3), (4) and (5) of the Act apply to the cancellation. O. Reg. 309/14, s. 10.

(4) No amendment of a debt settlement services agreement is effective unless the amendment and the amended agreement meet all the requirements in the Act and this Regulation. O. Reg. 309/14, s. 10.

(5) An amendment to a debt settlement services agreement does not retroactively affect rights and obligations acquired by the debtor before the effective date of the amendment, and does not affect any debt that has already been settled under the agreement. O. Reg. 309/14, s. 10.

28. (1) A collection agency shall not require or accept any payment or security for payment for its services in respect of a debt owed by a debtor to a creditor until,

(a) the debtor has entered into an agreement with the creditor regarding the amount to be paid by the debtor to the creditor to settle the debt;

(b) the debtor has made at least one payment under an agreement mentioned in clause (a); and

(c) the collection agency has written evidence of the debtor’s payment mentioned in clause (b). O. Reg. 309/14, s. 10.

(2) If a collection agency provides debt settlement services to a debtor in respect of more than one creditor, the collection agency shall not require or accept payment or security for payment for its services in respect of any given creditor until the conditions mentioned in subsection (1) have been met in respect of the creditor. O. Reg. 309/14, s. 10.

(3) The amount that a collection agency may require or accept from a debtor as payment or security for payment for its services in respect of the debt owed to a creditor shall not exceed,

A × B/C

where,

A is the total amount that the collection agency may require or accept for its services in respect of all debts owed to all creditors, as set out in the debt settlement services agreement,

B is the amount of debt owed to the creditor,

C is the total amount of debt owed to all of the debtor’s creditors. O. Reg. 309/14, s. 10.

(4) A collection agency that proposes to negotiate settlement of a debtor’s debts using the method described in subparagraph 1 i of subsection 27 (1) may also charge a one-time fee of no more than $50, which may be charged before the conditions mentioned in subsection (1) have been met in respect of a creditor. O. Reg. 309/14, s. 10.

(5) A collection agency may charge a debtor a fee for a dishonoured cheque, but the fee shall not be greater than the actual amount charged to the collection agency in respect of the cheque by the financial institution that dishonoured the cheque. O. Reg. 309/14, s. 10.

(6) A collection agency that receives a notice demanding a refund under subsection 16.6 (5) of the Act shall provide the refund within 15 days after receiving the notice. O. Reg. 309/14, s. 10.

29. No collection agency or collector shall engage in any of the following practices or employ any of the following methods in providing debt settlement services to a debtor or in respect of a debt settlement services agreement with a debtor:

1. Restrict the debtor from having access to his or her consumer report, or make any oral or written representation suggesting that the debtor is restricted from having such access.

2. Restrict the debtor from communicating with his or her creditors.

3. Provide debt settlement services under a name other than the collection agency’s or collector’s registered name.

4. Fail to give a written report to the debtor on the performance of the agreement within 15 days after requesting it.

5. Offer or pay any compensation to a debtor in exchange for the debtor entering into a debt settlement services agreement.

6. Directly or indirectly require or accept any money for assisting a debtor to obtain an extension of credit other than an extension of time for the debtor to repay a debt.

7. Fail to inform a debtor’s creditors that the collection agency or collector is authorized to arrange or negotiate a schedule of payments or a one-time payment on the debtor’s behalf, within 15 days of becoming authorized.

8. Fail to inform a debtor of a refusal by a creditor to negotiate a schedule of payments or a one-time payment, within 15 days of the refusal.

9. Communicate information about a debtor’s debts to any person except the debtor, a guarantor of the debt, the debtor’s representative or a creditor of the debtor without the debtor’s written consent.

10. Fail to provide information as to how to contact the collection agency or collector during normal business hours.

11. Fail to respond to a debtor’s communications within a reasonable time.

12. Obtain a debtor’s contact information from a third party unless the third party named the collection agency or collector that would receive the information and the debtor explicitly consented to the contact information being shared with the collection agency or collector.

13. Misrepresent the time needed to achieve the results promised by the collection agency or collector.

14. Enter into a debt settlement services agreement with a debtor if it is apparent that the debtor’s creditors would not enter into an agreement to settle the debt.

15. Enter into a debt settlement services agreement with a debtor if it is apparent that the debtor is not able to protect his or her interests because of disability, illiteracy or inability to understand the agreement or similar factors.

16. Give any person false or misleading information. O. Reg. 309/14, s. 10.

30. (1) A collection agency or collector that provides debt settlement services shall keep on its premises the following records for every debt settlement services agreement with a debtor, whether the record was created by the collection agency or collector or created by a third party and used by the collection agency or collector:

1. A copy of the agreement.

2. Any receipts issued and disbursements made by the collection agency or collector on behalf of the debtor.

3. Copies of all correspondence relating to the debt settlement services provided by the collection agency or collector, including letters, e-mails and faxes to or from the debtor, any guarantor of the debtor’s debt, the debtor’s representative or the debtor’s creditors.

4. Records relating to any negotiation of debt repayments to creditors by the collection agency or collector.

5. Any other records created or used while dealing with the debtor, the debtor’s representative or the debtor’s creditors. O. Reg. 309/14, s. 10.

(2) A collection agency or collector that provides debt settlement services shall keep on its premises copies of all published advertisements and the records needed to support claims or statements made in the advertisements. O. Reg. 309/14, s. 10.

(3) Records required under subsection (1) or (2) shall be kept for six years after the last payment made in connection with the debt settlement services agreement, or the date of the last advertisement, as the case may be. O. Reg. 309/14, s. 10.

(4) A collection agency or collector shall provide to the Registrar a copy of any record mentioned in subsection (1) or (2) upon the Registrar’s request, within the time specified by the Registrar. O. Reg. 309/14, s. 10.

FormS 1-3 Revoked: O. Reg. 309/14, s. 11.

 

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