Consultation on Collection and Debt Settlement Services Act regulation reform
Bill or Act:
Collection and Debt Settlement Services Act
Summary of Decision:
Amendments to Ontario Regulation 74 under the Collection and Debt Settlement Services Act (CDSSA) will come into force along with amendments to the CDSSA passed in Bill 59, the Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017, on January 1, 2018.
Additional Regulation amendments concerning notices to debtors and trust accounts will come into force on July 1, 2018.
Together, the Putting Consumers First Act amendments to the CDSSA, the amendments to the General Regulation under the CDSSA, and the enactment of a Minister's Regulation will:
- Make technical changes throughout the General Regulation to implement the Bill 59 changes to the CDSSA requiring debt purchasers to register if collecting debts and ending collector registration;
- Exempt several activities from the CDSSA, such as billing services and activity by property managers and mortgage brokers, in their respective capacities, collecting debts other than from individuals (e.g., the Act would not govern debt collection from corporations). The Act would also not apply to activities governed under the Securities Act or Commodity Futures Act;
- Permit collection agencies to use e-mail or other electronic communications subject to a debtor withdrawing their consent;
- Allow agencies limited contact with possible debtors only for the purpose of verifying that they are using the correct contact information before sending collection notices;
- Improve notices that agencies must give debtors when commencing collection activity to provide debtors with more useful information;
- Eliminate bonding and clarify trust account requirements; and
- Through the related Minister's Regulation set out administrative penalties.
You may see the amended CDSSA, amended General Regulation and the Minister's Regulation at the links below.
The ministry wishes to thank those who contributed during the consultation process developing this regulation.
July 14, 2017
Summary of Proposal:
The Collection and Debt Settlement Services Act (the Act) has been amended by Bill 59, the Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017 to:
Require purchasers of outstanding debts to either use a registered collection agency or become a registered collection agency if collecting those debts;
End registration of individual collectors employed by collection agencies;
Authorize limits on the exemption of lawyers from the Act; and
Authorize use of administrative penalties to promote compliance with the Act.
To accompany bringing these amendments into force, a new regulation as well as amendments to the General Regulation made under the Act, are proposed to:
Make technical changes throughout the General Regulation to reflect the changes made to the Act regarding debt purchasing and collector registration;
Define when lawyers, paralegals and law firms must register under the Act in order to carry out collection activity; and
List which provisions of the Act and the regulations can be enforced by administrative penalty and set penalty amounts.
The proposals also suggest other improvements to the General Regulation:
Proposing several activities that the Act should not govern such as third party billing services and actions by property managers and mortgage brokers acting in their respective capacities;
Providing an exemption for paralegals similar to the exemption provided to lawyers and subjecting both exemptions to proposed limits;
Permitting collection agencies to use e-mail or other electronic communications with a debtor's consent;
Allowing agencies limited contact with possible debtors to verify that they are using the correct contact information before sending notices;
Improving notices that agencies must give debtors to provide more useful information;
Adding a new prohibited practice and modifying the rule on communication with consumers in ways that impose costs on them; and
Requiring agencies to record collection calls.
The consultation paper linked below explains the proposed regulation amendments and invites comments.
You may provide comments directly via the email link below or to the address set out in the consultation proposal.
Consultation on Collection and Debt Settlement Services regulation
Ministry of Government and Consumer Services
Policy, Planning and Oversight Division
56 Wellesley Street West, 6th Floor
Toronto, ON M7A 1C1
January 1, 2018