Consultation Paper On Debt Collection Legislation Released By Government Of Ontario

  • By Collectrite Collections
  • 23 Aug, 2017
Recently, the Ontario Ministry of Government and Consumer Services issued a consultation paper entitled " Consultation on Collection and Debt Settlement Services Act Regulation Reform ," addressing various items relating to debt collection regulation in Ontario. Following the recent enactment of Bill 59, which amended the Collection and Debt Settlement Services Act (Ontario) to:
  1. Require purchasers of debt to use a collection agency or register themselves
  2. Ended the registration requirement for individual collectors employed by collection agencies
  3. Authorized limits on the exemption of lawyers 
  4. Authorized administrative penalties
The Consultation Paper, among other things, proposes draft regulation language implementing these amendments and proposes to exempt the following from the application of the Act:
  • Third party billers – Creditors that permit third parties to use their billing processes and add items to their bills when collecting on behalf of such third parties
  • Property managers – Property managers, when collecting on behalf of third parties such as landlords or condominium corporations
  • Affiliates – Affiliated entities when collecting debt on behalf of an affiliate (unless the debt is a debt that was purchased in arrears)
  • Repurchased debt – Creditors who repurchase a debt that was originally owed to them
  • Mortgage brokers – Mortgage brokers making arrangements for the payment of third party debts to be paid out of mortgage proceeds (including negotiating a reduction in debt obligations)
  • Debt purchased under terms permitting collection under original creditor's name – This existing exemption will be clarified so that it will only apply if the debt is actually collected under the original creditor's name
In addition, the Consultation Paper proposes certain limits on the scope of the exemption for lawyers (which is to be extended to paralegals). In short, if the collection activity falls within a service that only a lawyer or paralegal may provide, then registration will not be required.
Following completion of the consultation process, the Consultation Paper indicates that final regulations will be published for review, with a proposed phase-in effective period of 60 days after such regulations are proclaimed in force.
                                                            NOTE: Comments on the Consultation Paper are due September 8, 2017.
The content provided in this blog is intended to provide a general overview of the proposed Debt Collection Legislation and Consultation Paper. Should you require further advice regarding your specific circumstances, please contact us  at Collectrite Collections or email consumerpolicy@ontario.ca directly with any questions or comments.

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