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  • 22 Jan 2018 9:28 PM | Anonymous

    From: Gallagher, Shane
    To: John La Vecchia; Blair DeMarco-Wettlaufer; Stephen Sheather; Patrick Dion; Dale Leslie
    Sent: Monday, January 15, 2018 4:35 PM
    Subject: RE: RMA-Registrar Call

    Good afternoon,

    Thank you for taking the time to bring your concerns and questions to my attention. A summary of next steps and some clarifications are provided below.

    • Clarification regarding how trust account transfers will operate under the new regulations.

      I aim to provide a draft form for seeking consent for additional and extrajurisdictional trust accounts in late February/ early March. The target date for the final form is May 1, 2018.
    • Notification of the registrar of first party registrations.

      The RMA has highlighted several concerns with the application of and implications of complying with section 19.1.1 of Reg 74 under the Collection and Debt Settlement Services Act. As described in conversation today, firms obtaining or arranging for payment of money owing to a first party are representing themselves as the first party in more conditions than those allowed under section 19.1.1 of Reg 74. Some of these firms are not registered as collection agencies. I will convey this input to my colleagues in policy for their consideration.

      Section 19.1.1 of the Reg is in effect and, as with the rest of the Act, a progressive compliance approach will inform how I address noncompliance with that section. As to the question of whether business process organizations need to register as collection agencies, that would depend on interpretation of whether their activities fell within the application of the Collection and Debt Settlement Services Act. I advise that they seek independent legal advice to determine whether registration is necessary.
    • Clarification regarding what activities mortgage brokers can partake.

      You raised a concern that the exemptions for mortgage brokers allows them to undertake debt settlement services. I will provide a written response to this concern.
    • Timing on mandatory letter disclaimers and wording changes on the lawyer exemption.

      Government has not yet to make a decision on whether and how to proceed with these items.

    Thanks again for the call.

    Sincerely,
    Shane Gallagher
    Registrar, Payday Lending and Debt Recovery
    Licensing, Inspections, and Investigations Branch | Consumer Protection Ontario
    Ministry of Government and Consumer Services
    56 Wellesley Street West, 16th Floor, Toronto, ON, M7A 1C1

  • 22 Jan 2018 9:25 PM | Anonymous
    Teleconference Meeting with Ontario Registrar
    Date: January 11, 2018, Time: 10:00 AM - 11:00 AM EST, Chair: Registrar Shane Gallagher

    Attendees: Ontario Registrar Shane Gallagher; RMA: Steve Sheather, John La Vecchia, Blair Demarco Wetlaufer, Patrick Dion (guest)

    Time (EST) Topic Discussion
    1) 10:00 Agenda Overview
    2) 10:05 Issues
    1. Clarification regarding how trust account transfers will operate under the new regulations
    2. Notification of the registrar of first party (0-60 day) representations (attached memo)
    3. Clarification regarding what activities mortgage brokers can partake
    4. Timing regarding notification for mandatory letter disclaimers and wording changes on the lawyer exemption (e.g., July 31, 2018)
    5. Kudos for new Regulation's introduction of emailed collection notification
    3) 10:50 Other business
    4) 11:00 Adjourn
  • 22 Jan 2018 9:22 PM | Anonymous

    Receivables Management Association of Canada Inc.
    Association Canadienne de la Gestion de Créances Inc.

    To:
    Ontario Registrar Shane Gallagher
    From:
    RMA President Steve Sheather
    Date:
    January 11, 2018
    Re:
    New Requirement for Registration of First Party Collection Activities

    The following memo outlines RMA's concerns regarding a key section of the recently amended Ontario Regulation 74 under the Collection and Debt Settlement Services Act (CDSSA), changes that came into force on January 1, 2018. Specifically, Regulation Section 19.1.1 (3) requiring notification of the Registrar of first party credit collection activities (Appendix A).

    RMA seeks the following clarification regarding the Regulation's new requirements:

    • What is the definition of first party collection activity? Senior staff in the Office of the Minister of Government and Consumer Services (MGCS) advise that first party collection is defined as activities over the period 0-60 days. If true, does this imply that collection activity post 60 days does not require notification nor does post charge-off collection activities?
    • Are the notification requirements similar if a first party service provider collects on behalf of credit grantor?
    • Does collection activity at 0-60 days delinquent by first party providers either 1) calling under the name of a credit grantor or 2) contacting creditors require notification?
    • Does the solicitation of a credit facility constitute first party activity? Does a first party who answers warranty and service questions from a technology company require notifying the Registrar?
    • Will the notification requirements be different for sole first party providers versus third party providers who conduct both services?
    • RMA understands that the new notification requirement would not impact federally chartered business such as banks governed by the Bank Act. True?
    • Imagine the hypothetical case where a first party credit provider does not retain registered collection agents, but instead Customer Relationship Management Business Process Outsourcers (CRM BPO). Would notification of the Registrar be required?
    • Has MGCS considered that the new notification requirement has the potential for employment loss in Ontario? If notification process for first party collections is onerous, first party collection services may move to a friendlier regulatory environment. Simply put: a call is a call whether placed from Ontario or another province.
    • Also, given the recent coming into force of Ontario's minimum wage increase, the notification requirement for first party collection is yet another cost pressure for the receivables management sector.

    Appendix A

    Ontario Regulation 74 under the Collection and Debt Settlement Services
    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,

    1. 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;
    2. the collection agency or collector is not compensated contingent on or based on the amount, if any, collected from the debtor;
    3. 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
    4. 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.

    Note: On January 1, 2018, subsection 19.1.1 (2) of the Regulation is amended by striking out "or collector" wherever it appears. (See: O. Reg. 460/17, s. 9)

    (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,

    1. that the collection agency has entered into a contract as described in that subsection; and
    2. of the name and address of the creditor. O. Reg. 466/01, s. 1.
  • 22 Jan 2018 9:10 PM | Anonymous

    Receivables Management Association of Canada Inc.
    Association Canadienne de la Gestion de Créances Inc.

    December 19, 2017

    Shane Gallagher
    Registrar
    Consumer Services Operations Branch
    Ministry of Government and Consumer Services
    Place Nouveau Suite 1500, 5775 Yonge Street
    Toronto, ON M7A 2E5

    Dear Registrar Gallagher,

    On the recommendation of Alex Crombie, policy advisor to the Minister of Government and Consumer Services, I am writing to seek an opportunity to meet with you to discuss the issues identified in the attached letter.

    In early December, RMA wrote to Alex in response to MGCS's announcement of the coming into force of amendments to Ontario Regulation 74 under the Collection and Debt Settlement Services Act (CDSSA) and amendments to the CDSSA passed in Bill 59, Putting Consumers First Act.

    RMA sought clarification regarding the issues noted in our letter. While Alex read with interest the questions outlined in RMA's letter, he believed the person best suited to respond RMA's issues was you. I could not disagree.

    I will be travelling until early February 2018. RMA is prepared to await my return to Canada. But if after reading our letter, you believe you would like to meet earlier then a meeting with RMA's chair of the government affairs committee will be arranged at a convenient date and time to you.

    I look forward to receiving your response.

    Sincerely,

    Stephen Sheather

    RMA President
      Principal, SCORE Statistical Consulting Ltd.

    c: Alex Crombie, John La Vecchia

  • 07 Dec 2017 12:02 AM | Anonymous
    From:
    Brian Summerfelt
    Date:
    November 29, 2017
    Re:
    Canada: Major Amendments To The Québec Consumer Protection Act

    Major amendments to the Québec Consumer Protection Act ("CPA") were adopted on November 15, 2017 by the Québec Legislature.1] We outline here certain of the changes that affect credit contracts. The amendments will come into force on the date or dates to be set by the Québec government and, in many cases, they provide for standards or requirements to be determined by regulations. Draft regulations are expected to be published in 2018.

    Credits secured by real estate

    At present, a credit (loan or line of credit) secured by a first-ranking hypothec on immovable property is exempt from the CPA provisions governing credit contracts. Subject to certain conditions being met, credits secured by non-first-ranking hypothecs are also exempt from most of these provisions. The recent amendments imply that these exemptions will be repealed or replaced by more limited exemptions.

    Minimum Payment on a Credit Card

    For newly issued credit cards, the minimum monthly payment will be 5% of the outstanding balance.2 For cards already issued when this requirement comes into effect, the minimum payment (if less than 5%) will be gradually increased to 5% over a six-year transitional period.3

    High-Cost Credit Contracts

    The government may determine by regulation the criteria under which a credit contract is considered to be at "high-cost".4 Several consequences entail from that characterization, including that if the consumer's debt ratio exceeds the ratio determined by regulation, the obligations of the consumer under the contract will be presumed to be excessive, harsh, or unconscionable. In that case, consumers may ask the court to annul the contract or reduce their obligations, including the interest rate.5

    Assessment of Consumer's Capacity to Repay a Credit

    Before entering into a credit contract with a consumer, or before increasing a credit limit for a line of credit or a credit card, a lender or merchant must assess the consumer's capacity to repay the requested credit.[6] Failure to carry out this assessment releases the consumer from the obligation to pay interest or other credit charges.7 A regulation will determine the steps which, if taken, will result in the lender or merchant being deemed to have carried out the required assessment. Are also deemed to comply with this assessment obligations financial institutions, such as banks, insurance companies, and caisses Desjardins, who are required by their governing law to adhere to sound and prudent management practices in consumer credit matters.

    Variable Interest Rate

    Subject to certain conditions, the amendments permit that any credit contract provide for a "variable credit rate".8 A contract providing for a variable rate must include a description of the "reference index" used to determine the rate.9 The amendments do not define "reference index" but the expression should be interpreted to include, for example, a bank's prime rate. The current CPA is more restrictive on the possibility of using a variable rate in a credit contract.

    Increase of Credit Limit in an Open Credit

    At present, under the CPA, a credit limit on a credit card or a line of credit cannot be increased without an express request from the consumer. The amendments establish that if a credit provider unilaterally increases the credit limit, it will not be entitled to payment of any amounts charged to the account that exceed the previous credit limit.10

    Exceeding a Credit Limit for an Open Credit

    The current CPA is silent as to the legal consequence of consumers exceeding their credit limit for a credit card or a line of credit, without that limit having been formally increased. Under the amendments, a credit provider may permit an occasional excess, but only if the following conditions are met: (a) the credit provider must immediately notify the consumer that the credit limit has been exceeded, and (b) the credit provider may not impose any charges on the consumer for exceeding the credit limit.11

    * * *

    Unfortunately, the amendments do not contain clarifications on important issues like the concept of "consumer" or the scope of application of the CPA. For example, based on court decisions, it is unclear whether a professional who borrows money to purchase office equipment is considered a "consumer" under the CPA and, accordingly, whether the CPA applies to that loan. It would also have been useful to clearly circumscribe the scope of application of the CPA, for example by stating that the CPA applies to consumer contracts which are subject to Québec law under the rules of the Civil Code of Québec that determine the jurisdiction whose law governs a contract.12

    Footnotes

    1. The amendments are found in Bill 134, as adopted on November 15, 2017.
    2. New section 126.1 of the CPA.
    3. Section 79 of Bill 134.
    4. New section 103.4 of the CPA.
    5. New section 103.5 of the CPA (to be read with existing section 8).
    6. New section 103.2 of the CPA.
    7. New section 103.3 of the CPA.
    8. New section 100.1 of the CPA.
    9. New sections 115, 119.1, 125, 134, 150 of the CPA. New section 100.2 of the CPA envisions the possibility of a variable rate not being based on an index but that possibility is not consistent with the other provisions of the amendments.
    10. New section 128.2 of the CPA.
    11. New section 128.1 of the CPA.
  • 05 Dec 2017 12:02 AM | Anonymous
    From:
    Consumer Protection Alberta
    Date:
    November 29, 2017
    Re:
    Bill 31: A Better Deal for Consumers and Businesses Act

    Dear Stakeholder:

    We would like to express our appreciation for your ongoing participation in the summer and fall consultation to help inform the government’s priorities in modernizing Alberta’s consumer protection legislation. The contributions you made were very helpful and provided in-depth knowledge and feedback on the issues presented.

    In summary, Service Alberta ran a public online survey between July 27th and September 15th, 2017 that generated 2,954 responses. In parallel, between September 6th and September 19th, Service Alberta held six Consumer Protection Legislation Modernization Open Houses throughout Alberta that hosted 148 visitors. Also, between September and November, Service Alberta engaged in 40 targeted industry stakeholder meetings.

    The culmination of this effort came to fruition earlier today, when Bill X: A Better Deal for Consumers and Businesses Act was tabled to respond to the feedback we received from consumers and businesses on improving Alberta’s consumer protection laws. The Bill strengthens consumer protections and helps Alberta businesses compete successfully on equal footing. Please visit alberta.ca to find information on the Bill and the news release.

    Our conversation will continue in the coming months, as some of the amendments contained in the Bill require well-crafted regulations to be fully effective.

    We value your perspective and participation. Thank you once again, and best wishes in all your endeavors.

    Regards,

    The Consumer Protection Team

  • 09 Nov 2017 10:18 PM | Anonymous
    To:
    Steve Sheather
    President, RMA
    From:
    Patrick Dion
    Copy:
    Brian Summerfelt
    Date:
    November 7, 2017
    Re:
    De­‐Brief | Service Alberta’s Consultations on Modernizing the Existing Consumer Protection Legislative and Regulatory Framework, Regulation

    A. Background

    On July 27, 2017 the Ministry of Service Alberta invited stakeholders to participate in an online survey to help inform the modernization of Alberta’s existing consumer protection laws. RMA submitted a brief in response to the consultations.

    On August 29, Service Alberta senior officials met by teleconference with MetCredit president Brian Summerfelt and RMA executive director George Preece to discuss RMA’s response to the online consultation, as well as to outline consumer protection issues and possible solutions for Alberta.

    As part of the next phase of consultation, Service Alberta connected again by teleconference to share the consultation results and to discuss next steps. I have summarized below the highlights of our discussion.

    B. Stakeholder Consultation De-Brief

    B1. General Feedback

    Service Alberta senior officials provided the following general highlights from the stakeholder consultations:

    • Consultations revealed that Albertans have a general unawareness for consumer protections available to them;
    • Albertans have had trouble finding information pertaining to consumer rights and protections. Consequently, Service Alberta plans to rename the current act governing consumer protection, Fair Trading Act, to Consumer Protection Act, adding a preamble outlining, in plain language, the intent and purpose of consumer protection legislation and regulations. This won’t involve substantive change to the content of the legislation, but instead make it easier for consumers to find key aspects of rights and protection information.
    • Service Alberta will establish, in policy, a consumer bill of rights, a Throne Speech commitment made earlier in 2017 by the current government, to identify, in one document using plain language, key protections and rights consumers have under the legislation. The bill of rights would contain no new protections, but instead bundle Alberta’s consumer protection legislation and regulations into one consolidated document. The expected result: heightened consumer awareness.

    B2. High Cost Credit

    Service Alberta consulted stakeholders on the issue of high cost credit to determine that additional regulations are required under the Fair Trading Act. Regulation-making powers will be established in the following areas:

    1. Define what constitutes high cost credit. Establish a specific limit in regulations under Fair Trading Act and declare that credit offered above that level would constitute a high cost credit agreement and subject to additional diligence;
    2. Service Alberta not looking at licensing, but establishing additional disclosure and advertising requirements (i.e., standard disclosure box for high cost credit agreements);
    3. Set standard contract formats and terms of high cost credit agreements (i.e., standard cooling off period);
    4. Establish additional lending standards for high cost credit lenders. Requiring lenders to engage in a particular form of due diligence when examining the terms or repayment structure of a high cost credit agreement.

    Once draft regulations are introduced, Service Alberta will further consult with relevant stakeholders.

    B3. Maintaining Balance Between Consumers and Business

    In an effort to maintaining balance between consumers and business, Service Alberta plans the following amendments to the general provisions of the Fair Trading Act:

    1. Changing the way Service Alberta handles unilateral amendments to contacts. Currently, suppliers cannot unilaterally change substantive terms of a contract. Proposed changes will offer greater flexibility, allowing businesses a little more discretion and providing consumers with more rights. For example, if a business proposes to change the substantive terms of a contract, consumers will be offered, by written notice, a chance to stay in the contract until expiration or cancel a contract without penalty;
    2. Prohibiting business from including clauses in contracts that would prevent consumers from posting negative reviews of a business or transaction. Prevents a business from intimidation consumers, who may have had a negative experience with a business, from posting a review. Business would not be prohibited from pursuing legitimate defamation legal action, however;
    3. Prohibiting suppliers from using mandatory arbitration clauses in consumer contracts (i.e., prohibiting a business from preventing consumer class actions). These prohibitions are aimed more at telecom contracts and Pay Day lenders;
    4. Expanding the right to sue when a consumer has suffered a loss (e.g., suffered a loss as a result of a failure to adhere to cost of credit disclosure standards, an error in credit reporting or an unfair practice). Offers protection to move forward with an action under the Fair Trading Act because of a legislative or regulatory breach -without forcing a consumer from having to go to small claims court;
    5. Protecting consumers who, in good faith, file a complaint against a business by issuing a negative review by creating an automatic defense (i.e., the prevention of slap lawsuits). Would not be a defense for any consumer engaging in malicious or defamatory behavior; and,
    6. Permit Service Alberta to expand the right to publish information online relating to regulatory structure or enforcement action (e.g., charges or convictions or licence actions taken against a business).

    Service Alberta will introduce a bill in December 2017 to implement the legislative changes noted above, then complete a second round of consultations with stakeholders, before developing regulations in 2018.

    B4. Collections Sections of Fair Trading Act

    Service Alberta very little feedback from the consultations on unfair collection practices and, therefore, are proposing no legislative or regulatory changes to collection practices in Alberta.

    While Service Alberta did leave open the possibility of future amendments, senior officials shared that the consultations revealed that Alberta’s collections industry was "remarkably low on the scale" of consumer complaints.

    Officials went further to say that Alberta has experienced a "drop in complaints over the years" and that they have seen evidence of an overall "professionalization of the collections industry" in Alberta.

  • 13 Sep 2017 2:22 AM | Anonymous

    Receivables Management Association of Canada Inc.
    Association Canadienne de la Gestion de Créances Inc.

    Submission to the Ministry of Government and Consumer Services
    Consultation on Regulations to Support Putting Consumers First Act, 2016

    September 8, 2017
    Toronto, Ontario

    A.
    Background

    Receivables Management Association of Canada (RMA) is a national association, established in 2012, representing the business and policy interests of Canada’s credit grantors —financial institutions, telecommunications, retail and utility sectors— debt buyers and debt sellers and collection agencies.

    While RMA has a national mandate, the business operations of its members are largely concentrated in the provinces of Quebec, Ontario, Alberta and British Columbia. RMA’s members are governed by provincial and federal statutes.

    RMA advocates for strong public policies that strengthen Canada's economy and benefits Canadian consumers and businesses.

    Members of Ontario’s receivables management sector comprise a sizable segment of Canada’s business community and represent an important economic driver in Ontario; is a large purchaser of goods and services; support thousands of employees; and, fund philanthropic investment in communities in Ontario and across the country.

    RMA has used the past 12 months to strengthen bilateral relations with key federal and provincial decision-­‐makers, aspiring to become actively engaged with federal and provincial parliaments in the discussion of policy, legislative and regulatory matters that govern the receivable management sector.

    B.
    Ministry of Government and Consumer Services | Consultations on Regulations to Enact Putting Consumer First Act, 2016

    RMA applauds the Ministry of Government and Consumer Services’ efforts to modernizing consumer protection in Ontario by its recent passage of Putting Consumer First Act, 2016.

    RMA and its members are accustomed to operating in highly regulated environments and understand the need for robust, but balanced consumer protection statutes and regulations.

    The aim to protect consumers and to support a transparent and better-­‐informed marketplace, where consumers and businesses can count on being treated fairly, supports not only the development of sound public policy, but reflects the ethos of RMA and its members.

    RMA acknowledges a collaborative relationship with Ontario’s current registrar and his responsive to our industry’s inquiries.

    In all discussion with senior officials of the Ministry Government and Consumer Services, ministers, MPP and senior policy advisors, RMA has been clear that its members support fairness and transparency, but also promote consumer protection and responsible business practices.

    C.
    Consultations

    As part of the Government of Ontario’s consultations on the development of regulations to support the enforcement of measures passed in the Consumer Protection Act, 2017, the paper Consultation on Collection and Debt Settlement Services Act Regulation Reform sought the views of industry stakeholders, consumers and others.

    In the sections below, RMA offers its views regarding the ministry’s proposed regulatory provisions to adopt under the Collection and Debt Settlement Services Act (the Act).

    Proposals
    1.
    Paralegals and Lawyers

    The proposed General Regulation amendments provide for more equal treatment of licensees under the Law Society Act (LSA) by including an exemption from the Act for paralegals when they are providing services for which they are licensed under the LSA.

    Proposed regulation text:

    See section 18.1 of the Draft Revised General Regulation in Appendix One.

    Question #1: Do you agree with the proposed approach to the exemption of lawyers and paralegals?
    ☐ Yes
    ☐ No
    ☑ Other - Please Explain Below

    Limiting the exemption for lawyers and law firms performing collection and debt settlement services under the Collection and Debt Settlement Services Act will benefit Ontario consumers and provide a consistent treatment of services within the sector. Licensing under the Act is not onerous, and will provide protections under the prohibited practices of the Act.

    Given the proposed wording of sections 18.1 (1a), (1b), 2(a), and (2b) of the draft regulation, RMA recommends further clarity between the division of legal and collection processes performed by a lawyer. If a lawyer or paralegal have written direction to undertake legal action on a suit-­‐worthy account within the legal statute of limitations, they should have an opportunity to call prior to judgment to potentially avoid a costly litigation against a consumer.

    If, however, a lawyer is involved in an account or a bulk assignment of collection accounts where no written direction for legal action exists, or an account is beyond the statute of limitations or is not suit-­‐ worthy, then this activity is a collection matter and should require registration and adherence to the Act’s regulations.

    2.
    Clarifying the Act’s Application

    In order to be clearer about situations the Act is not intended to cover, the regulations propose to add a number of exceptions to the General Regulation.

    Proposed regulation text:

    Sections 19.3 to 19.9 of the Draft Revised General Regulation in Appendix One.

    Question #2: Do you agree with the proposed additional exemptions?

    ☑ Yes
    ☐ No
    ☐ Other - Please Explain Below

    RMA favours the exemptions proposed in draft regulation.

    3.
    Revised First Notice Rules

    The General Regulation currently requires that agencies send a written notice with information about an alleged debt before calling or otherwise directly contacting a debtor.

    The draft regulation proposes no collection agency or collector shall demand payment from the debtor until first sending a private written notice to verify, inter alia, debtor’s address and, perhaps, to seek permission to communicate electronically; that no other contact beyond the first private written notice be permitted until the sixth day after sending the notice; the notice include more detailed information about the creditor, collection agency and debt; and, require the notice include a mandatory information statement set out by Minister’s Regulation.

    Proposed regulation text:

    Sections 21 to 21.2 and clause 22(3)(c) of the Draft Revised General Regulation in Appendix One and the draft mandatory information statement in Appendix Three.

    Question #3: Do you agree with the proposed approach to first notice?

    ☐ Yes
    ☐ No
    ☑ Other - Please Explain Below
    1. RMA supports properly notifying debtors before beginning to communicate regarding debt collection. Best practice should apply to collection agency and collector alike. The aim to protect consumers and to support a transparent and better-­‐informed marketplace —where consumers can count on being treated fairly— reflects the practice of RMA and its members.

      Requiring collection agencies and collectors to first provide private written notice, then to wait six days before demanding payment from a debtor, is a reasonable requirement in principle, but is not without challenge in practice.

      Given the preference and predominance of 21st century communication methods, largely via email and text message, few debtors receive or, more importantly, respond to ordinary mail. Also, many debtors are not always forthcoming with an accurate mailing address, even when contacted, and a valid last known address is not always provided, under the Act, to a credit agency or collector. RMA recommends sections 21.1 (5) and 21.1(1) of the draft regulations allow for credit reporting or collection attempts if an address is withheld or refused.
    2. Allowing an exemption for ordinary mail notification when all parties agree to electronic communication is a positive change to regulation and properly avoids privacy issues associated with joint or shared email accounts.
    3. Section 21. (1) of the regulation sets out the information that a creditor must communicate to the debtor in the first private written notice. Among the information the debtor is required to communicate: ‘the amount of the debt on the date it was first due and payable, and if different, the amount currently owing, including a breakdown of that current amount.’

      Agreement on how to define ‘the date a debt is first due and payable’ is not unanimous. In the Province of British Columbia, a lack of clarity on the ‘the date a debt is first due and payable’ created much consternation for Canada’s receivables management industry. To avoid repeating errors made in other jurisdictions, RMA recommends that Ontario’s regulations define the date a ‘debt is first due and payable’ as the date when a financial institution first demands a creditor’s balance be paid in full. Clarifying the definition of when a ‘debt is first due and payable’ will support compliance.
    4. RMA challenges the value and has strong concerns regarding the operational cost of requiring all collection agencies and collectors to describe in the first private written notice to a debtor, ‘a description of any other debts currently owed by the debtor to the creditor that have been assigned to the collection agency, including the amount of each debt and the type of financial product, if known’ —section 21. (1) subsection (6).

      If all individual debtors are to receive a first private written notice for each outstanding debt then notification will be generated for each debt owed by the debtor to the collection agency.

      Complying with section 21. (1) subsection (6) will be difficult from a technological standpoint. While compliance by mono-­‐line credit card providers would be manageable, financial institutions that transact with a given collection agency for multiple classes of debt may not be handled by same area of the financial institution to know that additional debts are owing. Similarly, a collection agency might transact with a given financial institution, but in different departments (i.e., auto loans, credit card, home equity lines of credit).

      Also, in matters concerning the notification of co-­‐debtors, when cases when both co-­‐debtors are not party to all of the debt obligations held by one agency, privacy breaches would result.
    5. Section 21, subsection (5) —that no collection agency shall report a debt to a consumer reporting agency until the time period referenced in section 21 subsection (2) or (4)— creates potential for confusion and problematic timing when communication with a debtor.

      Specifically, when a debtor does not respond to the first private written notice within the period defined in subsection (2), a credit agency or collector can report the debtor to a consumer reporting agency. If at a date beyond the period defined in subsection 21 (1), a credit agency or collector makes contact with the debtor to learn they did not receive the private written notice required in subsection 21 (1), the letter described in subsection (4) must be sent.

      Is the intention of the regulation to require a credit agency or collector to cease reporting for 6 days while the letter required in subsection (4) expires? If so, it is impractical for credit agencies or collectors to suspend reporting for 6 days only then to return.

      RMA recommends that the regulations allow a credit agency or collector to continue to report a debtor to a collection reporting agency—even when the notice described in subsection 21 (4) is required— provided that the private written notice required in subsection 21. (1) was sent by ordinary mail.
    4.
    Prohibited Practices

    The Act and General Regulation set out various practices collection agencies are prohibited from carrying out such as calling people outside certain hours, contacting them too frequently or harassing them.

    The draft regulations propose two changes to the General Regulation: adding a new prohibition against agencies reporting a debt to a consumer reporting agency until after they have sent the required first notice to a consumer; add an exemption to this prohibition that forbids agencies from communicating using means that impose costs on the people they are contacting, but declaring there is no contravention if the cost is reimbursed within 15 days of the consumer presenting evidence such as copy of a bill from their communications provider.

    Proposed regulation text:

    Subsection 21(5) and section 19.9 of the Draft Revised General Regulation in Appendix One.

    Question #4: Do you agree with the added prohibited practices?

    ☐ Yes
    ☐ No
    ☑ Other

    RMA supports the draft regulation’s requirement that a credit agency or collector reimburse a debtor within 15 days of the debtor presenting evidence that a cost has been incurred in the process of being contacted by a credit agency or collector, unless the debtor has given prior consent to be contacted via the cost-­‐incurring method.

    To clarity, presenting documented consent by the debtor should waive any recourse to requesting reimbursement. It is acknowledged, however, that the Act also permits a debtor to withdraw consent to be contacted by any means than ordinary mail.

    5.
    Financial Requirements - Bonding and Trust Accounting

    The draft regulation removes the requirement for collection agencies to post bonds. Requiring all agencies to incur the ongoing cost of maintaining bonds for such a low frequency of claims is unreasonable.

    The proposed regulation would improve protection against actual financial losses by clarifying that monies required to be deposited into a trust account are to be directly deposited without going through other accounts and the obligation on agencies to have the full name of trust accounts used by financial institutions would also be clarified as it may not always be feasible for an institution to use the full name.

    Proposed regulation text:

    Section 17 of the Draft Revised General Regulation in Appendix One.

    Question #5: Do you agree with the proposed revisions concerning bonding and trust accounting?

    ☐ Yes
    ☐ No
    ☑ Other - Please Explain Below

    RMA believes the removal of the bond requirement is a reasonable step given the supporting evidence provided.

    But also, that section 17 (4) of the proposed regulations outlines a number of reasonable precautions governing trust accounts. However, section 17 (4.2) could contravene regulations required in other provinces.

    Under the provincial regulations of Manitoba, Quebec, and Yukon Territory, segregate trust accounts are required for collection funds. Often a collection agency or debt settlement company will have to redirect funds to the appropriate trust account in the above-­‐named provinces, and it is RMA’s understanding that the Ministry of Government and Consumer Services’ template for ‘Schedule A’ trust reconciliations allows for transfer to designated trust accounts where funds have been collected within Ontario.

    To comply with other collection regulations in provinces such as Quebec, Manitoba or Yukon Territory, provinces where funds must be transferred to trust accounts if received in an Ontario designated trust, RMA recommends that section 17 (4.2) be clarified to state that no collection agency shall transfer trust funds to any non-­‐designated trust account outside of Ontario. Such a clarification should create harmony between provincial legislations and comply with the MGCS’ distributed Schedule A trust reconciliation form.

    6.
    Amendments Reflecting Regulation of Debt Purchasers and Ending Collector Registration

    When proclaimed into force, the amended Act would require debt purchasers to register if they intend to collect debts themselves.

    Proposed regulation text:

    Sections noted above in the Draft Revised General Regulation in Appendix One.

    Question #6: Do you agree with the proposed approach to implementing regulation of debt purchase and ending collector registration?

    ☐ Yes
    ☑ No
    ☐ Other - Please Explain Below

    Debt purchasers requiring regulation is perfectly reasonable. However, there is a suggestion in the proposed regulation that a creditor cannot collect debts for anyone else – this would prevent agencies from engaging in both debt purchasing and contingency work, but not both. The proposed regulation would affect only a handful of collection agencies, but would have a dramatic impact on those few.

    RMA is not supportive of the proposed change to the regulation of debt purchasers. The proposed changes, once enacted, will not work in practice. RMA recommend that this section be removed from the draft regulation.

    7.
    Call Recording

    The draft regulations propose that collection agencies record all phone calls made or received by an agency or by a collector to help with the better resolution of consumer complaints.

    Proposed regulation text:

    Section 32 of the Draft Revised General Regulation in Appendix One.

    Question #7: Do you agree with the proposed approach to call recording?

    ☑ Yes call recording should be mandatory for all collection calls by agencies.
    ☐ No, call recording should not be required

    RMA favours —for the purpose of improved customer service and/or complaint resolution— the recording of all phone calls made or received by an agency or by a collector who works for an agency, but recommends the following clarification/amendment:

    • The draft regulation proposes that collection agencies shall retain for two years the recordings made under section 32, subsection (1). The consultation document and the proposed administrative penalties section state the recordings be retained for three years. RMA recommends that recordings be kept for only 2 years; and,
    • Subsections (5) and (6) declare that a consumer or Registrar be provided a copy of a requested recording within 10 days and 5 days, respectively. RMA favours consistency and recommends that a copy of a recording be provided to either consumer or Registrar within 10 days from the date of receiving the written request.

    Also, while providing a copy of a recording is a reasonable request for an established collection agency, RMA recommends that any new collection agency be afforded a grace period of 2 years from their date of incorporation to allow the time and expense of technological fit-­up.

    8.
    Administrative Penalties

    The draft regulations propose a schedule of administrative penalties to address contraventions of the Collection and Debt Settlement Services Act and regulations.

    Proposed regulation text:

    Draft Administrative Penalties Regulation in Appendix Two.

    Question #8: Do you agree with the proposed approach to administrative penalties?

    ☐ Yes
    ☐ No
    ☑ Other - Please Explain Below
    1. RMA members place high-­‐value on ensuring that receivable management industry employees engaged in collection activities are in full compliance with all federal and provincial statutes and regulations. To ensure compliance, millions of dollars have been invested, and will continue to be invested, in systems development, employee training, quality control and auditing.

      RMA favours providing the Registrar of Collections Agencies the authority to discipline bad actors of the receivables management industry. Outlined Appendix Two: Proposed Administrative Penalties Regulation, the ministry’s proposed graduated schedule of administrative penalties an assessor may impose for contraventions of provisions set out in Column 1 of Table 1, are, on balance, clear, fair and practical.
    2. For clarity, Item 17 of Table 1, Column 1 notes the prohibition against the contravention of subsection 17 (4.2) of Ontario Regulation 74. In the above-­‐noted section, Financial Requirements -­‐ Bonding and Trust Accounting, RMA recommends that section 17 (4.2) of the Ontario Regulation be clarified to state that no collection agency shall transfer trust funds to a non-­‐designated trust account outside of Ontario. RMA repeats its concerns herein.
    3. When the ministry first introduced Bill 59, Putting Consumers First, RMA raised concern regarding the proposed bill’s absolute liability provisions and, relatedly, how the resulting regulations would treat inadvertent contraventions of the Act.

      While RMA supports the strict enforcement of deliberate or repeated contraventions of consumer protection regulations of the Act, how the ministry proposes to regulate, if at all, an inadvertent contravention of the Act requires clarification.

      If a debtor gives permission to a collection agency or collector to be contacted by mobile phone, but then, for example, relocates to a city located in a time zone in western Canada (e.g. PT), plus chooses not to obtain a mobile telephone number from an area code corresponding to the region, a collection agency or collector could, unintentionally, contact the debtor by telephone at a time of day that would be in breach of the regulation. How would regulation treat such a contravention?

      A collection agency or collector should not be penalized for such inadvertent contraventions of the regulations. The ministry needs to provide clarification on such matters.
    9.
    Phase-In Period to Implement Rules

    If the proposed regulation provisions are finalized and approved, they would be published before the amendments to the Act made under Bill 59 are proclaimed into force. The intent would be to give the industry and public time to learn about the new rules and to know what to do to comply before coming into effect.

    The ministry proposes that proclamation of the Act’s amendments and coming into force of related regulations take place approximately 60 days after publication.

    Question #9: Do you agree with the proposed time frame for agencies to come into compliance with the new rules?

    ☐ Yes
    ☑ No
    ☐ Other - Please Explain Below

    The ministry’s proposed phase-­‐in period of 60 days is problematic. While giving offering 60 days to learn of the new rules and to understand how to comply may seem adequate, collection agencies, collectors or financial institutions required to implement operational or system technology changes to become compliant with new regulatory provisions —in particular the revisions to first notice rules— will require more than 60 days.

    A phase-­‐in period of 180 days is more realistic. The experience following the strengthening of consumer protection in the Province of British Columbia is proof that a lengthier phase-­‐in period is less disruptive to both consumers and industry.

    Final Comments

    RMA supports the Government of Ontario enacting consumer protection measures that will foster job creation and economic growth while better protecting consumers.

    RMA is keen to partner with the Ministry of Government and Consumer Services to develop an effective consumer protection regulatory framework, drafted using accurate consumer data and analysis, and to address legitimate areas of concern in Ontario’s receivables management sector.

    As a contributor to Ontario’s economy and to the well-­‐being of Ontarians, RMA, but in particular its Ontario-­‐based members, strongly believe the feedback contained in this submission can assist the ministry to further achieve these objectives.

  • 13 Sep 2017 1:02 AM | Anonymous

    Receivables Management Association of Canada Inc.
    Association Canadienne de la Gestion de Créances Inc.

    Submission to Service Alberta
    Consultations on the Modernization of Existing Consumer Protection Legislative and Regulatory Framework

    August 29, 2017
    Edmonton, Alberta

    A.
    Background

    Receivables Management Association of Canada (RMA) is a national association, established in 2012, representing the business and policy interests of Canada’s credit grantors -financial, telecommunications, retail and utility sectors- debt buyers and debt sellers, law firms, collection agencies.

    While RMA has a national mandate, the business operations of its members are largely concentrated in the provinces of Quebec, Ontario, Alberta and British Columbia. RMA’s members are governed by both provincial and federal statutes.

    RMA advocates for strong public policy that strengthens Canada's economy and benefits Canadian consumers and businesses.

    RMA’s members -credit grantors, debt buyers and sellers, and collection agencies— comprise a sizable segment of Canada’s business community and represent an important economic driver in Canada.

    The receivables management sector is a large purchaser of goods and services, employs thousands of Canadians, and supports philanthropic investment in communities in Alberta and across the country.

    RMA has used the past 12 months to strengthen bilateral relations with key federal and provincial decision-­‐makers, aspiring to become active in policy, legislative and regulatory discussions that govern the receivable management sector.

    RMA seeks to be proactively engaged when legislative or policy discussions are being considered by federal and provincial parliaments.

    B.
    Service Alberta | Consultations on Modernizing the Existing Consumer Protection Legislative and Regulatory Framework

    RMA applauds Service Alberta for its plans to modernize consumer protection legislation and regulation in Alberta.

    RMA and its members are accustomed to operating in highly regulated environments. RMA understands the need for robust, but balanced consumer protection statutes and regulations.

    The aim to protect consumers and to support a transparent and better-­‐informed marketplace, where consumers can count on being treated fairly, supports not only the development of sound public policy, but reflects the ethos of RMA and its members.

    RMA acknowledges that the Fair Trading Act and the Collection of Debt and Repayment Business Practices Regulation sets out rules for collection agencies in Alberta. But also that, at present, only third-­‐party collection agencies are regulated.

    RMA acknowledges a collaborative relationship with Alberta’s current Statute Administrator Darren Thomas. Administrator Thomas appeared at RMA’s 2016 annual national conference and is responsive to our industry’s inquiries.

    RMA has been clear with Service Alberta that its members support transparency and promote responsible business practices.

    C.
    Consultations

    As part of the Government of Alberta’s consultations with consumer and industry stakeholders, an Alberta-­‐based RMA member completed Service Alberta’s online survey, reviewed the consultation issues and policy proposal fact sheets, and has offered, in the sections below, feedback to the general questions, summarized in Appendix A, posed by Service Alberta to help guide the consultations.

    1/2.
    Which of the marketplace issues being consulted on are of primary and of least importance to your organization?

    Given RMA is a national association representing the business and policy interests of Canada’s credit grantors, debt buyers and sellers and collection agencies, RMA considers fact sheet, ‘Your Money and Agreements’, but, in particular, the subsection on Debt Collection to be of primary importance to our board and members.

    Of least importance, the fact sheet guiding consultations pertaining to Emerging Trends/Talent Agencies. RMA members have no business practice in the sectors named in the fact sheet.

    3.
    For the Issues of Primary Importance to RMA
    a.
    Which of the possible proposed solutions do you like most or least, and why?
    • Service Alberta has proposed expanding key elements of the existing banned practices (e.g., restricting the time of day calls can be made) for collection agencies to both collection agencies and creditors.

      RMA is fully supportive of such an expansion of regulation. Best practice should apply to collection agency and creditor alike. Poor business practice is bad for business and harmful to consumers. The aim to protect consumers and to support a transparent and better-­‐ informed marketplace —where consumers can count on being treated fairly— reflects the ethos of RMA and its members.
    • With respect to requiring creditors to provide written notice to a consumer when their debt is re-­‐assigned or sold, this practice is standard operating procedure when debt is sold to a third-­‐party.
    • The challenge with the proposed regulatory change is that if the requirement is notification via written notice to a debtor’s last known address, the likelihood of a successful notification is slim at best.

      Given the preference and predominance of 21st century communication methods, largely via email and text message, few consumers receive or, more importantly, respond to letter mail.

      Creditors’ current billing practice prefers/encourages consumers to receive by either e-­‐letter or e-­‐mail notification that a statement is available online. The Province of British Columbia has enacted such practice in its consumer protection statutes.

      RMA recommends that Service Alberta’s proposed regulations be broadened to include consumer notification by either e-mail or text message of debt assignment, re-assignment or purchase.
    b.
    Are there any unintended consequences to you or your stakeholders with respect to any of the possible solutions?
    • Consumer protection regulations expanded to include all creditors could result in costly consequences for small businesses. Would all businesses, small or large, be required to obtain licensing for debt collection or would regulations stipulate that creditors below a certain number of employees be excluded?
    • If Service Alberta were to adopt RMA’s recommendation regarding the allowance of electronic communication with debtors, privacy considerations would need to be addressed by proactively seeking permission from consumers at time of purchase.
    c.
    What considerations should be given with respect to future implementation of any of the possible solutions?

    While drafting new statutes and regulation to protect consumers, RMA urges Service Alberta to allow equal consideration to businesses. Fair, balanced and robust consumer protection regulations serves the public interest.

    d.
    What is the impact of any of the possible solutions with respect to creating a fair and balanced marketplace, and ensuring a level playing field for your stakeholders?

    Given that businesses pass along added costs to consumer, either directly or indirectly, a proper balance of consumer protection and business fairness is in the public interest.

    e.
    What other possible solutions could be considered and why?
    • Transparency on debt collection complaints and violations: Currently, Service Alberta investigates potential violations of consumer protection laws, reviews complaints for transactions between businesses and consumers, and takes enforcement action where legislative breaches have occurred. RMA suggest that this approach be completely transparent and the results made available on Service Alberta’s website.

      For years, such an approach has been adopted by the Government of Quebec’s Office of the Protection of the Consumer, http://www.opc.gouv.qc.ca/consommateur/
    • Service Alberta should use the process to modernize the existing consumer protection legislative and regulatory framework to clarify the Government of Alberta’s policy on the use of Automatic Dialing-­‐Announcing Devices (ADAD) in the collections process. There are striking differences between the Province’s regulations and CRTC rules, http://crtc.gc.ca/eng/phone/telemarketing/politi.htm.
    4.
    Are there other marketplace issues the Government of Alberta should be examining?

    Service Alberta should broaden debt collection regulations to include lawyers and law firms. The Government of Ontario is reviewing such a change in regulation.

    Also, in fact sheet Your Rights and Responsibilities, measures were proposed to protect consumers from unfair contracts and allow for ways to seek retribution if they were treated unfairly. One measure, (Looking ahead, 4), proposes to protect consumers who file honest complaints from any retaliation from businesses; another, (Looking ahead, 5), proposes to protect consumers from being sued from businesses when they publish a negative review, unless that review is intentionally defamatory of false

    While RMA is supportive of protecting consumers against retribution from negative reviews, provided the review is ‘fair comment’ under Canadian law, consumers need to be sensitized to the permanence of most reviews and that reviews can have a significant impact on a business.

    Defamation and libel are already illegal in Canada, but if a review can be proven false —for example saying one has been told by the RCMP that a legitimate business is criminal— the business owner should be able to force removal of the online review and pursue the offending party for damages.

    Final Comments

    RMA encourages Service Alberta to implement consumer protection measures that will foster job creation and economic growth while protecting consumers.

    RMA is keen to partner with the Government of Alberta to develop effective consumer protection legislative and regulatory framework, drafted using accurate consumer data and analysis, to address legitimate areas of concern in Alberta’s receivables management sector.

    As a contributor to Alberta’s economy and the well-­‐being of Albertans, RMA, but in particular its Alberta-­‐based members, strongly believe the feedback contained in this submission can assist the government further achieve these objectives.

    Appendix A
    Questions to Guide Service Alberta’s Consultations on Modernizing the Existing Consumer Protection Legislative and Regulatory Framework

    Service Alberta is interested in feedback specifically with respect to:

    1. Which of the marketplace issues being consulted on are of primary importance to your organization?
    2. Which of the marketplace issues being consulted on are of least importance to your organization?
    3. For the issues of primary importance to your organization:
      1. Which of the possible solutions do you like most or least, and why?
      2. Are there any unintended consequences to you or your stakeholders with respect to any of the possible solutions?
      3. What considerations should be given with respect to future implementation of any of the possible solutions?
      4. What is the impact of any of the possible solutions with respect to creating a fair and balanced marketplace, and ensuring a level playing field for your stakeholders?
      5. What other possible solutions could be considered and why?
    4. Are there other marketplace issues the Government of Alberta should be examining?

  • 12 Sep 2017 9:52 PM | Anonymous

    Receivables Management Association of Canada Inc.
    Association Canadienne de la Gestion de Créances Inc.

    September 11, 2017

    Darren Thomas
    Statute Administrator
    Consumer Programs
    Service Alberta
    3rd Floor, Commerce Place
    10155 – 102 Street
    Edmonton, Alberta T2J 4L4

    Dear Darren:

    On behalf of the board of directors of the Receivables Management Association of Canada (RMA) and our association’s Alberta-based members, I am writing to thank you, Trevor Bergen and members of the Service Alberta team for proactively engaging RMA regarding the Government of Alberta’s plans to modernize consumer protection legislation and regulation in Alberta.

    The meeting in Edmonton in late August, with participation by one of RMA’s founding directors MetCredit President and CEO Brian Summerfelt, was a useful opportunity to share the receivables management sector’s feedback on Service Alberta’s consultation topics and possible solutions. A copy of RMA’s written response to the consultation is attached.

    I am confident that Service Alberta will connect again with RMA as soon as Service Alberta shares with Minister McLean its recommendations regarding how to modernize Alberta’s consumer protection legislation and regulation. RMA looks forward to partnering with Service Alberta to help build a consumer protection regime that protects Albertans while fostering job creation, economic growth and an even playing field for Alberta’s receivable management sector.

    Sincerely,

    Stephen Sheather

    RMA President

    Principal, SCORE Statistical Consulting Ltd.

    c: Trevor Bergen, Director, Consumer Programs and Fair Trading, Service Alberta Brian Summerfelt, President and CEO, MetCredit

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