Dept Repayment Settlement Services Agents - Cross Canada - CTL Law

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REPAYMENT/SETTLEMENT SERVICES AND AGENCIES
LEGISLATION AND REGULATION*
ALBERTA BRITISH COLUMBIA ONTARIO PRINCE EDWARD ISLAND
GOVERNING
LEGISLATION
Fair Trading Act, RSA 2000, c. F-2 &
Collection and Debt Repayment Practices
Regulation, Alta Reg 194/1999
Business Practices and Consumer
Protection Act, SBC 2004, c. 2 and Debt
Collection Industry Regulation, BC Reg
295/2004
Collection and Debt Settlement
Services Act, RSO 1990, c C.14 &
General Regulation, RRO 1990, Reg
74
Collection Agencies Act RSPEI, 1988,
c C-11 & General Regulation,
Debt Repayment
Agency / Debt
Settlement Services -
Definition
Debt Repayment Agency (“DRA”) is defined
as: A collection agency that carries on the
activities of offering or undertaking to act
for a debtor in Alberta in arrangements or
negotiations with the debtor’s creditors or
receiving money from a debtor for
distribution to the debtor’s creditors in
consideration of a fee, commission or other
remuneration that is payable by the debtor
(s.1(g) Reg)
A Debt Pooling System is defined as: an
arrangement or procedure under which a
debtor pays to a debt pooler money to be
distributed or paid, according to the
system, by that debt pooler to 3 or more
creditors of the debtor (s.125 Act)
Debt Settlement Services is defined
as: Offering or undertaking to act for
a debtor in arrangements or
negotiations with the debtor’s
creditors or receiving money from a
debtor for distribution to the
debtor’s creditors, where the
services are provided in
consideration of a fee, commission
or other remuneration that is
payable by the debtor (s.1(1) Act)
An agency who provides these
services is also defined as a
Collection Agency (“CA”)(s.1(1) Act)
Debt Repayment Agency (“DRA”) is
defined as: a person that carries on
the activities of offering or
undertaking to act for a debtor in PEI
in arrangements or negotiations with
the debtor’s creditors or receiving
money from a debtor for distribution
to the debtor’s creditors
inconsideration of a fee, commission
or other remuneration that is
payable by the debtor (s.17.1(1)(a)
Act)
Agency need to be
licenced?
YES - Must be licensed (s.3(1)(b) & s.3(3)
Reg)
No person shall hold a collection agency
licence AND a debt repayment licence at
the same time (s.3(7)Reg)
YES – Must be licensed (s.1.1 Reg.)
YES - Must be registered (s.2(0.1)
and 4 (Act)
No specific provisions stating that
DRA must be licenced, but likely a
DRA would be considered a CA
under the Act and a CA must be
licensed (s.3(2)Act)
Debt Agent – Defined
A Debt Repayment Agent is defined as: A
collector employed or authorized by a debt
repayment agency to act for or deal with
debtors. (s.1 Reg)
Debt Pooler is defined as: a person,
whether in British Columbia or not, who in
the course of business arranges or
operates a debt pooling system (s.125
(Act)
Anyone who provides these services
is also defined as a Collector (“C”)
s.1(1) Act
Debt Repayment Agent: An
individual employed or authorized
by a DRA to act for or deal with
debtors (s.17.1(1)(b)Act)
Agent need to be
licensed?
Must be licenced (s.3(1)(d) & 3(5) Reg)
No individual may hold a collector’s license
AND a debt repayment agent licence at the
same time (s.3(8) Reg)
YES – Must be licensed (s.1.1 Reg)
YES - Must be registered (s.2(0.1)
and 4 Act)
No specific provisions stating that
and Agent must be licenced, but
likely an Agent would be considered
a Collector under the Act and a
Collector must be licensed
(s.3(1)Act)

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Lawyers Exempt?
Lawyers exempt only from from “Collection
Practices” Part 11 of Act if acting in the
practice of their profession (s.110 (2) Act)
(Does not specifically state that lawyers are
exempt from the Regulation dealing with
DRAs)
Lawyers exempt from Act and Reg if in
regular practice of their profession (s.3
Reg)
Act does not apply to a barrister or
solicitor in the regular practice of his
or her profession or to his or her
employees (s.2(1)(b) Act)
NO - These sections of the Act and
Regs apply to solicitors and
barristers who are engaging in the
business of debt repayment agents
& agencies (s.17.1(9) Act)
Contact and
Identification
Cannot collect a debt without providing the
agent’s name and name of debt repayment
agency (s.12.1(1)(a)Reg)
Cannot communicate information
about debt to any person except the
debtor, a guarantor, the debtor’s
representative or a creditor of the
debtor without debtor’s written
consent (s.29(9) Reg)
Must provide information on how to
contact the CA Or C during business
hours (s.29(10) Reg)
Must respond to debtor’s’
communications within a reasonable
time (s.29(11) Reg)
Any WEBSITE that requests debtor’s
personal information must clearly
display CA name, business address,
phone number, fax number, email
and registration number
Any ADVERTISEMENT must set out
CA’s registered name and number
(s.26(3) Reg)
Communication with
Others
Cannot communicate information about
the debt with anyone other than the
debtor, a guarantor of the debt, the
debtor’s representative OR the creditor of
the debt (s.12.1(1)(m) Reg)
Cannot obtain a debtor’s contact
information from a 3rd party UNLESS
debtor explicitly consented to the
contact information being shared
with the CA or C (s.29(12) Reg)
Cannot communicate information
about the debt or existence of debt
with any person except the debtor,
guarantor, representative or creditor
of the debtor (s.17.1(2)(l) Act)

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Amount Collected
Cannot collect any amount greater than
prescribed by regulation for acting for the
debtor in making arrangements or
negotiations on behalf of the debtor
(s.12.1(1)(b)
OR
Cannot make any arrangement with debtor
to accept LESS than the amount of the
balance and owing to creditor UNLESS
express consent of creditor is provided
(s.12.1(1)(c)
Cannot collect an amount greater
than that set out in Act and
Regulations (s.2 (a)Act)
Cannot make an arrangement with
debtor to collect amount that is LESS
than balance due to creditor without
prior express creditor approval
(s.2(b)Act)
Written Agreement
Requirements
Cannot collect fee, commission or
disbursement from debtor unless, before
providing service, it has entered into a
signed written Agreement or written
authorization and debtor has a copy
(s.12.1(2) Reg)
The written Agreement must be:
a) dated and signed by DRA and debtor, b)
include name, address and phone number
of DRA and debtor, c) describe all services
provided under agreement, d) state all fees
that are to be paid by debtor, e) list all
creditors as disclosed by debtor and f) total
amount owed, payment amount, schedule
of payments and total number of payments
for each listed creditor (s.12.1(3) Reg)
Cannot make a claim for breach of contract
against a debtor who cancels a debt
repayment agreement (s.12.1 (k)(Reg)
Must inform a debtor within 30 days after
the creditor has notified the DRA that it has
decided to withdraw from a debt
repayment program (s.12.1(l) Reg)
A contract between a debt pooler and a
debtor MUST be in writing and signed by
the debtor (s.127 Act)
No CA shall provide debt settlement
services to a debtor UNLESS the CA
has entered into a written debt
settlement services agreement, had
provided a copy to the debtor, and
disclosed to the debtor in the
agreement all information necessary
to explain the sources of the CA’s
funding (s.16.5 (1) Act)
No CA can enter into more than one
agreement with the same debtor
while there is an agreement
between the parties that has not
expired and any other agreement
shall be deemed to be part of the
debt settlement services agreement
(s.16.5 (2) Act)
In a debt settlement services
agreement, the CA must indicate
which of the following methods of
negotiating the settlement of the
debtor’s debt the CA will pursue: i) a
proposed schedule of payments in
respect of each debt ii) the CA will
put forward to each creditor on or
before a specified date an offer to
settle with a one-time payment that
is less than the amount of debt (s.27
(1)(Reg)
If CA proposes scheduled payments
the agreement SHALL include the
A written agreement MUST be dated
and signed by the DRA and debtor;
must include name and phone
number of debtor and name,
address, phone number and fax and
email address of DRA; describe all
services to be provided; state all
fees, separately itemized that are to
be paid by debtor; list all creditors as
disclosed by debtor to whom
payments will be made under
Agreement; state the total amount
owed, the payment mount, the
schedule of payments to be made
and the total number of payments
for each listed creditor. (s.17.1(4)
Act)
Must provide a written report,
containing a) gross amount received
by DRA from or on behalf of debtor
b) amount and date of payments and
to whom they were made; c) any fee
commission or disbursement
retained by the DRA
(s.17.1(2)&(7)Act)
This written report must be provided
without charge once every 60 days
that the DRA is acing for the debtor
(s.17.1(8) Act)
Cannot make claim for breach of
contract against a debtor who

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proposed schedule of payments for
each debt, the maximum payment
that the CA may accept for services
provided under the agreement is
15% of every payment made by the
debtor AND the first page of the
agreement shall be the document
entitle “Repaying Debt and Credit
Counselling – What You Need to
Know” (found on the Government of
Ontario’s Website).(s.27(2) Act)
If CA proposes to settle debt with an
offer of a one-time payment the
agreements SHALL state for each
debt the date on which an offer to
settle will be made and the amount;
the maximum amount a CA may
accept for services is 10% of the
amount of each debt at the time the
agreement is signed, that is settled
through the CA AND the first page of
the agreement shall be the
document “Settling Debt – What You
Need To Know” (found on the
Government of Ontario’s Website)
(s.27(3) Act)
The Agreement shall disclose
whether or not the CA received or
will receive funding from creditor in
exchange for entering into the
Agreement (s.27(1)(5) Reg)
The Agreement must also include:
the name and address of the debtor,
the CA’s registered name, business
address, phone and fax number,
email address, website address and
registration number; the names of
any collectors who negotiated or
concluded the Agreement and their
registration numbers; the date
entered into; proposed termination
date; itemized list of all services
provided; details of all debts
cancels an Agreement (s.17.1 (2)(j)
Act)
Must inform a debtor within 30 days
after a creditor has notified that it
has decided not to participate in or
has withdrawn from a debt
repayment program (s.17.1(2)(k)
Act)

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including each creditor’s name,
amount owing and interest rates;
total amount owed to ALL creditors;
any restrictions, limitation and
conditions; a statement that debtor
is entitled to receive a written report
on performance of Agreement
within 15 days of requesting same;
date and signature of debtor, CA and
C (s.27(1)(6) Reg)
Agreement may be amended by
express agreement of debtor and CA
(s.27(2)Reg)
If amended, the debtor may without
reason cancel agreement at any time
form the date that the amendment
is agreed until 10 days after
receiving the written copy of the
amended agreement (s.27(3) Reg)
Amendments must meet
requirements of Act and Regulations
and does not retroactively affect
rights and obligations of debtor
(s.27(4) & (5)Reg)
Cancellation of
Agreement
Unless the agreement provides for
an earlier termination date, the
agreement terminates 18 MONTHS
after the later of i) the date entered
into, ii) the last day on which a
payment was made iii) if any debts
are settled, the last day on which the
settlement occurred (s.27(1)(4) Reg)
A debtor who is a party to a debt
settlement agreement may without
any reason, cancel the agreement at
any time from the date of entering
into it until 10 days after receiving a
written copy (s.16.7(1) Act)

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Additionally, a debtor may cancel
the agreement within ONE YEAR
after the date of entering if the
debtor has not received a copy that
meets the requirements set out in
the Act (s.16.7(2) Act)
A debtor who cancels the agreement
must do so in accordance with ss.92
& 94 of the Consumer Protection Act
and section 16.9 of the Act
Restrictions on Fees /
Payments
Cannot charge a debtor a fee that EXCEEDS
the SUM OF
a) a one-time administration fee that is
NOT higher than the average monthly
payment as set out in the Agreement; AND
b) 15% of the scheduled payment amount
OR
(where there are no scheduled payments)
10% of the debt owing and this fee can only
be charged to the debtor after an
acceptable settlement has been
negotiated(s.12.1(4) & (5))
Cannot charge a fee for a dishonoured
cheque unless the fee was included in the
written agreement (s.12.1(1)(f) Reg)
Cannot charge or receive a fee in the form
of a promissory note or other negotiable
instrument other than a cheque or draft
(s.12.1(1)(g) Reg)
Cannot lend money or provide credit to a
debtor (s.12.1(h) Reg)
Cannot offer, pay or give any bonus,
premium or award to a debtor for entering
into an agreement (s.12.1(i)(Reg)
Cannot collect any fee for referring,
advising, assisting etc. a debtor in getting
any extension of credit from a lender,
creditor or service provider (s.12.1(j) Reg)
A debt pooler MUST NOT charge fees or
disbursements in excess of the prescribed
amount (s.127(3) Act)
A CA shall not accept payment for
services UNTIL the debtor has
entered into an agreement with the
creditor regarding the amount to be
paid to creditor to settle debt; the
debtor has made at least one
payment; the CA has written
evidence of such payment (s.28(1)
Reg)
The amount a CA may accept as
payment for services from debtor
SHALL NOT EXCEED: [TOTAL
AMOUNTS CA MAY ACCEPT FOR ALL
DEBTS OWED AS SET OUT IN
AGREEMENT] X [AMOUNT OF DEBT
OWED TO CREDITOR] / [TOTAL
AMOUNT OF DEBT OWED TO ALL
DEBTOR’S CREDITORS] (s.28(3) Reg)
If CA proposes to negotiate a
settlement by scheduled payments
the CA may also charge a one-time
fee of no more than $50 (s.28(4)
Reg)
A CA may charge a debtor a fee for a
dishonoured cheque BUT cannot be
greater than the actual amount
charged to the CA by FI that
dishonoured the cheque (s.28(5)Reg)
Cannot charge a fee for a
dishonoured cheque unless the fee
was included in Agreement with
debtor (s.17.1(2)(e) Act)
Cannot charge or receive any fee in
the form of a promissory note or
other negotiable instrument other
than a cheque or draft (s.17.1(2)(f)
Act)
Cannot collect any fee for referring,
advising, procuring, arranging for or
assisting a debtor in obtaining any
extension of credit from a lender,
creditor or service provider
(s.17.1(2)(i) Act)
Cannot collect or retain a fee,
commission or disbursement for
services unless before providing
service DRA has EITHER entered into
a written agreement signed by the
DRA and the debtor OR obtained
written authorization signed by the
debtor to provide service AND
delivered a copy of the agreement or
authorization (s.17.1(3) Act)
Cannot charge a fee that EXCEEDS
(in the case of scheduled payments)
the sum of $50 as a one time set-up
fee AND 15% of the scheduled

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payment amount received from or
on behalf of debtor by the DRA
OR (in the case of a one time
payment – or an agreement to
negotiate) 10% of the debt owing
and this fee can only be charged
after a settlement acceptable to the
debtor has been successfully
negotiated (s.17.1(5) & (6) Act)
Legal Proceedings
Cannot give any person any false or
misleading information including
references to the police, a law firm, prison,
credit history, court proceedings or a lien or
garnishment (s.12.1(e)Reg)
Cannot give any person any false or
misleading information including
references to police, a law firm,
prison, credit history, court
proceeding or a lien or garnishment
(s.17.1(2)(d) Act)
Prohibited Practices
If under a debt pooling system a debtor
pays money to a debt pooler for
distribution to creditor, that debt pooler
MUST NOT act for or represent any of the
creditors AND is deemed to act for and
represent the debtor (s.127 Act)
CA cannot make the following
representations regarding a debt
settlement agreement: the services
are non-profit or charitable basis if
they are not; the CA’s program is run
by the Government if they are not;
any references to registration under
the Act (other than CA’s
registration); any claim of savings or
other results that are not typical
results (meaning the average results
over a period of six months and no
longer than 12 months in preceding
calendar year); any
misrepresentations such as using the
services may deter efforts of
creditor; or that using the services
will or may prevent legal action or
garnishment (s.26(1) & 2 Reg)
CANNOT restrict debtor from having
Cannot lend or provide credit to a
debtor (s.17.1(2)(g) Act)
Cannot offer, pay or give any gift,
bonus or other compensation to a
debtor for entering into an
Agreement (s.17.1(2)(h) Act)

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access to consumer report;
stop debtor from communicating
with creditors; provided settlement
services under a name other than
registered name;
fail to give written report to debtor
on performance within 15 days of
request;
offer or pay compensation to a
debtor in exchange for entering into
Agreement;
accept any money for assisting a
debtor to obtain an extension of
credit other than an extension of
time for debtor to repay debt;
fail to inform the creditors that the
CA or C is authorized to negotiate a
schedule of payments or one-time
payment on debtor’s behalf within
15 days of authorization;
Fail to inform debtor of a refusal by
creditor to negotiate within 15 days
of refusal; (s.29 (1-8) Reg)
Cannot misrepresent time needed to
achieve results promised (s.29(13)
Reg)
Cannot enter into an agreement if
apparent creditors would not enter
into agreement to settle debt
(s.29(14) Reg)
Cannot enter into Agreement with a
debtor if it is apparent that debtor is
not able to protect his or her
interests because of disability,
illiteracy or inability to understand
the agreement (s.29(15)Reg)
Cannot give any person false or
misleading information (s.29(16)
Reg)

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