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  • 15 Mar 2018 10:53 PM | Anonymous

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

    March 15, 2018

    The Honorable Tracy MacCharles, MPP Minister of Government and Consumer Services Mowat Block, 900 Bay Street, 6th Floor Toronto, Ontario M7A 1L2

    Re: Bill 199, Access to Consumer Credit Reports and Elevator Availability Act, 2018

    Dear Minister MacCharles:

    On behalf of Receivables Management Association of Canada (RMA), I am writing to share a copy of RMA’s feedback on key measures proposed in Bill 199, Access to Consumer Credit Reports and Elevator Availability Act, 2018.

    While RMA acknowledges that Bill 199 sits at First Reading, before the bill is debated at Second Reading I am keen to meet with policy advisor Alex Crombie to discuss RMA’s concerns. Our members feel strongly that many of the measures proposed in the bill will, if enacted, result in unintended consequences for Ontario consumers, as well as Ontario-based credit reporting agencies. RMA would like an opportunity to explain our concerns.

    A member of RMA’s team soon will be contacting Alex Crombie to determine his availability to meet. Sincerely,

    Stephen Sheather President

    cc: Alex Crombie, Policy Advisor

    View Response to Bill 199

    View Appendix

  • 06 Mar 2018 12:25 AM | Anonymous

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

    Submission to Financial and Consumer Services Commission, New Brunswick
    Feedback to the Proposed Changes to the Financial and Consumer Services Commission Rules, Credit Reporting Licensing and Ongoing Obligations, and Credit Repair Agreements and Prohibited Representations

    March 05, 2018


    The Receivable Management Association of Canada (RMA) is keen to provide Financial and Consumer Services Commission (Commission), New Brunswick with feedback on its proposed changes to the Financial and Consumer Services Commission Rules CRS-001 Credit Reporting Licensing and Ongoing Obligations, CRS-002 Fees, and CRS-003 Credit Repair Agreements and Prohibited Representations (collectively the "Proposed Rules").


    RMA is a national association representing the business and policy interests of Canada’s credit grantors, debt buyers and sellers, law firms, collection agencies and other regional accounts receivable management associations. RMA’s members comprise a sizable segment of Canada’s business community.

    RMA advocates for strong public policy that benefits Canadian consumers and businesses while strengthening Canada's economy. The receivables management sector is a meaningful contributor to New Brunswick’s economy, is a large purchaser of goods and services, employs hundreds of New Brunswickers, and supports philanthropic investment in communities across the province. Credit grantors, debt buyers and sellers, and collection agencies represent an important economic driver in New Brunswick.

    Credit Reporting Services Act

    RMA acknowledges that the proposed changes to credit reporting and debt settlement aims to support the regulatory framework set out in the Credit Reporting Services Act (the Act). Specifically, the Act provides for a licensing regime for credit reporting agencies, and imposes standards of practice, as well as disclosure obligations on licensees and credit repairers. Rules CRS-001 and CRS-003 specify the requirements which were set out in the Act, while Rule CRS-002 establishes the regulatory fees for applicants and licensees.

    Rules and changes are currently out for comment in relation to Credit Reporting and Debt Settlement within the mandate of New Brunswick’s Financial and Consumer Services Commission (FCNB).

    The Proposed Rules

    On balance, RMA supports the proposed rule changes by Financial and Consumer Services Commission, New Brunswick. In the sections below, RMA provides general feedback.

    Credit Reporting

    Following a careful review of the proposed changes to the Financial and Consumer Services Commission Rules CRS-001 Credit Reporting Licensing and Ongoing Obligations, CRS–002 Fees, and CRS003 Credit Repair Agreements and Prohibited Representations (collectively the "Proposed Rules"):

    • The additional requirements for a credit reporting agency to register in the province of New Brunswick are reasonable, and put an onus on the director or proprietor of a credit reporting agency to be of good character and responsible background;
    • The limitation on fee for a security alert is a step towards responsible consumer protection;
    • RMA supports the mandatory contract statements regarding consumer repair agreements.
    Debt Settlement Services

    Following a careful review of the proposed changes to the Financial and Consumer Services Commission Rule CDSS-001 Debt Settlement Services (the Proposed Rule), RMA has the following general feedback:

    • The changes to the Act that fold-in debt settlement services are reasonable, and mirror those in the Province of Ontario. But similar to Ontario, there is no clause or requirement that would prevent for conflicts of interest;
    • For example, consider the routine matter of a local utilities company assigning a collection file of $90 to a collection agency. Until such an account is resolved, a conflict exits when that agency engages that consumer on behalf a second creditor. There exists the possibility that the agency may choose to prioritize that consumer’s other creditor payments (or larger debts) over the account assigned by the local utilities company. This scenario creates the potential for conflict and does serve the consumer’s best interest;
    • RMA’s suggests that the Financial and Consumer Services Commission consult the Law Society of New Brunswick regarding how to handle such conflicts of interest. For example:

      The Law Society of New Brunswick | Model Conflict of Interest Check List:

    • To ensure the protection of consumer interest, it is advisable to require each collection agency engaged in debt settlement to have an internal policy and vetting process to address conflicts of interest when initially engaging consumers.
    Final Thoughts

    RMA encourages the Financial and Consumer Services Commission to implement policies and regulatory rules that will foster job creation and economic growth while protecting consumers.

    As a contributor to New Brunswick’s economy and the well-being of New Brunswickers, the members of RMA believe that the feedback contained in this submission can help the Financial and Consumer Services Commission to further achieve these objectives.

  • 25 Feb 2018 12:21 AM | Anonymous

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

    February 21, 2018

    Gaëtane Lemay
    Clerk, Senate Standing Committee on National Finance
    Committees Directorate
    Senate of Canada
    Room 1047, Chambers Bldg

    Re: Supplementary Estimates (C) 2017-18, For the Fiscal Year Ending March 31, 2018

    Dear Clerk Lemay-

    On behalf of Receivables Management Association of Canada (RMA), I am writing to offer insights that will help inform members of the Senate Standing Committee on National Finance in their study of the Government of Canada’s Supplementary Estimates (C) 2017-18, for the Fiscal year ending March 31, 2018.

    RMA is a national association representing the business and policy interests of Canada’s credit grantors - financial, telecommunications, retail and utility sectors - debt buyers and sellers, and collection agencies. RMA’s members comprise a sizable segment of Canada’s business community, who advocate for strong public policy that benefits Canadian consumers and businesses while strengthening Canada's economy.

    In the sections below, RMA offers suggestions regarding how the Government of Canada should adopt, or at least consider, alternate recovery methods to collect the debt owing to the Crown. Specifically, in the near-term, to help reduce the Department of Employment and Social Development’s year-over-year request for funding to write off debts owed to the Crown for unrecoverable Canada Student Loans.


    The federal government’s Canada Student Loan Program (CSLP) provides financial assistance to postsecondary students in financial need.

    By decree of an Order in Council, on August 1, 2005 the Canada Revenue Agency (CRA) became responsible for the collection of all debts due under programs administered by Human Resources and Social Development Canada, now Employment and Social Development, including the collection of defaulted Canada Student Loans.

    Canada Student Loan Program Debt

    The year-over-year practice of the Government of Canada writing off unrecoverable CSLP debt is troubling. In six years, more than $1.2 billion in unrecoverable CSLP debt has been written off.

    Between 2012-2015, $837 million in CSLP debt was deemed unrecoverable.

    In 2016 and 2017, the Government of Canada wrote off $176 million and $178.4 million, respectively.

    For the fiscal year ending March 31, 2018, the Government of Canada will write off another $203 million in debt owing to the Crown in what is deemed ‘unrecoverable’ Canada Student Loans.

    In 2013, The Windsor Star reported a senior federal government official stating that the Crown decides, in 98 percent of cases, to deem a Canada Student Loan to be unrecoverable following the expiry of a six-year limitation period between when the borrower last acknowledged a loan and any legal activity by the Crown to recoup that debt. The six-year limitation period is completely arbitrary and not adopted by private sector collection agencies (PCAs).

    Recovery levels beyond a six-year period can be exceeded by 5 percent when managed by the receivables management industry. RMA understands that a limitation period of six-years is chosen because a debtor’s credit bureau is purged after this period of time.

    While figures provided by CRA in late 2016 report a slight increase (3 percent) in loan collections between 2015 and 2016, the trend in year-over-year write offs of bad debt from the CSLP suggest the federal government’s efforts are not leveraging the benefits of modern recovery management methodologies.

    In an effort to better understand how to recover a larger percentage of the outstanding CSLP debt to the Crown, RMA recommends that members of the Senate Standing Committee on National Finance raise with senior officials of Employment and Social Development the following questions:

    1. Why does the federal government consider ‘six-year limitation’ as a sufficient period of delinquency?
    2. Is the Government of Canada (or its agents) using modern receivables management methods - delinquency scoring and data computing analytics; the leveraging of consumer data repositories; and, the analysis of structured and unstructured data— to collect upon debts related to the Canada Student Loan Program?
    3. Why isn’t the private sector receivables management industry1 being retained, through competitive procurement processes, to recover these outstanding receivables? Canada’s private sector receivables management industry returns higher rates of debt recovery than public sector collectors.

    In Appendix A, RMA outlines the case for why Canada’s private sector receivables management sector would help the Government of Canada to recover greater percentages of outstanding debt to the Crown, beginning with CSLP debt.

    I am hopeful that members of the Senate Standing Committee on National Finance will give serious consideration to RMA’s recommendations for change.


    Stephen Sheather

    RMA President
      Principal, SCORE Statistical Consulting Ltd.

    Appendix A | The Case for Private Sector Receivables Management

    Canada’s private sector receivables industry has developed a strong reputation for driving down delinquency rates in the management of early- and late-stage debt recovery.

    In Canada, private sector debt recovery programs provide consumers and business with accurate and calculated treatment of debt. Canada’s receivables industry protects business credit and debt portfolios while servicing consumers fairly and responsibly.

    A reliance upon robust analytics, reliable consumer data, computing power, consumer education, and prescriptive legal activities returns higher rates of recovery.

    Canada’s private sector receivables industry also leverages structured credit data, strong legislation and experienced talent to drive results and to provide positive results that support Canada’s economy.

    Given a consumer’s financial status can change rapidly, relying on lagging data and information often considered by the public sector will continue to expose consumers to delinquencies and defaults will continue to increase.

    Globally, governments (e.g., UK, Australia, Latin America, Europe Union and Asia) are adopting a privatepublic sector debt collaboration model, bringing experience and expertise together to produce dramatic improvements in debt recovery. Millions are saved each year by working closely with the private sector risk and receivables management industry.

    The British government has partnered with experienced private sector partners to manage debt recovery. Both consumers and the public sector are benefiting. A consumer’s debt situation is treated in a more positive and informed manner versus the antiquated methods still employed by many public sector bodies.

    1 Receivables management industry: Private Collection Agencies (PCAs), data analytics companies, recovery management scoring providers and credit bureaus.

  • 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.

    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.

    Ontario Registrar Shane Gallagher
    RMA President Steve Sheather
    January 11, 2018
    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
    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.


    Stephen Sheather

    RMA President
      Principal, SCORE Statistical Consulting Ltd.

    c: Alex Crombie, John La Vecchia

  • 07 Dec 2017 12:02 AM | Anonymous
    Brian Summerfelt
    November 29, 2017
    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


    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
    Consumer Protection Alberta
    November 29, 2017
    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 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.


    The Consumer Protection Team

  • 09 Nov 2017 10:18 PM | Anonymous
    Steve Sheather
    President, RMA
    Patrick Dion
    Brian Summerfelt
    November 7, 2017
    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.

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Site optimisé par Wild Apricot - base de données pour la gestion des adhésions, inscription en ligne aux événements,
sites Web intégrés pour les associations les clubs, les organismes de bienfaisance et d'autres types d'organismes sans but lucratif.

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