BILL 54

An Act to Amend the Collection Agencies Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 The title of the Collection Agencies Act, chapter 126 of the Revised Statutes, 2011, is repealed and the following is substituted:

Collection and Debt Settlement Services Act

2 Section 1 of the Act is amended

(a)  by repealing the definition “collection agency” and substituting the following:

“collection agency” means a person, other than a collector, who (agence de recouvrement)

(a)  carries on the business of collecting debts for other persons in consideration of the payment of a commission on the amount collected or otherwise, whether the head office of the collection agency is within or outside the Province, or

(b)  provides debt settlement services, whether the head office of the collection agency is within or outside the Province.

(b)  by repealing the definition “collector” and substituting the following:

“collector” means a person employed, appointed or authorized by a collection agency to solicit business for the agency, to collect debts for the agency or to provide debt settlement services on behalf of the agency. (agent de recouvrement)

(c)  in the definition “prescribed” by striking out “or, if the context requires, by the rules made by the Commission under the Financial and Consumer Services Commission Act”;

(d)  by adding the following definitions in alphabetical order:

“debt settlement services” means 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, if the services are provided in consideration of a fee, commission or other remuneration that is payable by the debtor. (services de règlement de dette)

“debt settlement services agreement” means an agreement under which a collection agency provides debt settlement services to a debtor. (convention de services de règlement de dette)

“regulation” means a regulation made under this Act and, unless the context otherwise indicates, includes a rule. (règlement)

“rule” means a rule made under section 11, or if the context requires, a rule made under the Financial and Consumer Services Commission Act. (règle)

3 Subsection 2(1) of the Act is amended

(a)  by adding after paragraph (a) the following:

(a.1)  assignees, custodians, liquidators, receivers, trustees or other persons licensed or acting under the Business Corporations Act, the Companies Act, the Judicature Act, the Bankruptcy and Insolvency Act (Canada) and the Winding-up and Restructuring Act (Canada), in respect of the provision of debt settlement services,

(b)  in paragraph (b) of the English version by striking out “or” at the end of the paragraph;

(c)  by repealing paragraph (c) and substituting the following:

(c)  a bank listed in Schedule I or II of the Bank Act (Canada), or its officials or employees, in respect of any business of the bank,

(d)  by adding after paragraph (c) the following:

(d)  a loan company or a trust company licensed under the Loan and Trust Companies Act, or its officials or employees, in respect of any business of the company,

(e)  a credit union incorporated under the Credit Unions Act, or its officials or employees, in respect of any business of the credit union,

(f)  any body corporate operated on a not-for-profit basis, in respect of any business of the body corporate, or

(g)  any person or class of persons exempted from the application of this Act by an order of the Director made under subsection 2.1(1).

4 The Act is amended by adding after section 2 the following:

Exemptions

2.1( 1) If the Director considers it appropriate to do so, the Director may, by order and subject to any terms and conditions the Director considers appropriate, exempt any person or class of persons from the application of this Act or any provision of it or from the application of the regulations or any provision of them.

2.1( 2) An order under subsection (1) may be made on the Director’s own motion or on the application of an interested person.

2.1( 3) The order may be retroactive in its operation.

2.1( 4) A person to whom the order applies shall comply with the terms and conditions imposed by the Director under subsection (1).

5 The Act is amended by adding after section 9 the following:

PART 2.1

DEBT SETTLEMENT SERVICES AGREEMENT

Prohibited representations

9.01 A collection agency or collector shall not communicate or cause to be communicated any representation relating to a debt settlement services agreement that is specified as a prohibited representation by regulation.

Debt settlement services agreement

9.02( 1) No collection agency shall provide debt settlement services to a debtor and no collector shall provide those services to a debtor on behalf of a collection agency unless the agency has

(a)  entered into a debt settlement services agreement with the debtor

( i) that is in writing,

( ii) that contains a clear and detailed explanation of the effect that the debt settlement services agreement will have on the debtor’s credit rating, and

( iii) that meets the requirements prescribed, if any, and

(b)  delivered a written copy of the agreement to the debtor.

9.02( 2) No collection agency shall enter into more than one debt settlement services agreement with the same debtor while there is a debt settlement services agreement between the parties that has not expired.

Restrictions on payments for services

9.03( 1) The following definition applies in this section.

“payment” means any compensation, however described, that a debtor is or will be required to pay a collection agency or any other person as a condition of entering into a debt settlement services agreement. (paiement)

9.03( 2) No collection agency or collector that provides debt settlement services shall require or accept any payment or any security for the payment, directly or indirectly, in advance of providing the services, except as prescribed, or in excess of the maximum amount prescribed or determined in accordance with the regulations.

9.03( 3) Every arrangement by which a collection agency or collector takes security in contravention of subsection (2) is void.

Prohibited activities

9.04( 1) No collection agency or collector shall offer, pay or provide any gift, bonus, premium, reward or other compensation or benefit of any kind in order to induce a debtor to enter into a debt settlement services agreement.

9.04( 2) No collection agency or collector shall lend money or provide credit to a debtor.

Refusal to accept settlement

9.05 If a creditor of a debtor refuses to accept a settlement of the debtor’s debt proposed by a collection agency or collector, the collection agency or collector shall inform the debtor within 30 days after the refusal.

Cancellation: cooling-off period

9.06( 1) A debtor who is a party to a debt settlement services agreement may, without any reason and without charge, cancel the agreement at any time from the date of entering into it until 10 days after receiving a written copy of the agreement.

9.06( 2) In addition to the right under subsection (1), a debtor who is a party to a debt settlement services agreement may, without charge, cancel the agreement within one year after the date of entering into it if the debtor does not receive a written copy of the agreement.

9.06( 3) The cancellation of a debt settlement services agreement in accordance with this section operates to cancel the agreement as though it never existed.

Notice of cancellation and obligations on cancellation

9.07( 1) A debt settlement services agreement is cancelled under section 9.06 when the debtor gives a notice of cancellation in accordance with this section.

9.07( 2) A debtor may give a notice of cancellation to a collection agency by

(a)  delivering it personally to the collection agency, or

(b)  sending it to the collection agency by registered mail, prepaid courier, telephone transmission producing a facsimile or any other method that permits the debtor to provide evidence of the cancellation.

9.07( 3) A notice of cancellation that is given in accordance with paragraph (2)(b) shall be deemed to be given when it is sent.

9.07( 4) Subject to subsections (2) and (3), a notice of cancellation is adequate if it indicates the intention of the debtor to cancel the debt settlement services agreement.

9.07( 5) If a debt settlement services agreement is cancelled under section 9.06, within 15 days after the notice of cancellation has been delivered or sent, the collection agency shall refund the money received under the agreement to the debtor.

6 The heading “Regulations” preceding section 11 of the Act is repealed and the following is substituted:

Regulations and rules

7 Section 11 of the Act is amended

(a)  by renumbering the section as subsection 11(1);

(b)  in subsection (1)

( i) by repealing paragraph (a);

( ii) by repealing paragraph (b) and substituting the following:

(b)  prescribing the fee to be charged for a licence;

( iii) by repealing paragraph (c);

( iv) by repealing paragraph (g);

( v) in paragraph (j.2) by striking out the semicolon at the end of the paragraph and substituting a period;

( vi) by repealing paragraph (k);

(c)  by adding after subsection (1) the following:

11( 2) The Lieutenant-Governor in Council may make regulations and the Commission may make rules

(a)  prescribing the requirements of an application for a licence under this Act and the form, terms and conditions of a licence;

(b)  fixing the date of a licence and the period for which it may be issued;

(c)  respecting the suspension and cancellation of a licence;

(d)  specifying prohibited representations for the purposes of section 9.01;

(e)  governing debt settlement services agreements, including

( i) prescribing requirements for the purposes of subparagraph 9.02(1)(a)(iii);

( ii) prescribing requirements for amending, renewing or extending a debt settlement services agreement;

(f)  prescribing for the purposes of subsection 9.03(2) payments or security that may be accepted or required;

(g)  prescribing the maximum amount of a payment or security for the purposes of subsection 9.03(2) or prescribing the method of determining that amount, including any formula, ratio or percentage to be used to calculate the amount;

(h)  prescribing the nature of fees and other charges that collection agencies may recover or attempt to recover for their services from their clients or their clients’ debtors and the amount or maximum amount of the fees and charges;

(i)  respecting forms.

11( 3) The Lieutenant-Governor in Council may, by order, amend or repeal a rule made by the Commission.

11( 4) Subject to the approval of the Minister of Finance, the Commission, concurrently with making a rule, may make a regulation that amends or repeals any provision of a regulation made by the Lieutenant-Governor in Council under this Act or by the Commission under this subsection that in the opinion of the Commission is necessary or advisable to effectively implement the rule.

11( 5) A regulation made under subsection (4) is not effective before the rule referred to in that subsection comes into force.

11( 6) Subject to subsection (5), a regulation made under subsection (4) may be retroactive in its operation.

11( 7) A regulation or rule authorized by this section may incorporate by reference, in whole or in part, any laws, any by-laws or other regulatory instruments or any codes, standards, procedures or guidelines as they are amended from time to time before or after the making of the regulation or the rule or as they read at a fixed time and may require compliance with any law, any by-law or other regulatory instrument or any code, standard, procedure or guideline so incorporated.

11( 8) Regulations or rules may vary for or be made in respect of different persons, matters or things or different classes or categories of persons, matters or things.

11( 9) A regulation or a rule may be general or particular in its application, may be limited as to time or place or both and may exclude any place from the application of the regulation or rule.

11( 10) The Regulations Act does not apply to the rules made under this Act.

11( 11) If there is a conflict or an inconsistency between a regulation made by the Lieutenant-Governor in Council under this Act and a rule made under this Act, the regulation prevails but in all other respects a rule has the same force and effect as a regulation.

8 The Act is amended by adding after section 11 the following:

Notice and publication of rules

12( 1) As soon as the circumstances permit after a rule is made under section 11, the Commission shall

(a)  publish the rule electronically, and

(b)  publish in The Royal Gazette notice of the rule in accordance with the regulations made under the Financial and Consumer Services Commission Act.

12( 2) Without delay after the Commission makes a rule, it shall make a copy of the rule available for public inspection at each of the Commission’s offices during the normal business hours of the Commission.

12( 3) When notice of a rule has been published in The Royal Gazette in accordance with paragraph (1)(b), a person affected by the rule shall be deemed to have notice of it on the date the rule is published in accordance with paragraph (1)(a).

Changes by Secretary of the Commission

13 The Secretary of the Commission may make changes respecting form, style, numbering and typographical, clerical or reference errors in a rule made by the Commission without changing the substance of the rule if the changes are made before the date the rule is published in accordance with paragraph 12(1)(a).

Consolidated rules

14( 1) The Secretary of the Commission may maintain a consolidation of the rules made by the Commission.

14( 2) In maintaining a consolidation of the rules, the Secretary of the Commission may make changes respecting form and style and respecting typographical errors without changing the substance of a rule.

14( 3) The Commission may publish the consolidated rules in the frequency that it considers appropriate.

14( 4) A consolidated rule does not operate as new law but shall be interpreted as a consolidation of the law contained in the original rule and any subsequent amendments.

14( 5) In the event of an inconsistency between a consolidated rule published by the Commission and the original rule or a subsequent amendment, the original rule or amendment prevails to the extent of the inconsistency.

9 Schedule A of the Act is amended

(a)  by adding before

3(1)

the following:

2.1(4)

(b)  by adding after

9(4)

the following:

9.01
9.02(1)(a)
9.02(1)(b)
9.02(2)
9.03(2)
9.04(1)
9.04(2)
9.05
9.07(5)

TRANSITIONAL PROVISIONS, CONSEQUENTIAL AMENDMENTS AND COMMENCEMENT

References

10 If in any Act, other than this Act, or in any regulation, rule, order, by-law, agreement or other instrument or document, reference is made to the Collection Agencies Act, it shall be read, unless the context otherwise requires, as a reference to the Collection and Debt Settlement Services Act.

Debt Settlement Services Agreements

11 Part 2.1 of the Collection and Debt Settlement Services Act does not apply in relation to a debt settlement services agreement in force on the commencement of this section until the agreement is extended, amended or renewed.

Regulation under the Collection and Debt Settlement Services Act

12( 1) The enacting clause of New Brunswick Regulation 84-256 under the Collection and Debt Settlement Services Act is amended by striking out “Collection Agencies Act” and substituting “Collection and Debt Settlement Services Act”.

12( 2) Section 1 of the Regulation is amended by striking out “Collection Agencies Act” and substituting “Collection and Debt Settlement Services Act”.

12( 3) Section 1.1 of the Regulation is amended in the definition “Act” by striking out “Collection Agencies Act” and substituting “Collection and Debt Settlement Services Act”.

Financial and Consumer Services Commission Act

13( 1) Section 1 of the Financial and Consumer Services Commission Act, chapter 30 of the Acts of New Brunswick, 2013, is amended in paragraph (c) of the definition “financial and consumer services legislation” by striking out “Collection Agencies Act” and substituting “Collection and Debt Settlement Services Act”.

13( 2) Paragraph 21(6)(a) of the Act is amended by striking out “Collection Agencies Act” and substituting “Collection and Debt Settlement Services Act”.

Commencement

14 This Act or any provision of it comes into force on a day or days to be fixed by proclamation.