The Ministry of Government Services is working to develop a revised regulation under the Ontario Collection Agencies Act. This revised regulation would implement a nationally approved template of harmonized prohibited collection practices.

The national agreement establishes a baseline from which jurisdictions such as Ontario may adopt further measures. The Ministry seeks public comment on two issues related to adopting the national agreement: addressing harassment through overly frequent calls and charges for NSF cheques.

Background

The federal-provincial-territorial Ministers responsible for Consumer Affairs ratified a template of harmonized prohibited collection practices in 2001. This agreement was modified to its final form in 2003. A copy of the final agreement may be viewed on-line on the Industry Canada website.

The Ontario Collection Agencies Act was amended in 2002 to adopt some provisions from the national agreement; these amendments have not yet been proclaimed into force. Most of the national agreement´s provisions are to be adopted through amendments to the regulation under the Collection Agencies Act.

The Ministry is working towards having the revised regulation in place no later than December 2005, and to see the related statutory amendments proclaimed at the same time. These measures will become law only if promulgated by the Lieutenant Governor in Council. Until such time, the current law and regulation continue to remain in effect.

Extensive consultation preceded the national agreement´s approval by the federal-provincial-territorial ministers. The Ministry is not seeking further comment on the agreement itself. However, in preparing a revised regulation to implement the agreement, there are two items on which comments are sought.

Issue 1. Frequency of Contact

First, the Ministry is considering how to adopt Item 1 of the harmonized template with respect to harassment due to frequency of contact. Complaints concerning collection agencies rank highly among all those the Ministry receives. Of these complaints, many in turn concern the frequency of calls. 

Item 1 of the harmonized template prohibits calls "of such frequency as to constitute harassment". The Ministry is proposing that in implementing this provision, the regulation set out a specific standard that would be more easily followed and enforced than if relying solely on a general test.

The Ministry proposes that no collection agency or collector should exceed three unsolicited contacts to a debtor in any seven-day period. 

The following types of contacts would be included within this restriction:

• Contacts by telephone, facsimile, e-mail, text message and personal contact, or any other form of contact not specifically excluded;
• A call by an automatic dialing device if that call connects to a live person or answering machine whether or not a collector comes on the line;
• Messages left for the debtor or with a person referenced in Section 1 of the Harmonized Practices would be a contact for this purpose: member of debtor's family or household, any relative, neighbour, friend or acquaintance or the debtor's employer.

The following types of contacts would not be included within this restriction:

• Contacts to third parties to locate a debtor;
• Mistaken contact of a third party (e.g., through an accident, the collector could realize they had left the message with the wrong number and not have this contact count against allowed number);
• Incomplete contacts (e.g., the phone rang and no one answered - note causing a phone to ring excessively is however itself potentially a form of harassment and not permitted);
• Contact by conventional letter-post (on the basis that conventional post is not a disruptive form of contact and is also more self-limiting due to cost);
• Contacts that the debtor consented to or solicited in advance (e.g., "I'm busy now, call back in half an hour." - the call in half an hour does not count).

With respect to contacts a debtor consented to receive, a debtor could not be deemed to have consented to contacts exceeding this threshold through any standard waiver or contractual provision. The debtor's consent would have to be specific to the contact for it to take the contact "out of the count".

The Ministry believes a standard of this nature would be more easily followed and enforced than relying only on the more general test of "such frequency as to constitute harassment". If adopted, such a specific rule would be added to the general test.

Issue 2. NSF Cheque Fees 

Fees for dishonoured payments were discussed during development of the national agreement. Item 9 of the harmonized template prohibits a collection agency collecting more than the amount of the debt owed and does not specifically reference such charges. The Ministry proposes that in implementing this item, the regulation should clarify that reasonable charges for NSF cheque costs incurred by a collection agency may be charged to debtors so long as certain standards are met. 

The Ministry proposes that any such costs which a creditor could charge in accordance with nationally harmonized Cost of Credit Disclosure rules should also be chargeable by a collection agency acting on the creditor´s behalf. The standard for creditors requires: (i) that such charges have been initially disclosed to the debtor by the creditor in entering the original agreement between them; (ii) the costs be reasonable and (iii) the costs actually have been incurred.

If the proposal were adopted, any costs such as NSF charges, would have to flow from the contract between the creditor and the debtor. A collection agency could not add NSF charges to a collection in the absence of a provision in the contract that permitted the cost to be added to the amount owing.

Thus, whether a collection agency is involved or not, a debtor´s liability for such charges would not change.

Request for Comments

We would appreciate your views on both these proposals by July 4, 2005.

Please submit any comments to:

Or by fax:

Or by e-mail to:

Please note that this is a public consultation.

All comments received will be considered public and may be used by the ministry to help evaluate and revise the proposed draft legislation and regulations. This may involve disclosing some or all comments or materials, or summaries of them, to other interested parties during and after the consultation.

Any personal information in submissions, such as names and contact details (i.e. home addresses and phone numbers, personal email addresses, etc.) - in addition to any other information that could be used to identify an individual will not be disclosed without prior consent.

However, records created by individuals acting in a professional capacity (e.g., on behalf of a group, association, business, commercial enterprise, etc.) may be disclosed, unless your covering letter states that such disclosure would be harmful and/or prejudicial. You should note, that there is a specific test established in the Freedom of Information and Protection of Privacy Act which applies to information submitted on behalf of an organization which will determine whether such information can be released to a requestor under that Act.

If you have any questions about this consultation or how any element of your submission may be used or disclosed, please contact:

The Freedom of Information and Privacy Coordinator
Ministry of Government Services
(416) 326-8470