NLIS 2
June 4, 2001
(Government Services and Lands)

Action taken to improve consumer protection with respect to collection agencies

Walter Noel, Minister of Government Services and Lands, said today that his department is reviewing its legislation and regulations with respect to collection agencies and that he is pleased with the substantive progress made on this matter during a recent meeting of federal, provincial and territorial ministers responsible for consumer affairs.

Minister Noel said: "While consumers have a responsibility for their financial obligations, it is important that governments fully address such issues as excessive pressure, disclosure and privacy. Governments throughout the country must address inconsistent consumer protection measures and agree on a common list of prohibited collection practices.

"Ministers have now agreed on 10 prohibitive practices that will be put in place throughout the country as soon as appropriate legislation can be prepared and passed. We need such harmonized legislation to ensure that consumers are fully protected."

The 10 prohibited practices agreed upon are:      

• No collection agency is permitted to correspond with an individual in such a manner as to constitute harassment, including the use of threatening language.

• A collection agency is not authorized to charge the cost of communicating with a debtor (for example, telephone charges) to the individual being contacted.

• A collection agency is not allowed to threaten legal action for which it has no lawful authority.

• A collection agency cannot give any false or misleading information or misrepresent the purpose of its communication with an individual.

• A collection agency must first contact a person in writing in its attempt to collect a debt and provide full disclosure of the details related to the debt. Verbal contact is not permitted until five days after the written communication has been sent.

• Any costs incurred by the collection agency in the course of collecting a debt are not considered to be part of the amount owing by the person.

• Debtor's rights, as provided under collection agency legislation or regulations, cannot be waived.

• A collection agency cannot pursue persons who are not liable for the debt in question.

• A collection agency is limited in its means of communication to writing, to legal counsel or to legal action when the debtor so requests and provides sufficient information in writing.

• Collection agencies cannot, without lawful authority, use legal documentation (summons, notice, demand) that implies a connection with any court of law.

Currently in Newfoundland and Labrador, in addition to these prohibitive practices, collection agencies are not permitted to contact persons at their place of work and employers are not allowed to be contacted without consent from the individual involved.

Contact: Rick Callahan, Communications (709) 729-4860.

2001 06 04                                      11:15 a.m.