No Exemption – Consumer Protection Bill Passed

Coat_of_Arms_of_Ontario

Door-to-door sales, debt settlement services, real estate transactions, and real estate fees and commissions have been updated, with the Nov. 27 passage of Bill 55 — the “Stronger Protection for Ontario Consumers Act 2013.”

Despite a campaign to have paralegals exempted from Collection Agencies Act restrictions, the regulations remain the same.

Kitchener paralegal Lee-Anne Gadd (OMGadd Legal Services) had urged paralegals to contact committee members about exempting paralegals, while they reviewed the former Bill 55. An exemption would have eliminated the need to register before taking on collections work.

“The committee needs to be aware how this will affect our clients in small claims, too,” Gadd said in September.

Register or Risk Licence

Paralegals are not authorized to make collections on behalf of their clients unless they register under the Collection Agencies Act. Paralegals who send demand letters or make telephone calls to debtors, are at risk of being prosecuted for acting as a collection agency without a licence.

Lawyers are exempted under the Act; they can provide those services without separate registration.

Ken Mitchell, Paralegal Standing Committee (PSC) member, noted that two circumstances in particular require a paralegal to be licensed under the Collection Agencies Act: when it would be advantageous to include additional creditors in a global resolution initiated by only one creditor, and when a debtor wants to proactively settle an anticipated action.

Debt Settlement Services Regulated

Schedule 1 to the new Act amends the Collection Agencies Act. It regulates debt settlement services, including undertaking to act for the debtor with the debtor’s creditors, or receiving money from a debtor, for distribution among creditors.

The legislation amends the Collection Agencies Act R.S.O. 1990, Consumer Protection Act, 2002, and the Real Estate and Business Brokers Act, 2002, and make consequential amendments to other Acts.

Read the Act and learn more, at the Legislative Assembly page.

6 comments

  1. @Michael … ‘2(c) to an assignee, custodian, liquidator, receiver, trustee or other person licensed or acting under the Bankruptcy Act’ … does not apply as paralegals are not listed, however 2(f) could ‘(f) to an isolated collection made by a person whose usual business is not collecting debts for other persons’.
    This is really a non-issue unless you are calling people and harassing them. The only thing you should be doing is sending a letter warning of legal action unless payment or contact to your office is made. You are quite correct in saying that it does not apply to paralegals in an action either started or anticipated. No court would have a problem with you attempting to reduce use of the court’s time with a properly worded letter.

  2. NIcholas McCabe · ·

    I second Michael Benoit.

  3. The act is not targeting retained paralegals acting on behalf of a client to recover monies owed. However, the Act does capture certain activities that are incidental to recovery efforts. Soft collections, e.g. Telephone calls requesting payments. Those types of efforts fall just outside of anticipated legal proceeding and is where a paralegal may run a foul of the Act.

    Bottom Line: No collection firm structures for paralegals but targeted collection activity within the parameters of recovering a debt for a principle is acceptable.

    but….

    One may argue that section 2(c) operates to exempt us but then we need to reconcile that with our scope of practice as permitted by the Law Society…

    (http://www.canlii.org/en/on/laws/stat/rso-1990-c-c14/latest/rso-1990-c-c14.html)

  4. Shouldn’t lawyers? but they aren’t, they are exempt and we are not. That is where the problem arises. And they could have added the necessary language to include those working under debt settlement or collection agency firms. This why Mr. Singh brought the motion – because we are going to get pulled into this vortex. And what of the majority that only do litigation and dont even touch collections? how are they to sound letters or make calls to even get them to a settlement?

    We are already licensed, we do not need to paying (yet) again.

  5. While I respect the opinion of all, I have a question: A new neighbour moves in next door and knocks on my door. He advises me that he works shifts and knows I have two dogs and that if my dogs bark at all, that he’ll sue me in small claims court. At that point, I can clearly call a paralegal regarding an anticipated proceeding.

    A creditor has language in their terms and conditions (which they all do) that says, essentially, if you don’t make your payments on time, they may take legal action against you. You are having trouble making your payments, and you read the terms and conditions. Concerned that you are going to be sued, you may clearly and obviously retain a paralegal regarding an anticipated proceeding.

    does it make sense to suggest that a paralegal who is working, in this regard, completely within the scope of practice, needs some other licence in order to do so?

  6. I cannot believe that there has not been a peep in the forums or anywhere else – the silence has been conspicuous at best. Submissions were made. But in the end, in reading the Hansard record, it is absolutely clear the AG and LSUC did not support it – they said it needed “more research”. Why have we heard nothing from the PSC?

%d bloggers like this: