Paralegals Urge Debt Collection Exclusion


As Ontario moves closer to updating consumer rights, paralegals could seize this opportunity to seek an exemption, allowing collections work to be part of day-to-day practice.

Bill 55, the “Stronger Protection for Ontario Consumers Act 2013,” passed Second Reading earlier this month. It has been referred to the Standing Committee of the Legislative Assembly.

Kitchener paralegal Lee-Anne Gadd (OMGadd Legal Services) says paralegals should speak to the Committee about exempting paralegals under the legislation. That way, we would not need separate registration to be able to do collections work.

“This is an excellent way to let our voices be heard in the government and express how we should be exempt under the Collection Agencies Act,” Gadd says. “This is a fantastic opportunity for us. The committee needs to be aware how this will affect our clients in small claims, too.”

Gadd spearheaded a letter-writing campaign, encouraging paralegals to let Tracy MacCharles, Minister of Consumer Services and MPP for Pickering-Scarborough East, know about their concerns.

“I stress that each paralegal has a voice, no matter what, and that advocacy does not stop in the courtroom,” Gadd said. “Simple action works wonders, even if at times you have to stand alone. We are in the position to make change for the better and we must never stay silent in the hopes someone else will make that difference.”

Current Limits on Paralegal Debt-Collection

Paralegals are not authorized to make collections on behalf of their clients without being registered 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.

Ken Mitchell, Paralegal Standing Committee 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.

Schedule 1 to the Bill under consideration amends the Collection Agencies Act, to regulate which debt settlement services a collection agency, or a collector acting on behalf of an agency, can provide to a debtor. It also restricts how much they can charge for those services. Such services include undertaking to act for the debtor in arrangements or negotiations with the debtor’s creditors, or receiving money from a debtor for distribution to the debtor’s creditors.

Gadd’s letter asks that, since the Act is being amended, paralegals should be exempted, as lawyers are. “I referenced the Access to Justice Act as well, to make my point. I strongly urge all other paralegals to do the same, if you haven’t already.”

Protecting Consumers, Regulating Fees

The legislation would amend 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. It seeks to:

    • Curb aggressive door-to-door sales tactics on the sale of water heaters
    • Protect vulnerable, indebted consumers against the abusive practices of some companies offering debt settlement services
    • Help protect home buyers and sellers in real estate bidding
    • Give home sellers and buyers more power to negotiate both fees and commissions when working with a real estate professional

Government received more than 1,835 complaints and inquiries about door-to-door water heater rentals in 2013. The Bank of Canada has declared household debt to be the number-one domestic risk to the economy.

More on the Bill and its history is available at the Legislative Assembly website.

Read the previous Paralegal SCOPE article about Bill 55.

One comment

  1. Excellent article. I would hope the various organizations that serve our interests will be at the tip of the spear in pushing through this change – or it will just be more of the same in a stack of legislation that needs to be amended. Lee-Anne can’t do it all herself, and I would certainly encourage everyone to get on this. It is not that hard to draft a letter or sign on to one in development. Excellent work Lee-Anne

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