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Under the authority of section 31 of the Collections Act and the Subordinate Legislation Revision and Consolidation Act , the Lieutenant-Governor in Council makes the following regulations.
1. These regulations may be cited as theCollections Regulations.
2. In these regulations
(a) "Act" means the Collections Act; and
(b) "minister" means the minister appointed under the Executive Council Act to administer this Act.
3. The registration provisions of the Act do not apply to a non-profit or charitable organization or its employees engaged in pro-rating of debts, collecting and disbursing of money to creditors on behalf of debtors to whom the organization or its employees are providing credit and budget counselling.
Application for registration
4. (1) An application for registration as a collection agency under the Act shall be made to the registrar where the applicant is a partnership, a corporation or a sole proprietor, in accordance with the form prescribed by the minister.
(2) [Repealed by 54/97 s1]
(3) [Repealed by 54/97 s1]
90/85 s3; 96/90 s1; 127/93 s1; 54/97 s1
6. (1) Every application for registration as a collection agency under the Act shall be accompanied by a bond to the Crown in the amount of $20,000 issued by a company authorized by law to carry on the business of insurance in the province and every bond shall be in the form prescribed by the minister.
(2) The bond is forfeited and the amount of it is recoverable from the person bound by it as a debt due to the Crown where
(a) a conviction of an offence under the Act or the regulations is obtained;
(b) a criminal conviction involving fraud or theft or conspiracy to commit fraud or theft is obtained;
(c) a judgment based on fraud arising from a collection transaction is obtained;
a winding up or receiving order has been made under the Bankruptcy Act
(e) a judgment for recovery of money arising out of a claim in respect of anything done while acting as a collection agency or a collector is obtained
against a collection agency, collector or an official of a collection agency or where the collection agency is a partnership, a partner of that partnership and that conviction, judgment or order has become final.
(3) Every bond shall continue in force for a period of 2 years after the expiration of the period of registration to which the bond relates.
(4) The minister shall assign the proceeds of a bond forfeited under subsection (2) to the Trial Division.
(4.1) A person who claims the proceeds of the forfeited bond may apply to a judge of the Trial Division for an order directing that compensation be paid to him or her.
(5) In every case a creditor shall prove to the satisfaction of the judge that his or her claim is totally or partially unsatisfied and where it is later determined that a creditor has been improperly paid from the proceeds of the bond, the payment shall be recovered by action commenced by the Crown and once recovered the money shall be used to satisfy other claims against the bond.
(6) The onus shall be on the claimant to make the court aware of his or her claim and the department shall advertise within 30 days of forfeiture of the bond by notice in a local newspaper or in the manner that the minister shall direct.
(7) Once a bond has been forfeited, the proceeds of the bond shall be held in the court for 6 months from the date of forfeiture, and after that time all proper claims which remain unsatisfied shall be paid by the court as directed by the judge, and where the amount of the claims exceed the amount of the bond, the claims shall be paid on a pro-rata basis.
(8) The proceeds of a bond remaining after these payments shall be held by the court to pay further claims that may be made within 2 years of the date of forfeiture of the bond and these claims shall be paid in order according to the date on which each claimant gave the court written notice of his or her claim as directed by the judge.
(9) Where a bond has been forfeited under subsection (2), the balance of the proceeds remaining after payment of claims, less the expenses of the court, shall be repaid by the court to the bonding company at the expiration of 2 years following the date of forfeiture of the bond.
90/85 s5; 2013 c16 s26
7. Every application for registration under the Act shall be accompanied by
(a) a certified copy of the most recent balance sheet and auditor's report of the collection agency; and
(b) in the case of an incorporated company or partnership, a certified copy of the charter of incorporation or partnership agreement of the collection agency if these documents are not already filed with the Registrar of Companies.
Agency's documents required
8. (1) Every original application for registration submitted by a collection agency shall be accompanied by those forms of agreement, instruments and documents used or to be used by a collection agency.
(2) The agreements, documents and instruments referred to in subsection (1), together with changes occurring on them shall be submitted to the registrar for approval.
(3) The registrar shall prohibit the use of agreements, instruments or documents used by a collection agency which in the registrar's opinion are not in the public interest.
9. Every collection agency shall advertise only under the name for which it is registered and shall not misconstrue to the public that it is something other than a collection agency.
Record of accounts
10. (1) Every collection agency shall maintain records on every account requiring collection.
(2) Every collection made by a collection agency or collector shall be paid to the client within 50 days after the collection.
(3) Subject to the Act, records of accounts shall be preserved for not less than 6 years.
(4) Every collection agency shall, upon request by the registrar, furnish to the registrar all information concerning those accounts.
11. Every collection agency shall maintain a separate trust account in a financial institution in which the collection agency shall deposit all money paid to it in trust for others in connection with its business, which money shall be kept separate and apart from other money belonging to the collection agency and that money shall be disbursed in accordance with the terms of the trust.
Code of Practice
12. (1) In accordance with the following Code of Practice, a collection agency or collector shall not, in an attempt to make collections,
(a) where the debtor is an employee, contact the debtor by telephone, mail or in person at the debtor's place of employment;
(b) contact the employer of the debtor without the debtor's consent;
contact the debtor between the hours of
(d) threaten to proceed with an action for which he or she does not have authority;
(e) use coercive language, threaten loss of employment or loss of community ranking;
(f) communicate in any manner with a debtor unless he or she has previously sent him or her a written notice;
(g) make telephone calls or personal calls or written communications of a nature or frequency as to constitute harassment of the debtor, his or her spouse or a member of his or her family; or
(h) except to obtain the debtor's address, communicate with acquaintances, friends, relatives or neighbours of the debtor, unless that person is surety for the debtor.
(2) A collection agency, collector, person or firm acting on behalf of a collection agency when contacting a debtor by telephone shall immediately upon contacting the debtor identify itself as a collection agency and shall in no way use a device, comment or statement to infer otherwise.
13. A collection agency shall not raise an action in its own name for recovering a debt on behalf of a client.
14. The registrar may order a hearing to investigate a charge or complaint that a person has contravened a provision of the Act or regulations, or has made a false statement in a form, return, account or statement required to be completed or made under the Act or these regulations, and the persons holding those hearings shall have all of the powers that are conferred upon a commissioner by or under the Public Inquiries Act, including the power to take evidence under oath.
Procedure of hearing
15. (1) Where a hearing is held under section 14, the registrar shall notify the collection agency or collector of the time and place of hearing and shall notify the collection agency or collector of the particulars of the complaint or violation of the Act or these regulations in sufficient detail to enable the collection agency or collector to answer them.
(2) At a hearing under the Act or these regulations, the collection agency or collector may be represented by counsel and is entitled to cross-examine under oath a witness giving evidence.
(3) Where the registrar cancels or suspends registration, the registrar shall give the collection agency at least 7 days' notice of that cancellation or suspension.
90/85 s14; 54/97 s3
16. Where a decision to cancel or suspend the registration of a collection agency is made as a result of the hearing or by the collection agency waiving the hearing, the registrar shall cause notice of cancellation or suspension of registration to be published in the Gazette.
90/85 s15; 54/97 s4
17. The Collections Regulations, Newfoundland Regulation 90/85, are repealed.