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RSNL1990 CHAPTER C-22

COLLECTIONS ACT

Amended:

1996 cR-10.1 s12; 1997 c6; 2004 c36 s5; 2006 c40 s21; 2007 cT-9.1 s5; 2013 c16 s25

CHAPTER C-22

AN ACT RESPECTING COLLECTION AGENCIES AND COLLECTORS

Analysis



Short title

        1. This Act may be cited as the Collections Act.

1984 c34 s1

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Definitions

        2. In this Act

             (a)  "articled clerk" means a student as defined in the Law Society Act ;

         (a.1)  "collection agency" means a person who

                      (i)  collects debts for others,

                     (ii)  offers or undertakes to collect debts for others,

                    (iii)  solicits accounts for collection,

                    (iv)  collects debts owed to him or her under a name which is different from the name of the creditor,

                     (v)  mails to debtors or offers or undertakes to mail to debtors, on behalf of a creditor, collection letters,

                    (vi)  for consideration or hope or promise of consideration, enters into an agreement under the terms of which the person agrees to pay to a vendor an amount in respect of goods or services sold or supplied by the vendor to a person other than the collection agency,

                   (vii)  offers or undertakes to act for a debtor in arrangements or negotiations with the debtors creditors,

                  (viii)  receives money periodically from a debtor for distribution to his or her creditors,

                    (ix)  sells or offers for sale a collection system, device or scheme intended to be used to collect debts, or

                     (x)  acts as an independent court agent,

                   and includes a person who takes an assignment of a debt due at the date of assignment from a specified debtor;

             (b)  "collector" means an individual employed, appointed or authorized by a collection agency registered under this Act to solicit business or collect debts for the collection agency or to deal with or trace debtors for the collection agency and includes private bailiffs and independent court agents;

         (b.1)  "independent court agent" means a person who initiates or undertakes legal proceedings in a court, including a person who starts an action, appears in court or enforces a judgment to collect debts on behalf of another person, for consideration given or promised, but does not include

                      (i)  a barrister or solicitor, or

                     (ii)  an articled clerk who is under the direction of a barrister or solicitor;

             (c)  "minister" means the minister appointed under the Executive Council Act to administer this Act;

             (d)  "registered" means registered under this Act; and

             (e)  "registrar" means the Registrar of Collection Agencies and Collectors referred to in section 6.

1984 c34 s2; 1989 c19 Sch B; 1996 cR-10.1 s12; 1997 c6 s1; 2006 c40 s21

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Exemption

        3. (1) This Act does not apply to

             (a)  an insurer or agent or employee of an insurer or agent in respect of the collection of insurance premiums;

             (b)  a real estate broker or his or her employee, in respect of the collection of money incidental to the broker's business as a real estate broker;

             (c)  a person acting as an officer of or under the process or authority of a court;

             (d)  a person appointed under an Act, in respect of the collection of debts in the performance of his or her duty;

             (e)  a bank to which the Bank Act (Canada ) applies, or employees of the bank in the regular course of their employment;

             (f)  a loan company, trust company or finance company licensed under the Loan Companies and Finance Companies Licensing Act, or which meets the requirements of section 3 of the Trust and Loan Corporations Act or employees of the company in the regular course of their employment;

             (g)  an isolated collection made by a person whose usual business is not collecting debts for other persons; or

             (h)  a person exempted from the application of this Act by the regulations.

             (2)  This Act applies to a barrister or solicitor carrying on a collection agency in a name other than his or her own and in respect to the collection agency but does not apply to a barrister or solicitor in the practice of his or her profession, or to an articled clerk under the direction of a barrister or solicitor in the practice.

             (3)  This Act does not apply to companies and collectors who engage in collecting their own accounts but where a Code of Practice is promulgated as part of the regulations, companies and collectors who engage in collecting their own accounts shall conduct themselves in conformity with that code.

1984 c34 s3; 1996 cR-10.1 s12; 1997 c6 s2; 2007 cT-9.1 s5

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Act overrides contract

        4. This Act applies notwithstanding an agreement or waiver to the contrary.

1984 c34 s4

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Paramountcy of Act

        5. Where another Act or regulations made under another Act conflict with this Act or the regulations or an order or direction given under this Act or the regulations, this Act and the regulations and an order or direction given under this Act or the regulations prevails.

1984 c34 s5

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Registrar

        6. (1) The minister may appoint a Registrar of Collection Agencies and Collectors and a Deputy Registrar of Collection Agencies and Collectors.

             (2)  In the absence or incapacity of the registrar, the deputy registrar shall perform the functions and exercise the powers of the registrar.

1984 c34 s6

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Duties and powers

        7. (1) The registrar shall

             (a)  perform and exercise the powers, functions and duties conferred and imposed upon him or her by this Act and the regulations;

             (b)  consult and co-operate with the Government of Canada or a department, agency or body under the jurisdiction of the Parliament of Canada or of the Legislature of the province or with collection agencies and other interested persons as may be necessary or desirable for carrying out the purposes of this Act;

             (c)  investigate complaints regarding the operation of this Act or the regulations and regarding collection agencies and persons engaged in collection agency business;

             (d)  undertake, promote or recommend measures for the development, control and direction of collection agency business in the province;

             (e)  collect, compile, analyze and record the statistical and other information relating to collection agency business that may be useful;

             (f)  prepare and publish the statistics, information and advice in relation to collection agencies that may be useful in relation to a matter that he or she considers desirable in the public interest;

             (g)  foster, through investigation and research, knowledge of the collection agency business and of its development, control and direction and of the means of dealing with conditions relating to the business;

             (h)  conduct studies, inquiries and surveys for the purpose of obtaining information on who is carrying on collection agency business in the province, their methods and practices of carrying on business;

              (i)  subject to the approval of the Lieutenant-Governor in Council, engage professionally or technically qualified persons for the purposes of this Act;

              (j)  do other things or exercise other powers that are necessary or desirable for carrying out the purposes of this Act; and

             (k)  exercise and discharge other powers, functions and duties that the Lieutenant-Governor in Council assigns to him or her.

             (2)  For the purpose of carrying out the powers, functions and duties under this Act, the registrar has the powers, privileges and immunities that are or may be conferred upon a commissioner under the Public Inquiries Act, and the registrar is considered to be an "investigating body" for the purposes of the Public Investigation Evidence Act.

             (3)  The registrar may require further information or material to be submitted within a specified time by an applicant for registration or by a registered collection agency or collector and may require verification by affidavit or otherwise of information or material submitted.

             (4)  Where, in the opinion of the registrar, a registered collection agency or collector is making false, misleading or deceptive statements relating to collection agency business, the registrar may order the immediate cessation of the use of that material.

1984 c34 s7

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Advisory committees

        8. (1) In order to carry out the purposes of this Act the minister may establish those advisory committees that he or she considers necessary or desirable and appoint the members to them.

             (2)  The Lieutenant-Governor in Council may authorize the payment of a daily allowance or remuneration to some or all of the members of an advisory committee, and they may be paid reasonable expenses incurred in the course of their duties.

1984 c34 s8

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Investigations

        9. (1) The registrar, or a person authorized by him or her in writing, in this section referred to as an "investigator", may investigate and inquire into a matter the investigation of which the registrar considers expedient for the administration of this Act.

             (2)  An investigator may at reasonable times

             (a)  enter upon a business premises so long as it is reasonably necessary to determine compliance with this Act; and

             (b)  demand the production of and inspect the business books, documents, correspondence and records that the investigator believes on reasonable grounds are in respect of the person about whom the investigation is being made.

             (3)  Where the registrar believes on reasonable grounds that a person has contravened this Act or regulations, an investigator may, with a warrant issued under subsection (4), at a reasonable time enter upon the business premises and may investigate, inquire into and examine the affairs of the person in respect of whom the investigation is being made and into books, documents, correspondence and records in relation to the person and into property, assets or things owned, acquired or alienated in whole or in part by the person or by a person acting on behalf of or as agent for that person.

             (4)  A Provincial Court judge who is satisfied by information upon oath or affirmation that there are reasonable grounds for believing that there is on a business premises anything that will give evidence with respect to an offence under this Act may issue a warrant authorizing an investigator named in the warrant to enter and search those premises and to make the inquiries and copies of books, documents, correspondence and records that are considered necessary, subject to the conditions that may be specified in the warrant.

             (5)  The owner or person in charge of the premises referred to in this section and a person found there shall give an investigator reasonable help to enable the investigator to carry out his or her duties and functions under this section and shall provide the information that the investigator may reasonably require.

             (6)  The person occupying or in charge of premises entered under this section shall answer questions concerning the investigation and shall produce for inspection, and the making of copies, the books, documents, papers, correspondence or records that the investigator may demand.

             (7)  Where an action or proceeding is taken against an investigator for anything done by him or her under this Act or the regulations and the court before which the action or proceeding is taken is satisfied that there was probable cause for the action of the investigator and that it was not malicious, a verdict or judgment shall not be given against the investigator for more than $0.05 damages or for costs of suit.

1984 c34 s9; 1985 c11 s37; 2004 c36 s5

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Finances

      10. Payments required to be made by or on behalf of the Crown in carrying out this Act or the regulations shall be paid by the Minister of Finance, on the request of the minister, out of the Consolidated Revenue Fund of the province.

1984 c34 s10

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Restrictions on activities

      11. (1) A collection agency shall not

             (a)  collect or attempt to collect for a person for whom the collection agency acts money in addition to the amount owing by the debtor;

             (b)  make charges against a person for whom the collection agency acts in addition to those contained in the agreement with that person;

             (c)  send a telegram or make a telephone call, for which the charges are payable by the addressee or the person to whom the call is made, to a debtor for the purpose of demanding payment of a debt;

             (d)  enter into an agreement with a person for whom the collection agency acts unless a copy of the form of the agreement is filed with the registrar;

             (e)  deal with a debtor in a name other than that authorized by the registration;

             (f)  use a form or form of letter to collect or attempt to collect money from a debtor unless a copy of the form or form of letter is filed with the registrar; or

             (g)  use, without lawful authority, a summons, notice, or demand, or other document, expressed in language of the general style or purport of a form used in a court of the province, or printed or written or in the general appearance or format of that form.

             (2)  Notwithstanding an agreement to the contrary between a debtor and a creditor, costs incurred by a collection agency or by the creditor in employing a collection agency to collect the debt shall not be considered to be a part of the amount owing by the debtor and shall not be recoverable by the creditor or by the collection agency acting on behalf of the creditors.

1984 c34 s11

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Collection agencies

      12. (1) A person shall not carry on business as a collection agency in the province unless he or she is registered.

             (2)  An applicant for registration as a collection agency is entitled to be granted registration except where,

             (a)  the applicant's financial responsibility or record of past conduct is such that it would not be, in the opinion of the registrar, in the public interest for the registration to be granted;

             (b)  the applicant is a corporation, its financial responsibility or the record of past conduct of the corporation or its officers or directors is such that it would not be, in the opinion of the registrar, in the public interest for the registration to be granted; or

             (c)  the applicant is or proposes to be in contravention of this Act or the regulations.

             (3)  A registration is subject to the terms, conditions and restrictions that are consented to by the applicant, imposed by the registrar or prescribed, and the registrar may, by written notice to a collection agency, add to, or remove or alter terms, conditions or restrictions to which the registration of the collection agency is subject.

             (4)  A person shall not publish a statement or representation that he or she is registered under this Act.

1984 c34 s12

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Collectors

      13. (1) A person shall not act as a collector unless that person is employed and supervised by a registered collection agency.

             (2)  The registrar may direct that a person cease to act as a collector where

             (a)  in the opinion of the registrar, the financial responsibility of the collector or record of past conduct is such that it would be in the public interest to direct that the person cease to act as a collector; or

             (b)  the collector is or proposes to be in contravention of this Act or the regulations.

             (3)  A collection agency is responsible for the actions of the collectors which it employs and shall ensure that those collectors comply with the Act and the regulations.

1997 c6 s3

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Application for registration

      14. (1) A person shall apply for registration upon a form provided by the registrar and shall send along with the application form the fees prescribed.

             (2)  [Rep. by 1997 c6 s4]

1984 c34 s14; 1997 c6 s4

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Annual reporting and fees

      15. (1) A registered collection agency shall submit to the registrar an annual report and fee as required by the minister.

             (2)  The registrar may suspend or cancel the registration of a registered collection agency which fails to comply with subsection (1).

1997 c6 s5

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Address for service

      16. (1) An applicant for registration shall indicate to the registrar a current address for service in the province, and a document sent or served to the applicant under this Act or the regulations shall be considered to be sufficiently sent or served if delivered personally or mailed by registered mail to that address for service.

             (2)  Where a document referred to in subsection (1) is mailed by registered mail, it is considered to be served on the 3rd day following the day it is deposited in the post office by the sender.

1984 c34 s16

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Changes in registration information

      17. (1) A registered collection agency shall within 5 days of the following, notify the registrar in writing of the event:

             (a)  a change in an address for service or a telephone number;

             (b)  [Rep. by 1997 c6 s6]

             (c)  in the case of a partnership, a change in the members of the partnership; or

             (d)  in the case of a corporation, a change in the ownership of its shares, or in the officers of the corporation.

             (2)  Where the registrar is satisfied that providing notification within 5 days of a change in share ownership would cause undue hardship to a registered collection agency the registrar may, in writing, extend that period.

             (3)  [Rep. by 1997 c6 s6]

1984 c34 s17; 1997 c6 s6

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Rep. by 1997 c6 s7

      18. [Rep. by 1997 c6 s7]

1997 c6 s7

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Suspension or cancellation

      19. (1) The registrar may suspend or cancel a registration where he or she considers it to be in the public interest to do so or where the registrar is satisfied that the person registered

             (a)  has violated this Act or the regulations or has failed to comply with the terms, conditions or restrictions to which the person's registration is subject;

             (b)  has made a material misstatement in the application for registration or in the information or material submitted to the registrar;

             (c)  has been guilty of misrepresentation, fraud, deceit or dishonesty; or

             (d)  has demonstrated incompetency or untrustworthiness to carry on the business of a collection agency.

             (2)  The registrar shall not refuse to grant, or cancel or suspend a registration without giving the collection agency an opportunity to be heard.

             (3)  The registrar may cancel the registration of a natural person who is a collection agency when he or she is satisfied that the person has died.

             (4)  The registrar may strike off the register the name of a collection agency that is a company where he or she is satisfied that the company has been dissolved or has been struck off the register under the Corporations Act.

             (5)  The registrar may strike off the register the name of a collection agency who is bankrupt.

1984 c34 s19; 1986 c12 Sch; 1987 c38 Sch B; 1997 c6 s8

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Provincial place of business

      20. (1) A registered collection agency shall maintain a permanent place of business within the province open to the public during normal business hours that is satisfactory to the registrar.

             (2)  Where the registrar believes that a registered collection agency is not carrying on business in the province, he or she may send to the collection agency a letter by registered mail inquiring whether the collection agency is carrying on business in the province and stating that where an answer to the letter is not received within 1 month from the date of the letter the registration of the collection agency will be cancelled and a notice of cancellation will be published in the Gazette.

             (3)  Where the registrar

             (a)  receives an answer from the collection agency to the effect that the collection agency is not carrying on business as a collection agency; or

             (b)  does not within 1 month after sending the letter receive an answer to it,

the registrar may cancel the registration of the collection agency and publish a notice of the cancellation in the Gazette.

             (4)  [Rep. by 1997 c6 s9]

1984 c34 s20; 1997 c6 s9

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Keeping of records

      21. (1) A registered collection agency shall,

             (a)  keep proper records and books of account showing money received and money paid out, including a receipt book, cash book, client's ledger, debtor's ledger, and journal or equivalent machine accounting records satisfactory to the registrar; and

             (b)  maintain a trust account in a financial institution and shall deposit all money received on behalf of clients in that trust account.

             (2)  Money cannot be withdrawn from a trust account except

             (a)  money paid to or on behalf of a client from funds which have been deposited in a trust account to the client's credit;

             (b)  money required for payment to the collection agency for charges under an agreement to collect debts or disbursements made on behalf of a client from money belonging to the client; or

             (c)  money paid into the trust account by mistake.

1984 c34 s21

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Audit requirements

      22. (1) A registered collection agency shall, subject to the regulations, appoint an auditor satisfactory to the registrar, who shall have a right of access to all books, documents, accounts and vouchers of the collection agency, and be entitled to receive from that collection agency and employees information and explanations necessary for the performance of their duties as auditors.

             (2)  Employees of a registered collection agency shall at reasonable times provide the information and explanations that the auditor requests.

             (3)  The auditor shall make a report to the collection agency on the accounts examined and on the balance sheet of the collection agency and the report shall state

             (a)  whether or not the auditor has obtained all the information and explanations the auditor requested;

             (b)  whether in the auditor's opinion the balance sheet referred to in the report is properly drawn up so as to exhibit correctly the state of the affairs of the business of the collection agency according to the best of the auditor's information and the explanations given to the auditor and as shown by the books of the business of the collection agency;

             (c)  in what respect the auditor finds the books, documents, accounts or vouchers incorrect and not in accordance with the law;

             (d)  the appropriateness or otherwise of the several forms of account kept by the collection agency; and

             (e)  the gross amount of the money collected for the preceding 12 months.

             (4)  The auditor shall forward to the registrar a copy of a report made under this section.

1984 c34 s22

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Annual report

      23. (1) A registered collection agency shall prepare at the end of each financial year, a report on the affairs of the business of the collection agency for the preceding financial year, and a balance sheet of the business of the collection agency and a statement of profit and loss during the period covered by the report.

             (2)  The report, balance sheet and statement of profit and loss referred to in subsection (1) shall be signed by the collection agency, certified by the auditor, and forwarded to the registrar not later than 3 months after the close of the financial year to which they relate.

1984 c34 s23

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Unregistered agency

      24. (1) A person shall not

             (a)  employ a collection agency; or

             (b)  send letters or notices or make verbal demands upon debtors by a collection agency

unless the collection agency is registered.

             (2)  A prosecution for an offence under subsection (1) shall not be started without the prior written consent of the minister.

1984 c34 s24; 1997 c6 s10

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General offence

      25. (1) A person who

             (a)  fails to comply with or otherwise contravenes this Act or the regulations or an order or direction given under this Act or the regulations; or

             (b)  makes a false statement in an application, form, report, return, account, record, statement, instrument or other document completed or made under this Act or the regulations or under an order or direction given under this Act or the regulations

is guilty of an offence and liable on summary conviction to a fine of not more than $5,000 or to imprisonment for a period not exceeding 12 months, or to both a fine and imprisonment.

             (2)  A director or officer of a corporation who knowingly concurs in

             (a)  a failure to comply with or other contravention of this Act or the regulations or an order or direction given under this Act or the regulations; or

             (b)  the making of a false statement in an application, form, report, return, account, record, statement, instrument or other document completed or made under this Act or the regulations or under an order or direction given under this Act or the regulations

is guilty of an offence and liable on summary conviction to a fine of not more than $5,000 or to imprisonment for a period not exceeding 12 months, or to both a fine and imprisonment.

             (3)  Notwithstanding subsection (1), where a corporation is convicted of an offence under subsection (1), it is liable to a fine of not more than $25,000.

1984 c34 s25; 1997 c6 s11

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Proof of carrying on business

      26. Where, in a prosecution for an offence under this Act, it is alleged that the accused carried on business as a collection agency without being registered, evidence of one transaction is, in the absence of evidence to the contrary, evidence that the accused carried on the business.

1997 c6 s12

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Proof of registration

      27. A statement as to

             (a)  the registration or non-registration of a person;

             (b)  the filing or non-filing of a document or material required or permitted to be filed with the registrar;

             (c)  the time when the facts upon which proceedings are based first came to the knowledge of the registrar; or

             (d)  other matters concerning the registration, non-registration, filing or non-filing or to the person, document or material,

purporting to be certified by the registrar is, without proof of the office or signature of the registrar, receivable in evidence as, in the absence of evidence to the contrary, proof of the facts stated there in an action, proceeding or prosecution.

1984 c34 s27

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Limitation period

      28. Notwithstanding the Summary Proceedings Act , a prosecution under this Act or the regulations shall be started within 3 years from the date on which the offence is alleged to have been committed.

1984 c34 s28

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Appeal

      29. (1) A person dissatisfied with a decision, order or direction of the registrar may appeal to a judge of the Trial Division.

             (2)  Where a person proposes to appeal under subsection (1), that person shall, within 30 days after notice to him or her of the decision, order or direction of the registrar serve on the registrar a written notice of his or her intention to appeal.

             (3)  A notice of appeal served under subsection (2) shall be signed by the appellant or by the appellant's solicitor or agent, and, in the notice, the grounds of the appeal shall be set out, and the appellant shall file a copy of the notice with the court.

1984 c34 s29; 1986 c42 Sch A; 2013 c16 s25

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Hearing of appeal

      30. (1) The appellant shall, not less than 14 days before the hearing of the appeal serve upon the registrar a written notice of the day appointed for the hearing.

             (2)  The judge shall hear the appeal and the evidence brought forward by the appellant and the Crown in a summary manner and shall decide the matter of the appeal, and the judge may confirm, vary or set aside the decision, order or direction.

             (3)  The registrar shall produce before the judge on the hearing of the appeal all papers and documents in his or her possession affecting the matter of the appeal.

             (4)  The costs of the appeal are in the discretion of the judge, who may make an order respecting them in favour of or against the Crown and may fix the amount of the costs.

1984 c34 s30

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Regulations

      31. The Lieutenant-Governor in Council may make regulations

             (a)  providing for the registration of collection agencies;

             (b)  prescribing the information to be supplied by applicants for registration;

             (c)  prescribing the terms and conditions of registration;

             (d)  requiring collection agencies or a specified collection agency or class of collection agencies to be bonded in the form and terms and with the collateral security that are prescribed and providing for the forfeiture of security and the disposition of the proceeds;

             (e)  respecting the suspension or cancellation of registration;

             (f)  exempting persons or a class of persons from the application of this Act or of the regulations;

             (g)  providing for the approval of forms of agreements and other instruments and documents to be used by collection agencies;

             (h)  requiring a collection agency to submit forms of agreements, instruments and other documents used by the agency to the registrar for approval;

              (i)  requiring the use by collection agencies of agreements, instruments and other documents that are in a form approved by the registrar and prohibiting the use by collection agencies of agreements, instruments or documents that are not in a form approved by the registrar;

              (j)  regulating forms of advertising by collection agencies relating to their operations;

             (k)  prescribing the content of records to be kept by collection agencies and the length of time for which they must be kept;

              (l)  prescribing reports and returns to be made and information to be provided by collection agencies and requiring them to be made and provided to the registrar or other person designated by the regulations;

           (m)  prescribing the manner in which collection agencies are to hold, account for and pay over money collected by them;

             (n)  prescribing the nature and amount of fees and other charges which collection agencies may recover or attempt to recover for their services from their clients;

             (o)  prohibiting the use of a particular method in the collection of debts by collectors or collection agencies;

             (p)  prohibiting the bringing of action by collectors or collection agencies for the recovery of debt, in respect of which they are acting as collectors or collection agencies, in a court of this province;

             (q)  providing for the holding of inquiries into the operation of this Act and into a charge or complaint that a person has contravened this Act or the regulations, or has made a false statement in information required to be completed or made under this Act or the regulations or into another matter arising in the administration of this Act, and providing that the person holding the inquiry shall have the powers that are or may be conferred upon a commissioner under thePublic Inquiries Act;

              (r)  [Rep. by 1996 cR-10.1 s12]

             (s)  prescribing fees for registration and renewal of registration, searches, certificates and other matters or services rendered or supplied by the registrar; and

              (t)  generally, to give effect to the purpose of this Act.

1984 c34 s31; 1996 cR-10.1 s12; 1997 c6 s13