About BC Consumer Protection

Interpretive Bulletin: disclosures and debt collection activity

Was this information useful?
+ Yes
+ No

In April of 2015, the BC Government introduced legislation to regulate and license the debt settlement industry with amendments to the Business Practices and Consumer Protection Act (BPCPA). You can view the government press release here and the Bill in full here.

In preparation for the amendments coming into effect on April 1, 2016, debt industry stakeholders have been contacting Consumer Protection BC for clarification on amendments to section 115 of the BPCPA. These specific amendments modernized and enhanced the disclosure methods and requirements for collectors and creditors initiating debt collection activity.

Section 115 (1)(a) and (b) of the BPCPA require collectors, before attempting to collect a debt, to provide an initial written notice about specifics of the debt including:

  1. With whom the debt was incurred (the creditor) and to whom it is currently owed.
  2. The amount of the debt on the date it was first due and payable and is currently owed, including a breakdown of the amount if different than the amount when the debt first became due and payable.


LEGISLATION:
115  (1) A collector must not attempt to collect payment of a debt from a debtor until the collector has notified the debtor in writing or the collector has made a reasonable attempt to notify the debtor in writing of:

(a) the name of the creditor
      (i) with whom the debt was originally incurred, and
     (ii) to whom the debt is currently owed, if different from the creditor described in subparagraph (i),

(b) the amount of the debt
     (i) on the date it was first due and payable, and
    (ii) currently owing, including a breakdown of that current amount, if different from the amount of the debt on the date it was first due and payable…

The following clarifications are offered to assist debt industry stakeholders in the application and interpretation of section 115 of the BPCPA:

  • The written notice required by section 115(1) is a one-time notice, specific to a debt due and payable.  Subsequently, if a “new” amount becomes due and payable, collectors must send written notice before attempting to collect payment from a debtor.
  • A debt due and payable referred to in subsection (b) is the amount owing by a debtor to a creditor on a specific date. This date is the day on which the debt first became due and payable to the creditor. This date is rarely the date on which the creditor assigns the debt to a collector. 
  • The amount due and payable may be different than the amount on the date a creditor assigns the debt to a collector due to the addition of interest or deduction for payments applied to the amount since the debt was due and payable.
  • The breakdown the current amount due and payable must be inclusive of all amounts such as:
    • The original amount of the debt between the creditor and the debtor.
    • The aggregated total of payments made and the aggregated total interest accrued and any other adjustments made on the original amount due and payable at the time of notice. Collectors are required to disclose the aggregated payments, aggregated interest and any other adjustments made as distinct items in the written notice.

Frequently Asked Questions:

Q. If I am the creditor with whom the debt was incurred, do I have to send the written notice described in section 115(1)?
A. No.  Section 2(2) of the Debt Collection and Repayment Regulation (DCRR) exempts creditors from the requirements of section 115 of the Act when collecting on debts.

Q. If I purchased a debt owed a creditor, do I have to comply with the requirements of section 115?
A. Yes.  The requirement to provide written notification to a debtor before initiating collections activity applies to all collectors other than the creditor with whom the debt was originally incurred.

Q. Is the amount due and payable the amount assigned to me as the collector?
A. No. The amount due and payable is the date at which the enforceable obligation was created between the debtor and the creditor.

Q. Written notice can now be done in electronic form (e-mail). Does the e-mail format or template notice need to be submitted to Consumer Protection BC?
A. Yes. Section 5(b) of the DCRR requires a licence applicant to submit a copy of every written form of communication the applicant intends to use to collect debts. 

Q. Can a collector continue to communicate with a debtor by e-mail while collecting a debt?
A. Yes.

Q. What are aggregated amounts of payment and interest?
A. The correct sum total of each respective amount. For the purpose of section 115 (1) (b), the amount currently owed consists of the original amount owing net these aggregated amounts. Collectors are not required to further break down each and every monthly increment of accrued interest or a complete history of payments made by the debtor in relation to the debt.

Q. If there are multiple assignments of the debt does the disclosure under 115 need to be made each time the debt is assigned to a new collection agency?
A. Yes.