The Collection and Debt Settlement Services Act regulates the collection practices of collection agencies, its collectors as well as debt settlement services. This Act requires both agencies and collectors to be licensed, and requires agencies to submit a bond of surety in the amount of $10,000.
Collection agencies and collectors are subject to a number of rules when collecting debts from New Brunswick debtors. Section 14 of Regulation 84-256 under the Collection and Debt Settlement Services Act provides guidelines for permissible collection practices and prohibits a number of abusive collection practices. The Act also prohibits collection agencies from contacting debtors on a holiday. Please consult our list of New Brunswick holidays.
Many lenders/creditors hire collection agencies to collect past-due debts on their behalf. Any company or individual that carries on the business of collecting third-party debt is required to have a licence under this legislation.
Any debt settlement agencies offering to negotiate with creditors on behalf of consumers are required to obtain a licence, follow disclosure and contract requirements, and adhere to prohibited practices under the Act
. All prohibited representations, restrictions and service agreement requirements can be found under RULE CDSS-001 - Debt Settlement Services
. Required documentation for all service agreements can be found here
Failure to comply with the rules and regulations constitutes an offence punishable under the Act and may result in the suspension or cancellation of a licence, the forfeiture of a bond and fines and administrative penalties.
“collection agency” means a person, other than a collector, who
“collector” means a person employed, appointed or authorized by a collection agency to solicit business for the agency, to collect debts for the agency or to provide debt settlement services on behalf of the agency
(a) carries on the business of collecting debts for other persons in consideration of the payment of a commission on the amount collected or otherwise, whether the head office of the collection agency is within or outside the Province, or
(b) provides debt settlement services, whether the head office of the collection agency is within or outside the Province.
“debt settlement services” means offering or undertaking to act for a debtor in arrangements or negotiations with the debtor’s creditors or receiving money from a debtor for distribution to the debtor’s creditors, if the services are provided in consideration of a fee, commission or other remuneration that is payable by the debtor.
“debt settlement services agreement” means an agreement under which a collection agency provides debt settlement services to a debtor.