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Credit Business Practices Regulations – Debt Collection Practices

Guideline to follow: Organizations should comply with BOTH Federal and Provincial requirements, and use the more conservative or consumer friendly provision as the standard followed. For example: If Provincial guidelines prohibit calls to a customer’s employment, those guidelines are to be adhered to.

 

Section: 7 (1)

Requirement:

An institution that communicates with a debtor in order to collect payment of a debt from the debtor must inform them of the following information:

(a) the details of the debt, such as the amount owed and the type of debt; and

(b) the identity of, or a unique identifier for, any person who is attempting to collect the payment on behalf of the institution and their relationship with the institution

Process:

Name of individual and organization will be included on any correspondence. Left messages will not have the name of the organization left on the message given potential privacy issue.

BP Directive:

The organization is required to be compliant regarding both oral and written communications. Correspondence and telephone conversations should clearly identify the name of the agency or firm and that they are calling or writing on behalf of CIBC. There should also be a way to identify the individual caller or writer, either by name or a unique identification number. When a voicemail message is left for a customer, the caller must advise the customer that they are calling on behalf of CIBC, provide a return telephone number and leave the name of the organization (abbreviated format, so as to not disclose the nature of the call to a 3rd party – E.g. company ABC). Attached is an example of scripts used by CIBC when communicating with customers:

 

Section: 7 (2)

Requirement:

An institution may not communicate or attempt to communicate with a debtor, any member of the debtor’s family or household, any relative, neighbor, friend or acquaintance of the debtor or the debtor’s employer by any means, or in a manner or with a frequency that constitutes harassment including

(a) the use of threatening, profane, intimidating or coercive language;

(b) the use of undue, excessive or unreasonable pressure; or

(c) making public, or threatening to make public, a debtor’s failure to pay.

Process:

No specific limitation will be placed on the number of attempts. Given the purpose of collections is to speak to the customer and resolve the situation, attempts will be made throughout the day to establish contact or leave at least one message at each number on file.

BP Directive:

If no home number is provided, the number highlighted as the primary number should be called before attempting contact on other numbers. Any new assignments of the file also require at least 2 initial attempts at the home/primary number (where provided). A reasonable period of time should be allocated between attempts.

For example, the attached document refers to CIBC call attempts and subsequent diarization periods.

 

Section: 7 (3)

Requirement:

Except for the sole purpose of obtaining a debtor’s address or telephone number, an institution may not contact or attempt to contact any member of the debtor’s family or household or any relative, neighbor, friend or acquaintance of the debtor unless

(a) that person has guaranteed to pay the debt and is being contacted in relation to that guarantee; or

(b) the debtor has given their express consent.

Process:

No confirmation is provided in writing, paper or electronic form, for once off instances where authorization is provided.

BP Directive:

The organization should not attempt to contact any member of the debtor’s family or household or any relative, neighbor, friend or acquaintance of the debtor for any other purpose, other than as provided by this Regulation, or unless permission is obtained in writing.

Any written request from the customer to contact a 3rd Party is required to be scanned in the respective system being utilized (DRS/DRN/ASSET) and any authorization as per our current directives should be documented in the notes.

 

Section: 7 (4)

Requirement:

If the consent referred to in paragraph (3)(b) is given orally by the debtor, the institution must, without delay, provide confirmation of that consent to the debtor in writing, in paper or electronic form.

Process:

No confirmation is provided in writing, paper or electronic form, for once off instances where authorization is provided.

BP Directive:

If a customer wishes us to speak with a spouse for example regarding the account going forward, the customer is required to provide confirmation of authority in writing.

A letter is required to be issued and then subsequently placed on the system (if not being issued out of the existing system) to confirm the verbal instructions. A standard letter will be provided by CIBC to be implemented by each organization with their respective letter heads, contact names etc…
A sample of the letter is attached below:

 

Section: 7 (5)

Requirement:

Unless otherwise authorized in writing by the debtor, an institution may contact a debtor’s employer solely for the purpose of confirming that the debtor is employed, the nature of their employment and their business title and business address.

Process:

BP Directive:

If a customer wishes us to speak with a spouse for example regarding the account going forward, the customer is required to provide confirmation of authority in writing.

The organization should not be contacting the debtor’s employer except in accordance with these Regulations.

 

Section: 7 (6)

Requirement:

An institution may not contact a debtor at the debtor’s place of employment unless

(a) the institution does not have the home address or home telephone number of the debtor;

(b) attempts by the institution to contact the debtor at their home telephone number have failed; or

(c) the institution obtains written authorization from the debtor to do so.

Process:

Calling strategy to be amended to attempt to call the home number before attempting to call the business number.

At least two attempts will be made to the home number before contact is made at the place of employment.

If the attempts to contact the debtor at home have failed, the process of attempting the debtor at home again would only apply if the debtor’s account leaves and reenters collections. However if the accounts remains in collections the fact there are ‘failed’ attempts to contact the debtor at the primary number it would be reasonable to contact the debtor at the place of employment unless otherwise agreed to, without having to attempt the home number again given the previous failure.

BP Directive:

At least 2 attempts must be made initially to the debtor’s home number or primary contact number before contacting the debtor at his/her place of employment. The only exception would be in cases where an explicit written authorization is obtained from the customer that states otherwise.

Any written request from the customer is required to be scanned in the respective system being utilized (DRS/DRN/ASSET).

 

Section: 7 (7)

Requirement:

Except with the written consent of the debtor, an institution may not contact a debtor, any member of the debtor’s family or household, any relative, neighbor, friend or acquaintance of the debtor or the debtor’s employer or guarantor

(a) on a Sunday, except between the hours of 1:00 p.m. and 5:00 p.m. local time for the person being contacted;

(b) on any other holiday (provincial, municipal); or

(c) on any other day, except between the hours of 7:00 a.m. and 9:00 p.m. local time for the person being contacted

Process:

The definition of a holiday would be provincial or statutory.

BP Directive:

The organization must adhere to these restrictions, and even more stringent ones if applicable in that Province or Territory based on applicable Provincial/Territorial Consumer Protection legislations.

A holiday includes any statutory holiday identified under Federal and Provincial legislation. The holiday schedule will be provided at the beginning of the year to each organization. This schedule will be in line with the Province specific branch holiday schedule as followed by CIBC. Note that as per our current directives, CIBC does not allow Sunday calling. Inbound calls only will be permitted on these days. An example of the 2009 holiday schedule is attached.
A similar document will be sent for 2010.

 

Section: 7 (8)

Requirement:

Except if the debtor or any other person referred to in subsection (7) has provided a cellular telephone number as a contact number, an institution may not knowingly communicate or attempt to communicate with the debtor or that person for the purpose of collecting, negotiating or demanding payment of a debt by a means that renders the charges or costs incurred for the communication payable by the debtor or that person, as the case may be

Process:

If the debtor or member of family for example provides the cell number as a contact number the debtor can be contacted on that number. If the debtor advises not to call the cell number, no call should be made to that number.

If the debtor provides the cell number then by implication authorization has been provided to contact the respective number.

BP Directive:

If the organization is specifically aware of a number being a cellular number and the customer has highlighted their preference for not being called on that cell number, the organization would need to ensure that no calls are made to that respective number.

 

Section: 7 (9)

Requirement:

An institution that has communicated with a debtor in respect of the collection of a debt may not communicate with the debtor again in the course of that collection

(a) by a means other than in writing, if the debtor makes a written request by registered mail to the institution to communicate with the debtor only in writing in that regard and provides an address at which they may be contacted;

(b) by a means other than through the debtor’s legal advisor, if the debtor makes a written request to the institution to communicate with the debtor in that regard only through the debtor’s legal advisor and provides a telephone number and an address for the legal advisor; or

(c) without the debtor’s consent, if the debtor notifies the institution by registered mail that the debt is in dispute and that they intend to take the matter before a dispute resolution body or that they are prepared for the institution to take the matter to court.

Process:

BP Directive:

Organizations must comply with these provisions.

If a customer makes a written request by registered mail to be contacted in writing only OR If a customer requests that ONLY a 3rd party be contacted with regards to the debt, this document is required to be scanned in the respective system being utilized (DRS/DRN/ASSET), documented in the notes. The 3rd party information and/or the request to be contacted in writing only is to be populated in the “Communication Window” on DRS.

IF the customer has indicated that their request applies to all CIBC accounts, the organization must notify CIBC immediately of the customer’s request (through the respective Relationship Officer).

 

Section: 7 (10)

Requirement:

An institution may not misrepresent the purpose of a communication in respect of the collection of a debt with any person or give, directly or indirectly, by implication or otherwise, any false or misleading information in the course of that communication.

Process:

BP Directive:

Organizations must comply with these provisions, and ensure they do NOT misrepresent themselves, or the purpose of the communication

 

Section: 7 (11)

Requirement:

Despite any agreement to the contrary between a debtor and an institution, any charges made or incurred by the institution in collecting a debt, other than charges referred to in section 18 of any of the following regulations, are not considered to be a part of the amount owing by the debtor and may not be recovered from the debtor by the institution:

(a) Cost of Borrowing (Banks) Regulations;

(c) Cost of Borrowing (Trust and Loan Companies) Regulations;

Process:

BP Directive:

Organizations must ensure that charges are adequately disclosed. Refer to the Cost Of Borrowing document below for clarity on this provision and the overall changes:
http://www.fin.gc.ca/n08/data/09-048_1.pdf

Section: 7 (12)

Requirement:

An institution may not collect or attempt to collect payment in respect of a debt from any person who is not liable for the debt.

Process:

BP Directive:

Organizations must comply with this provision.

 

Section: 7 (13)

Requirement:

An institution may not directly or indirectly threaten or state an intention to proceed with any legal action if it does not actually intend to do so

Process:

BP Directive:

Organizations must comply with this provision.

 

Section: 7 (14)

Requirement:

An institution may not, for the purpose of attempting to collect a debt, use any document that unlawfully purports to originate from any court within or outside Canada.

Process:

BP Directive:

Organizations must comply with this provision.

Call us today and ask any questions that might be on your mind at (416) 663-5444

Alternatively you can write to us here and one of our Counsellors will be happy to assist you.
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