Law Times

Law TiMes • March 17, 2014 Page 13 www.lawtimesnews.com Paralegals seek changes to consumer protection law Crackdown on rogue debt services includes new registration requirement aralegals say a new pro- vincial law designed to crack down on rogue debt settlement services has le them shortchanged. Bill 55, the Stronger Protec- tion for Ontario Consumers Act that received royal assent in De- cember, creates new standards for companies that promise to reduce consumers' debts by negotiating on their behalf with creditors in exchange for a fee. But the new law also broadens the defi nition of a "collection agen- cy" under the Collection Agencies Act, forcing many paralegals op- erating in the area to register with the Ministry of Consumer Ser- vices or risk prosecution. e new defi nition includes anyone "off ering 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, where the services are provided in consider- ation of a fee, commission or other remuneration." Andrea Sesum, president of the Women's Paralegal Associa- tion of Ontario, says paralegals who send demand letters or at- tempt to negotiate settlements on behalf of a client will need to reg- ister. e act exempts "a barrister or solicitor in the regular practice of his or her profession" but makes no mention of paralegals. "We're regulated by the law so- ciety, the same as lawyers; we carry professional indemnity insurance, the same as lawyers," says Sesum. "I think we should have the same tools as lawyers in terms of preventing a claim. It's with- in our scope of practice. It's all about access to justice. If we don't have the full arsenal at our disposal, it's going to be harder to prevent future claims, and you could end up with more cases in Small Claims Court. at adds additional costs on taxpayers, who are already overburdened. e public is not being served, in our opinion." e bill brings Ontario in line with Alberta, Manitoba, and Nova Scotia in regulating debt settlement companies. e province's move followed a fl urry of complaints about overcharging and underper- formance by companies that promise to cut consumer debt or improve credit scores. e complaints included people who said they ended up in court despite assurances their credi- tors had accepted a settlement. When the government began fl oating the legislation, the On- tario Association of Credit Coun- selling Services said it was receiv- ing more than 100 complaints a month about the more than 20 debt settlement companies oper- ating in the province. When the bill passed third reading, Minister of Consumer Services Tracy MacCharles hailed the new law as a "win for consum- ers" in a statement. "As we take action on consumer concerns, we are helping to ensure that Ontario consumers are better informed about their rights. is will help build consumer con- fi dence when consumers enter into a contract, even when deal- ing with salespeople at their front door," she said. Measures introduced as part of Bill 55 include: • Limiting the overall amount of fees companies can charge for debt settlement services and banning upfront charges. • Requiring clear, transparent, and detailed contracts that in- clude information about the eff ect on a consumer's credit rating. • Establishing a 10-day cool- ing-off period to allow con- sumers time to consider the agreement. • Allowing for the revocation of licences for non-complaint companies. Blair DeMarco-Wettlaufer, who runs Kingston Data and Credit Inc., says he expects the new rules to fl ush out most of the bad actors from the debt-settle- ment business. " ey're going to have to close up shop, which will be great for consumers. It will also bring new players into the industry, which is going to drive down prices, too," he says. But he says paralegals will have a few extra hurdles if they want to take part. To register un- der the Collection Agencies Act, applicants must pay a fee, sit an exam, and meet a fi ve-year ex- perience requirement in collec- tions. Paralegals who work from a home offi ce may also face prac- tical problems since the legisla- tion requires registrants to oper- ate from a place of business open to the public. "It could take a few months for a paralegal to set that up," says DeMarco-Wettlaufer. Lee-Anne Gadd, a paralegal at Kingston Data and Credit, says she fears the licensing require- ment will deter paralegals from practising in the area. "It leaves us stuck in the mid- dle," she says, adding that she hopes the exemption becomes an issue in the upcoming election of paralegal benchers to the Law So- ciety of Upper Canada. "We need to make these kinds of changes. Considering we're regulated by the same people as lawyers, there's still too much di scriminatory language in leg- islation that should be changed now rather than later," she says. Sesum's association mounted a campaign to secure an amend- ment granting paralegals the same exemption lawyers enjoy under the Collection Agencies Act but was unable to convince a standing committee consider- ing the bill at the provincial leg- islature that one was necessary. Gerri Camus, the organization's vice president, worries that with the passage of Bill 55, paralegals have missed their best chance to get the amendment inserted. "It could take years for this to be brought to the table again. You have to fi nd an MPP who is willing to table it, and when there's only something like 13 pieces of legislation passing in an entire year, it's hard. Now we're in an election year, so it's not going to be so easy to get things tabled. We're not giving up, but it won't be easy." LT Subscribe today to the ultimate source for today's legal profession! Keep up-to-date and informed for only $75 a year. To order your copy visit www.canadianlawyermag.com or call 416.609.3800 or 1.800.387.5164 SUBSCRIBE TODAY AND RECEIVE: r JTTVFTDPOUBJOJOHVOCJBTFESFQPSUJOH BOEBOBMZTJTPG$BOBEBTMFHBMMBOETDBQF r '3&&FYDMVTJWFBDDFTTUPUIFCanadian Lawyer EJHJUBMFEJUJPOBOEEJHJUBMFEJUJPOBSDIJWFT r '3&&XFFLMZFOFXTMFUUFSm$BOBEJBO-FHBM/FXTXJSF FEJUFECZUIFTBNFFEJUPSTUIBUDSFBUFCanadian Lawyer FREE Digital edition included! Untitled-3 1 14-02-25 2:49 PM BY MICHAEL McKIERNAN For Law Times P It's back Canadian Lawyers' LegaL Fees survey Complete the survey online at surveymonkey.com/s/legalfees2014 and let us know what you are charging for various transactions and services in multiple practice areas. Survey closes March 31 2014 We need to make these kinds of changes. Considering we're regulated by the same people as lawyers, there's still too much discriminatory language in legislation that should be changed now rather than later. FOCUS

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