Receivable/Accounts - Information for Credit and Collection Issues

Friday, January 29, 2021

Nova Scotia Collection Act Changes for 2021

It looks like other provinces are following British Columbia and Ontario’s lead, and following with legislative changes to allow email notices for mandatory initial collection letters.

The new law, originally introduced in 2012 (?!) has finally passed.
  It was proposed as Bill 107 under the name “Debt Collection and Management Reform (2012) Act”, and it comes into effect May 1st, 2021.  The final act isn’t available in PDF form, but here’s the proposed wording that will come into force.

he Proposed Act Changes:

The Updated Regulations:

Contact Methods

The new act clearly identifies a “contact[ing] by telephone, personal call, or electronic means” as a contact attempt, and now adds the specific limitation of three contact attempts in a seven-day period.

n the regulations, it now allows the initial collection notice to be sent by email.  Nothing specific about privacy, shared email addresses, etc, so caution should still be exercised, and I discussed this point in an earlier blog when Ontario rolled out allowed email collection notices.

“In clause 20(1)(f) of the Act, “written notice” includes a notice sent by e-mail”

It also specifically calls out new limitations for contacting employers, unless to confirm employment, or get a debtor’s address or telephone number, and only one contact is allowed.

nother interesting clause is a collection agency must inform a consumer of changes to reporting a debt to the credit bureau.  It’s not clear if a pre-emptive collection notice might count (eg. “your file will be reported to the credit bureau within 7 days if not paid”), or what they mean by a change of status – so if a file is closed with an agency, does that mean a notice has to go out stating it’s been reported to the bureau as closed?

“A holder of a collection agency licence who has reported a debt to a consumer reporting agency must inform the consumer reporting agency of any change in the status of the account within 35 days of the change in status.”

As well, calls to consumers on specific holidays are now called out as prohibited -- New Year’s Day; Nova Scotia Heritage Day (the 3rd Monday in February), Good Friday, Victoria Day, Canada Day, Natal Day (the 1st Monday in August), Labour Day, Thanksgiving Day, Remembrance Day, Christmas Day, and Boxing Day.

Debt Settlement

The new act adds in debt settlement services as part of the act, and now requires debt settlement companies to be licensed.

“debt management agency” means a person, other than a debt management agent, who carries on the activities of offering or undertaking to act for a debtor in the Province in arrangements or negotiations with the debtor’s creditors or receiving money from a debtor for distribution to the debtor’s creditors in consideration of a fee, commission or other remuneration that is payable by the debtor"

But more interestingly, unlike Ontario, a collection agency cannot also serve as a debt settlement service.

“No person may hold both a collection agency licence and a debt management agency licence”

There’s a lot of verbiage about the limtiations on a debt settlement company, its’ contractual obligations, a cap on fees, and other clauses for consumer protection throughout the Act.

In Province Trust Accounts

It looks like out of province collection agencies are going to have to open another trust account, in the province of Nova Scotia.

“Every collection agency and debt management agency shall maintain a trust account in a bank in the Province and shall deposit into the trust account all of the money collected on behalf of another person or received from a debtor for distribution to the debtor's creditors, without making any deduction, within three days of collecting or receiving the money.”

Lawyers Need Licensing?

In the Ontario Collection & Debt Settlement Services Act, exemptions for lawyers and paralegals were limited in 2018, and the Act calls out specifically what lawyers and paralegals can and can’t do, and which parts of the Act apply whether licensed as an agency or not.  The Nova Scotia doesn’t address lawyers speifically by name, but they do add the following clause:

“requires any person or individual holding itself, himself or herself out as a collection agency, debt management agency, collector or debt management agent to hold the appropriate licence”

That would imply that a law firm advertising debt collection services will need to hold a license.  Time will tell if that is how it is interpreted by the provincial registrar.


Some of the penalties for not following the act have increased, up to $300 or $500 per occurrence.  Not quite as severe as the Ontario or Alberta financial penalties, but gives the province an extra level of leverage for enforcement beyond the nuclear option of removing an agency’s license.

The revised Act also specifically prohibits publishing or threatening to publish a debtor’s failure to pay, including online methods.  This is something the Privacy Commissioner of Canada’s office has previously weighed in on as illegal, so no huge procedural change there, but adds some consistency in preventing bad actors from publishing a website or going on social media to call out debtors or balances owed.

Less Red Tape!

While I cannot find a specific clause referring to these changes in the proposed legislation, the notice sent out by Business Licensing, Service Nova Scotia and Internal Services on January 21st, 2021 to all licensed agencies states that the manager’s exam for a branch is no longer a requirement.  I’m not sad about that, it was a three hour exam, and is probably the hardest legislative requirement for collection agency licensing in all of Canada.


It will be interesting to see if there are any other interpretations or applications of the changes to the Nova Scotia Collection & Debt Management Agencies Act.  If you have any questions, suggestions or input, I’m always glad to hear from you.

hanks kindly,

lair DeMarco-Wettlaufer
INGSTON Data & Credit
ambridge, Ontario

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