Credit Business Practices (Trust and Loan Companies, Retail Associations, Canadian Insurance Companies and Foreign Insurance Companies) Regulations (SOR/2009-257)

Interpretation

1 The following definitions apply in these Regulations.

borrower

borrower means a person who holds a credit card or has applied to an institution to become a holder of a credit card. (emprunteur)

credit agreement

credit agreement includes an agreement for a line of credit, a credit card or any kind of loan. (convention de crédit)

credit card

credit card means a credit card issued to a natural person other than for business purposes. (carte de crédit)

debtor

debtor means a natural person who has entered into a credit agreement with an institution other than for business purposes and who owes a debt to that institution. (débiteur)

institution

institution means any of the following:

• (a) [Repealed, SOR/2021-181, s. 106]

• (b) [Repealed, SOR/2021-181, s. 106]

• (c) a retail association, as defined in section 2 of the Cooperative Credit Associations Act;

• (d) a company, as defined in subsection 2(1) of the Insurance Companies Act;

• (e) a foreign company, as defined in subsection 2(1) of the Insurance Companies Act;

• (f) a company, as defined in section 2 of the Trust and Loan Companies Act. (institution)

Application

2 These Regulations apply to institutions, to the affiliates that they control and to the agents and representatives of those institutions and affiliates.

Minimum Grace Period for New Purchases

• 3 (1) A statement of account in respect of a billing cycle for a credit card must be sent by an institution to the borrower after the last day of that billing cycle.

• (2) An institution may not require a minimum payment in respect of the outstanding balance owing on a credit card account for a particular billing cycle to be made by the borrower on a day earlier than 21 days after the last day of that billing cycle.

• (3) If the due date for a minimum payment in respect of the outstanding balance owing on a credit card account falls on a Saturday or a holiday, the institution must consider a payment made on the next business day as being made on time.

• (4) An institution may not charge interest on purchases of goods or services made on a credit card during a particular billing cycle if the borrower pays the outstanding balance owing on the credit card account in full on or before the due date.

Allocation of Payments

• 4 (1) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the institution must allocate any payment made by the borrower that is greater than the required minimum payment for that billing cycle among those amounts using one of the following methods:

  • (a) by allocating that payment first to the amount with the highest interest rate and then allocating any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates; or

  • (b) by allocating that payment among those amounts in the same proportion as each amount bears to the outstanding balance owing on the credit card account.

• (2) For the purpose of paragraph (1)(b), if the payment that the institution allocates to an amount owing on a credit card account contains a fraction of a dollar, the institution may round up that amount to the nearest dollar if the fraction of the dollar is equal to or more than 50 cents, round down that amount to the nearest dollar if the fraction is less than 50 cents and, if necessary, make corresponding adjustments to the other amounts that are being allocated.

Over-the-limit Fees Due to Holds

• 5 (1) Subject to subsection (2), an institution may not charge a borrower an amount for surpassing their credit limit as a result of a hold on their credit card.

• (2) Subsection (1) does not apply if the borrower would, in any case, have surpassed the credit limit during the period in which the hold was in effect.

Consent for Increases in Credit Limits and to Provide Credit Card Cheques to Borrower

• 6 (1) An institution may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent to do so.

• (2) If the borrower’s consent to the increase is given orally, the institution must, not later than the date of the first statement of account that is provided after the date of that consent, provide confirmation of that consent to the borrower in writing, in paper or electronic form.

• (3) [Repealed, SOR/2012-188, s. 1]

• 6.1 (1) An institution must not provide credit card cheques to a borrower issued on a credit card account without first obtaining the borrower’s express consent to do so.

• (2) If the borrower’s consent to receive credit card cheques is given orally, the institution must, not later than the date of the first statement of account that is provided after the date of that consent, provide confirmation of that consent to the borrower in writing, in paper or electronic form.

6.2 The use of any service related to the credit card account by the borrower, including the simple use of the credit card, does not constitute express consent for the purpose of sections 6 and 6.1.

Debt Collection Practices

• 7 (1) 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.

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

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

  • (b) the use of undue pressure; or

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

• (3) 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, neighbour, 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.

• (4) If the consent referred to in paragraph (3)(b) is given orally by the debtor, the institution must provide confirmation of that consent to the debtor in writing, in paper or electronic form.

• (5) 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.

• (6) 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.

• (7) 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, neighbour, 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; 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.

• (8) 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.

• (9) 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.

• (10) 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.

• (11) 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) [Repealed, SOR/2021-181, s. 107]

  • (b) [Repealed, SOR/2021-181, s. 107]

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

  • (d) Cost of Borrowing (Retail Associations) Regulations;

  • (e) Cost of Borrowing (Canadian Insurance Companies) Regulations; and

  • (f) Cost of Borrowing (Foreign Insurance Companies) Regulations.

• (12) 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.

• (13) 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.

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

Coming into Force

• 8 (1) These Regulations, except sections 3 and 4, come into force on January 1, 2010.

• (2) Sections 3 and 4 come into force on September 1, 2010.