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Comments on the B.C. Law Reform Commission’s working paper on debt collection and collection agencies

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The B.C. Civil Liberties Association has not had the opportunity to study the Law Reform Commission’s Working Paper on Debt Collection and Collection Agents with the degree of attention to detail which it clearly merits. We are very happy, however, to share with you some of our first impressions.

To begin with, the Commission is to be congratulated for its clear and forcefully argued recommendations that, if implemented, would surely constitute a very substantial improvement over existing law. The Commission rightly appears to us to have kept its eye very steadily focused on first principles and the proposals derived from these principles should offer greater legal protection to debtors from intimidation and harassment by creditors, while at the same time protecting the legitimate claims and interests of creditors.

We note that especially in Part III (e.g., section 86), the Commission advances its recommendations very tentatively. In virtually every case we are happy with the direction taken by the recommendation and we would encourage the Commission to be less hesitant about urging its recommendations in its final report.

The Commission is surely right when it says that it is no objection to its proposals that they may have the consequence of prompting creditors to earlier legal action if the opportunities for extra-legal coercion, which of its very nature invites abuse, that it reduces recourse to coercive measures applied through the instruments made available by the law, which exists for the very purpose of determining the rightful claims of each party. The inconvenience to the creditor of the resort to law cannot be allowed to outweigh the rightful claim of the debtor to protection from practices that invite abuse.

In section 99, the Commission entertains as a possibility the prohibition of telephone collections. We urge the Commission to give further reflection to this possibility. We admit that the prohibition would certainly increase the inconvenience of debt collection. On the other hand, as the Commission itself notes, it is very difficult to establish a case of harassment when it involves telephone collection. Unless some fairly strong control is placed on telephone collection, the effect of the other strong controls, particularly on written letters, would be undermined, since it would then be in the interest of the collection agent to place a greater reliance on telephone collections over other forms. It may be that the danger is not sufficient to warrant restrictions quite so drastic but we would encourage further exploration of the suggestion.