Consumer protection act nova scotia

Consumer Protection Act Regulations

made under Section 33 of the

Consumer Protection Act

R.S.N.S. 1989, c. 92

O.I.C. 2000-464 (effective September 20, 2000), N.S. Reg. 160/2000

as amended to O.I.C. 2018-119 (effective April 24, 2018), N.S. Reg. 72/2018

Table of Contents

Please note: this table of contents is provided for convenience of reference and does not form part of the regulations.
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Citation

Agent of lender required to hold permit

Application

Bond

Suspension or cancellation of permit

Duties of agent

Cost of borrowing

Variable rate credit disclosure

Variable credit initial disclosure

Demand note disclosure

Change in rate statement requirements

Annual statement for variable rate loans

Bond forfeiture provisions

Advertising

Form A - Variable Rate Fixed Term Loan

Form B - Variable Rate Demand Loan (No Fixed Term)

Schedule of Costs of Borrowing

Form C - Fixed Rate Demand Loan (No Fixed Term)

Schedule of Costs of Borrowing

Form D - Business Permit Application

Citation

1 These regulations may be cited as the Consumer Protection Act Regulations.

Agent of lender required to hold permit

2 Every person who

(a) carries on the business of providing services or goods to a borrower to assist the borrower in obtaining an extension of credit from a lender; or

(b) holds himself or herself out to be a person as described in clause (a),

is deemed to be an agent of a lender for the purposes of the Act and these regulations and is required to hold a valid permit under the Act.

Application

3 (1) A person may apply for a permit as a lender or an agent under the Act by submitting to the Registrar

(a) an application in Form D;

(b) a fee of $133.35;

(c) samples of the forms of any of the following documentation that the lender proposes to use:

(i) credit agreements,

(ii) credit application forms,

(iii) where variable credit is to be extended, the borrower’s periodic statement,

(iv) where variable rate consumer loans are to be extended, the borrower's annual statement,

(v) the form to be provided to the borrower containing the information required by Section 12;

(d) such other additional information that the Registrar considers appropriate in the circumstances.

(2) The Registrar shall advise an applicant in writing of any defects in the forms submitted pursuant to clause (1)(c), and the applicant may amend and resubmit the forms.

4 The terms and conditions of a permit shall include

(a) use by the applicant of only those forms approved by the Registrar;

(b) compliance by the applicant with other relevant legislation, including but not limited to the Consumer Reporting Act; and

(c) if the applicant is a corporation, incorporation under the laws of the Province, Canada or a province of Canada.

Bond

5 (1) The Registrar may require a lender or agent to deliver a surety bond in an amount of $25 000.00 as a condition of a permit.

(2) A surety bond required by subsection (1) shall be a penal bond acquired through a registered surety company approved by the Registrar.

(3) Where a bond delivered pursuant to this Section is forfeited pursuant to Section 21, the amount due and owing as a debt to Her Majesty by the person bound thereby shall be determined as if Her Majesty suffered such loss or damage as would entitle Her Majesty to the maximum amount of the liability prescribed by the bond.

Suspension or cancellation of permit

6 (1) Before the Registrar

(a) refuses to issue a permit to an applicant;

(b) cancels the permit of a lender or agent; or

(c) suspends the permit of a lender or agent for a period of more than 12 days,

the Registrar shall fix a time and place for a hearing, and not less than 15 days before the date so fixed for the hearing, the Registrar shall give the applicant, lender or agent written notice of the hearing.

(2) A notice of hearing under subsection (1) shall set forth the time and place fixed for the hearing and the particulars of the complaints or the alleged violations of the Act or these regulations in sufficient detail to enable the applicant, lender or agent to make a full answer, reply or defence.

(3) An applicant, lender or agent may be represented by counsel at the hearing, call evidence on behalf of the applicant, lender or agent and cross examine under oath any witness giving evidence against the applicant, lender or agent.

(4) The Registrar shall give a written copy of the decision to the applicant, lender or agent within 30 days of the conclusion of the hearing.

(5) A notice of hearing under subsection (1) and a written decision of the Registrar under subsection (4) shall be

(a) given by registered mail addressed to

(i) the applicant, lender or agent at the permanent place of business stated in the applicant's application form or on the lender's or agent's permit, or

(ii) the recognized agent of the applicant, lender or agent within the Province; or

(b) delivered by personal service.

7 Upon receipt of the notification referred to in subsection 6(4), a lender or agent whose permit has been suspended or cancelled shall immediately return the lender's or agent's permit to the Registrar.

8 Despite the cancellation or suspension of a lender's or agent's permit, the lender or agent may collect the lender's or agent's accounts receivable and for that purpose may extend the time of payment, take and give up security and otherwise deal with borrowers and credit transactions, the contracts for which were entered into before the cancellation or suspension of the lender's or agent's permit, provided no new credit is extended to a borrower.

Duties of agent

9 (1) No agent shall require or accept any payment or any security for a payment, directly or indirectly, for whatever reason, from or on behalf of a borrower in respect of a loan of money until the borrower has actually received the loan.

(2) Every arrangement by which an agent takes payment, consideration or a security in contravention of subsection (1) is void.

10 Before providing services or goods to a borrower to assist the borrower in obtaining a loan of money from a lender, an agent shall provide the borrower with a clear statement in writing showing

(a) the name, address, and telephone number of the agent;

(b) the name and address of the borrower;

(c) the names and addresses of the lenders from whom the agent will attempt to obtain the loan on behalf of the borrower;

(d) the amount of the loan;

(e) the date by which the loan will be made to the borrower; and

(f) the amount that the agent will charge the borrower for consulting, negotiating, or arranging the loan expressed as a sum in dollars and cents and as a percentage of the amount of the loan.

Cost of borrowing

11 For the purposes of clause 17(1)(h) and subclause 17(3)(a)(i) of the Act, a lender shall disclose the percentage rate for each period during the term of credit that, when multiplied by the principal amount of the credit outstanding at the end of the period, produces an amount the total of which is equal to the cost of borrowing in relation to the cost expressed as a rate per annum.

12 The annual percentage rate of interest calculated and disclosed by a lender to a borrower shall be accurate to within one-eighth of one percent.

13 The cost of borrowing in respect of a period shall be calculated by multiplying the portion of the annual percentage rate that the period is of 1 year by the principal amount that is outstanding at the end of the period.

14 (1) Subject to subsection (2), where a prepayment is made, the cost of borrowing of the amount of principal prepaid shall be calculated by multiplying the amount prepaid by the number of days that have elapsed since the date of the last payment or the date of the extension of credit, as the case may be, and the annual percentage rate and dividing the figure obtained by 365.

(2) Any payment in respect of credit shall be applied first to pay the accumulated cost of borrowing of the principal amount of the loan and thereafter to reduce the principal amount of the loan.

(3) Where a prepayment is made, the prepayment shall be applied first to pay the accumulated cost of borrowing of the principal amount of the credit extended and thereafter to reduce the principal amount of the loan.

Variable rate credit disclosure

15 For the purposes of subsection 17(1) of the Act, where a lender and borrower agree that an extension of credit is subject to variations in the annual percentage rate, the lender shall disclose to the borrower,

(a) pursuant to clause 17(1)(h) of the Act, the percentage that the cost of borrowing bears to the principal amount of the credit, based on the rate prevailing on the transaction date;

(b) pursuant to clause 17(1)(g) of the Act, the cost of borrowing based on the rate prevailing on the transaction date;

(c) that the rate is subject to variation, the basis on which it shall vary and that this variation will affect the cost of borrowing disclosed in the statement; and

(d) on a separate statement, the information specified in Form A.

Variable credit initial disclosure

16 In addition to the requirements of subsection 17(3) of the Act, where a lender extends variable credit to a borrower, the lender shall disclose to the borrower, before extending the credit, a clear statement in writing setting forth

(a) the term of each period for which a statement of account is furnished;

(b) the amount in dollars and cents, of any service, transaction, or activity charge and the manner in which it is calculated;

(c) the manner, if any, in which the borrower may discharge his or her obligations without incurring any cost of borrowing;

(d) where a credit card is issued, the maximum liability of the borrower in the event the card is lost or stolen; and

(e) the manner in which the cost of borrowing is calculated.

Demand note disclosure

17 (1) Where a lender extends credit to a person in the circumstances to which subsection 17(6) of the Act applies and the lender and borrower agree that the extension of credit is subject to variations in the annual percentage rate, the lender shall disclose to the borrower in a separate statement the information specified in Form B.

(2) Where a lender extends credit to a person in the circumstances to which subsection 17(6) of the Act applies and the lender and borrower agree that the extension of credit is subject to a fixed annual percentage rate, the lender shall disclose to the borrower in a separate statement the information specified in Form C.

Change in rate statement requirements

18 The statement referred to in subsection 17(2) of the Act shall contain the following information:

(a) the revised rate;

(b) the effective date of the revision; and

(c) any modifications to the term or monthly payment resulting from the change in rate.

19 The notification referred to in subsection 17(4) of the Act shall contain the following information:

(a) the revised rate; and

(b) the effective date of the revision.

Annual statement for variable rate loans

20 Where an extension of credit referred to in subsection 17(1) of the Act is subject to variations in the annual percentage rate, the lender shall annually issue to the borrower a written statement showing

(a) the number of payments made during the year;

(b) the total dollar amount of the payments made during the year;

(c) the amount of principal repaid;

(d) the amount applied to the cost of borrowing; and

(e) the amount of principal outstanding.

Bond forfeiture provisions

21 A bond delivered pursuant to these regulations shall be forfeited upon the demand of the Registrar where

(a) the person in respect of whose conduct the bond is conditioned or any representative, agent, officer, servant or employee of that person has been convicted of

(i) an offence under the Act or these regulations, or

(ii) an offence under the Criminal Code (Canada) involving fraud or theft or conspiracy to commit an offence involving fraud or theft;

(b) a judgment arising from a court proceeding in respect of a claim arising out of a credit transaction has been given against the person in respect of whose conduct the bond is conditioned or against any representative, agent, officer, servant or employee of that person;

(c) the person in respect of whose conduct the bond is conditioned commits an act of bankruptcy, whether or not proceedings have been taken under the Bankruptcy Act (Canada); or

(d) a decision has been rendered by the Registrar stating in effect that after consideration and investigation of a complaint, the Registrar is satisfied that the person in respect of whose conduct the bond is conditioned or any representative, agent, officer, servant or employee of that person

(i) has violated the Act or these regulations, or has failed to comply with any of the terms, conditions or restrictions to which the person's permit is subject, or is in breach of any contract to which the Act and these regulations apply, or

(ii) has departed from Nova Scotia, or been out of Nova Scotia and remains out of Nova Scotia, or in the case of a body corporate, that its name has been stricken from the record of bodies corporate maintained by the Registrar of Joint Stock Companies,

and the conviction, judgment, order or decision has become final by reason of lapse of time or having been confirmed by the highest court to which any appeal may be taken.

22 The Registrar may assign any bond forfeited under the Act or these regulations, or may pay over any money recovered under it or recovered from the sale of any collateral security, to

(a) any person, or to the Public Trustee in trust for the person, who may become entitled to it in respect of a credit transaction with the person named in the bond;

(b) any representative, agent, officer, servant or employee of the person entitled pursuant to clause (a),

(c) judgment creditors of the person bonded; or

(d) any trustee, custodian, interim receiver or liquidator of the judgment creditors referred to in clause (c),

and any assignment or payment made pursuant to this Section shall be in accordance with and upon conditions set forth by Order of the Governor in Council.

23 A bond may be terminated by any person bound by it by giving to the Registrar and the principal named in the bond at least 2 months notice in writing of intention to terminate, and the bond shall be deemed to be terminated on the date stated in the notice or 2 months after receipt by the Registrar of the notice, whichever is the latest date.

24 For the purpose of every act or omission occurring

(a) during the period in which a permit is in force; or

(b) during the period prior to the termination of the bond pursuant to these regulations,

every bond shall continue in force and any collateral security shall remain on deposit for a period of 3 years following the cancellation of the permit or the termination of the bond, as the case may be.

25 Where a bond has been forfeited and the Registrar has not received notice in writing of any claim against the proceeds of the bond or such part as remains in the Registrar's hands within 3 years of the forfeiture, the Registrar may pay the proceeds of the bond or the collateral security, or any part remaining, to any person who made a payment under the bond or who deposited the collateral security, after first deducting the amount of any expenses incurred in connection with any investigation or otherwise relating to the lender or agent in respect of whose conduct the bond was conditioned.

26 Where a bond in place pursuant to these regulations is terminated, the permit of the lender or agent shall automatically be cancelled and shall remain cancelled until the lender or agent delivers to the Registrar a new bond in the amount and form required by the Registrar.

Advertising

27 A lender may disclose cost of borrowing information in addition to the information required by the Act and regulations if the additional information is not stated, utilized or placed so as to contradict, obscure or distract attention from the information required to be disclosed.

28 In a representation referred to in subsection 20(1) of the Act, where the lender offers the option of a reduced interest rate or cash rebate, the cash rebate forms part of the cost of borrowing and, therefore, shall be reflected in the interest rate and disclosed in accordance with Section 17 of the Act.

29 In a representation made by a lender of the type referred to in subsection 20(1) of the Act,

(a) where the annual percentage rate contained in a print advertisement will only be available to the borrower for part of the anticipated term of the credit agreement, the period of time that the advertised rate will be in effect shall be included in the advertisement in print of a size that can be easily read; and

(b) where the annual percentage rate contained in a radio or television advertisement will only be available to the borrower for part of the anticipated term of the credit agreement, the period of time that the advertised rate will be in effect shall be given equal prominence in the script, in the case of radio, with the rate referred to in the advertisement and, in the case of a television advertisement, the information required by this Section shall remain on the screen for a period long enough to be easily read.

30 In a representation made by a lender of the type referred to in subsection 20(2) of the Act, the lender shall also disclose the total amount to be repaid.

31 In a representation referred to in subsection 20(2) of the Act and Section 30,

(a) the relevant terms of the credit transaction disclosed in any television advertising shall remain on the screen for a period of time sufficient to enable the viewer to read the information in its entirety and in a size of print that can easily be read; and

(b) the relevant terms of the credit transaction disclosed in any print advertisement shall be of a size that can be easily read.

Form A - Variable Rate Fixed Term Loan

Date

Customer's name

Account number

1. Present balance or amount borrowed

2. Additional funds

3. Official fees

4. Insurance (optional)

5. Principal amount of loan

(1 + 2 + 3 + 4) or

(1 + 3 + 4)

6. *Cost of borrowing

interest in dollars and cents

other fees

7. **Prevailing annual rate

8. Payment $

x

number of months

9. Total amount to be repaid

* The cost of borrowing, as stated here, is the difference between the amount to be repaid and the principal amount and is based upon the assumption that the payments required to be made by the borrower are made as they become due.

** The annual rate indicated above is the rate prevailing on the transaction date. The rate is subject to change in accordance with the policy of the lender (as stated on the loan document). Changes in the rate will result in changes in the cost of borrowing and amount to be repaid.

Form B - Variable Rate Demand Loan (No Fixed Term)

Date

Customer's name

Account number

1. Present balance

2. Additional funds

3. Principal amount (1 + 2)

4 *Prevailing annual rate

5 **Cost of borrowing (see examples below)

Schedule of Costs of Borrowing

Principal amount Annual interest rate in dollars and cents

outstanding ($) over a 12-month period at various rates

***

15%16%17%

1000 180.00 192.00 204.00

2000 360.00 384.00 408.00

3000 540.00 576.00 612.00

4000 720.00 768.00 816.00

5000 900.00 960.00 1020.00

* The annual rate indicated above is the rate prevailing on the transaction date. The rate is subject to change in accordance with the policy of the lender (as stated on the loan document).

** Whereas no specific payment amount or time for repayment is specified at the time this loan is extended, the cost of borrowing shown above has been disclosed in dollars and cents for 1 year (for purpose of example only) at various rates.

*** The rate of interest in the centre column represents the rate prevailing on the transaction date.

Form C - Fixed Rate Demand Loan (No Fixed Term)

Date

Customer's name

Account number

1. Present balance

2. Additional funds

3. Principal amount (1 + 2)

4. Annual rate

5. *Cost of borrowing (see examples below)

Schedule of Costs of Borrowing

Principal amount Cost of borrowing in dollars and

outstanding ($) cents over a 12-month period

1000

2000

3000

4000

5000

* Whereas no specific time for repayment and/or repayment amount is specified at the time this loan is extended, the cost of borrowing shown has been disclosed in dollars and cents for 1 year on various loan amounts, based on the annual rate of this credit transaction.

Form D - Business Permit Application

Business name:

(operating name )

Revenue Canada BN # : N.S. Registry of Joint Stock Companies # :

Civic address (not P.O. box) :

Street # Street name Unit/Suite/Apt #

City/Town/County Province Country

Postal code

Business mailing address (if different) :

Street, P.O. Box, RR #, Site #, etc.

City/Town/County Province Country

Postal code

Contact information :

Primary phone # Fax #

Please check the appropriate item(s)

For the following 7 questions, please respond for either the individual applicant or each partner (in the case of a partnership applicant), or each officer/director (in the case of a Corporation applicant). Please use the addendum if additional space is required.

1. Name and address of institution housing the applicant's trust account (if applicable)

2. Has the applicant been involved in a personal or corporate bankruptcy?

No Yes

If yes, give full particulars:

3. Does the applicant have any unpaid judgments outstanding?

No Yes

If yes, give full particulars:

4. Has the applicant previously held a permit? No Yes

If yes, give full particulars:

5. Has the applicant ever had any permit refused, suspended or revoked?

No Yes

If yes, give full particulars:

6. Has the applicant ever been convicted of an offence under the law and not been pardoned or been disciplined by a professional/occupational organization?

No Yes

If yes, give full particulars:

7. Will the applicant be employed in any other business or profession?

No Yes

If yes, give full particulars:

8. List all corporation officers, partners of a partnership, or applicants. Include principal contact for permit correspondence.

9. Employment history of the applicant, branch manager, each partner (in the case of a partnership), and each officer/director (in the case of a corporation):

The undersigned hereby confirms the information presented to be correct to the best of his/her knowledge, agrees to abide by the Acts and Regulations governing the permit being applied for, and authorizes the Nova Scotia Department of Business and Consumer Services to verify the information given or supplied as part of this application with the appropriate sources.

Authorized signature:

Signature of applicant/authorized officer Date of application

Name of applicant/authorized officer (please print) Title

Addendum: Please include additional information as required

Legislative History
Reference Tables

Source Law

The current consolidation of the Consumer Protection Act Regulations made under the Consumer Protection Act includes all of the following regulations:

The following regulations are not yet in force and are not included in the current consolidation:

*See subsection 3(6) of the Regulations Act for rules about in force dates of regulations.

Amendments by Provision

Note that changes to headings are not included in the above table.

Editorial Notes and Corrections:

Repealed and Superseded:

Note: Only regulations that are specifically repealed and replaced appear in this table. It may not reflect the entire history of regulations on this subject matter.