Some collection agencies in Canada said Monday they are not happy that legislative reform has grouped them in with unscrupulous out-of-province debt-reduction companies.

Legislation would limit collector contact of debtors to three calls in seven days. Penalties against offending collectors would increase to $25,000 from $1,000 for individuals and to $300,000 from $10,000 for businesses. All debt-reduction companies would require a license to operate in the province.

The proposed legislation limits the ability of legitimate collection agencies to operate effectively, says Rodger D. Noel, president of Credifax Atlantic Ltd., based in Dartmouth, Nova Scotia.

“It is beyond consideration that the province would include our regulated industry with a bunch of unregulated scammers, schemers and fraudsters," he told The Chronicle Herald in Halifax, Nova Scotia.

Restrictions on contacting debtors would curb the effectiveness of collections in the commercial sector, and the proposed fines for violators are excessive and were determined without consulting the collection industry, he added.

“We operate mostly in the commercial sector in a business-to-business environment, and the legislation reflects a lack of consultation with business as it makes no distinction between the commercial and consumer sectors, "Noel says.

Noel said the province seems set on the approach of regulating the out-of-province debt-reduction operators through the Collection Agencies Act. The unregulated debt-reduction companies have raised their profile in the province in recent years and publicity over shady practices has intensified.

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