2000 Legislative Session: 4th Session, 36th Parliament
THIRD READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


Certified correct as passed Third Reading on the 15th day of June, 2000
Ian D. Izard, Law Clerk


HONOURABLE ANDREW PETTER
ATTORNEY GENERAL AND MINISTER
RESPONSIBLE FOR HUMAN RIGHTS

BILL 22 2000

COST OF CONSUMER CREDIT DISCLOSURE ACT

Contents

Section
Part 1 Interpretation and Application
  Division 1 Interpretation
  1  Definitions
  Division 2 Application
  2  Definitions
  3  Application of this Act
  4  Provision of credit to which this Act does not apply
Part 2 Rights and Duties in Relation to All Credit Agreements
  Division 1 Disclosure Requirements Applicable to All Credit Agreement Arrangements
  5  Definitions
  6  Disclosure statements must be delivered
  7  Disclosure in advertisements
  8  Form of disclosure statements and statements of account
  9  Delivery of documents to multiple borrowers
  10  Estimates and assumptions
  11  Inconsistency between disclosure statement and credit agreement
  Division 2 Rights and Obligations of Borrowers and Credit Grantors
  12  Borrowers may choose insurer
  13  Borrowers entitled to mortgage discharge
  14  Borrowers may cancel optional services
  15  Prepayment of credit
  16  Default charges
  17  Invitation to defer payment
  18  Acceleration clauses
  Division 3 Credit Arranged by Loan Brokers
  19  Non-business credit grantors
  20  Business credit grantors
Part 3 Fixed Credit
  Division 1 Application
  21  Application of this Part
  22  Credit sales
  Division 2 Advertising Requirements Applicable to Fixed Credit
  23  Advertising for fixed credit
  24  Advertising interest-free periods
  Division 3 Disclosure Required in Relation to Fixed Credit
  25  Initial disclosure statements for fixed credit
  26  Disclosure regarding changes in interest rate
  27  Disclosure regarding increases in outstanding principal
  28  Disclosure regarding amendments
  29  Disclosure regarding mortgage loan renewals
  30  Disclosure regarding non-mortgage renewals
Part 4 Open Credit
  Division 1 Application
  31  Application of this Part
  Division 2 Advertising Requirements Applicable to Open Credit
  32  Advertising for open credit
  33  Advertising interest-free periods
  Division 3 Disclosure Required in Relation to Open Credit
  34  Initial disclosure statements for open credit
  35  Statements of account
  36  Description of transactions
  Division 4 Credit Cards
  37  Definitions
  38  Credit cards may be issued only on application
  39  Applications for credit cards
  40  Additional disclosure for credit cards
  41  Limitation of cardholder's liability
Part 5 Leases of Goods
  42  Definitions
  43  Application of this Part
  44  Advertising requirements applicable to leases
  45  Disclosure required in relation to leases
  46  Maximum liability under residual obligation leases
Part 6 Compliance and Offences
  47  Definitions
  48  Refund of overpayment
  49  Credit grantors must compensate borrowers for contravention
  50  Offences and enforcement
  51  Statutory damages
  52  Exemplary damages
  53  Assignee
  54  Other remedies
  55  Conflicts
Part 7 Regulations and Transitional Provisions
  56  Power to make regulations
  57  Transitional
  58 - 78  Consequential Amendments
  79  Commencement

 

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 Interpretation and Application

Division 1 Interpretation

Definitions

1 (1) In this Act:

"advance" means value received, within the meaning of subsection (2), by the borrower;

"APR" means the annual percentage rate calculated in accordance with the regulations;

"associate", if used to indicate a relationship with a person, means

(a) a spouse, parent, child, sibling or business partner of the person, or

(b) a corporation of which a sufficient number of shares to elect a majority of the corporation's directors is beneficially owned, directly or indirectly, by

(i) the person,

(ii) one or more associates of the other person, or

(iii) the person and one or more associates of the person;

"borrower" means an individual who has entered into, or who is negotiating to enter into, a credit agreement if that individual, under that agreement, receives or is to receive credit from another party to the agreement, but does not include a guarantor;

"brokerage fee" means an amount that a borrower pays or agrees to pay to a loan broker in consideration of the loan broker's services in arranging, negotiating or facilitating or attempting to arrange, negotiate or facilitate the granting of credit to the borrower, and includes an amount that is

(a) deducted from the amount of credit that is extended to the borrower under the credit agreement, and

(b) paid to the loan broker by the credit grantor;

"business day", in relation to a credit grantor, means a day on which the credit grantor is open for business;

"cash customer" means a person who buys a product and who provides full payment for the product at or before the time of its receipt;

"cash price", in relation to a product, means,

(a) for a sale to a borrower by a credit grantor, or by an associate of the credit grantor, who sells the product to cash customers in the ordinary course of business,

(i) an amount that fairly represents the price for which the seller sells that product to cash customers, or

(ii) if the seller and the borrower agree on a lower price, that lower price,

(b) for a sale to which paragraph (a) does not apply, the price agreed on by the parties, or

(c) for an advertisement by a credit grantor or an associate of the credit grantor, the price at which the product is currently offered to cash customers or, if the credit grantor or associate of the credit grantor does not currently offer the product to cash customers, the price stated in the advertisement,

and, for the purpose of determining the amount advanced under a credit agreement, includes discounts, taxes and any other charges payable by a cash customer;

"court" means the Supreme Court or the Provincial Court;

"credit agreement" means an agreement under which credit is extended and includes

(a) an agreement in relation to

(i) a loan of money,

(ii) a credit sale,

(iii) a line of credit, or

(iv) a credit card, and

(b) a renewal of an agreement referred to in this definition;

"credit card" means a card or other device that can be used to obtain advances under a credit agreement for open credit;

"credit grantor" means, subject to section 56 (2) (b),

(a) a person who entered into, or who is negotiating to enter into, a credit agreement if that person, under that agreement, extends or is to extend credit to another party to the agreement, or

(b) if the rights of the person referred to in paragraph (a) under the credit agreement are assigned to an assignee, that assignee on notice of the assignment being given to the borrower,

and includes a credit card issuer within the meaning of section 37;

"credit sale" means a sale of a product in which the purchase is financed by the seller or manufacturer of the product or by an associate of the seller or manufacturer;

"default charge" means a charge imposed on a borrower who fails to make a payment as it comes due under a credit agreement or who fails to comply with any other obligation under a credit agreement, but does not include interest on an overdue payment;

"fixed credit" means credit under a credit agreement that is not for open credit;

"floating rate" means an interest rate that bears a specified mathematical relationship to an index rate, and includes an interest rate that

(a) is subject to a minimum or maximum rate, or

(b) is determined at the beginning of a period and applies throughout the period regardless of changes in the index rate during the period;

"grace period" means a period in which interest accrues but will be forgiven if the borrower satisfies conditions specified in the credit agreement;

"high-ratio mortgage" means a mortgage of real property under the security of which is advanced an amount that, when added to amounts advanced under mortgages ranking equally with or in priority to the mortgage, exceeds 75% of the value of the real property;

"index rate" means, in relation to a credit agreement, the rate that meets the criteria prescribed by the regulations;

"initial disclosure statement" means, in relation to a credit agreement or a lease, the disclosure statement that, under section 6, is required for that credit agreement or lease;

"interest" means charges that accrue over time and are determined by applying a rate to an amount that is owing from time to time under a credit agreement;

"interest-free period" means a period following the making of an advance during which interest does not accrue on the advance;

"lease" means any agreement for the hire of goods, except an agreement for the hire of goods in connection with a residential tenancy agreement;

"lessee" means an individual who entered into, or who is negotiating to enter into, a lease if that individual, under that lease, hires or is to hire goods from another party to the agreement;

"lessor" means a person who entered into, or who is negotiating to enter into, a lease if that person, under that lease, leases or is to lease goods to another party to the agreement;

"loan broker" means, subject to section 56 (2) (b), a person who, for compensation, arranges, negotiates or facilitates an extension of credit;

"mortgage loan" means a loan of money secured by an interest in real property, but does not include any such loan that is prescribed by the regulations;

"non-interest finance charge" means any charge that a borrower is required to pay in connection with a credit agreement, other than

(a) interest,

(b) a prepayment charge,

(c) a default charge,

(d) a charge for an optional service,

(e) a charge for a service referred to in subsection (2) (d), (e) or (f), or

(f) in the case of a credit sale, any charge that would also be payable by a cash customer;

"open credit" means credit under a credit agreement if the credit agreement

(a) anticipates multiple advances that are to be made when requested by the borrower in accordance with the agreement, and

(b) does not establish the total amount to be advanced to the borrower under the agreement, although it may impose a credit limit;

"optional service" means a service that is offered to a borrower in connection with a credit agreement and that the borrower does not have to accept in order to enter into the credit agreement;

"outstanding balance" means the total amount owing at any particular time under a credit agreement;

"payment" means value given, within the meaning of subsection (4), by a borrower;

"payment period" means one of the intervals into which the term of a credit agreement, or the term of a lease within the meaning of section 42 (1), is divided for the purpose of determining the amount of and timing of payments;

"periodic payment" means the payment that, under a credit agreement or a lease, is to be made in respect of each payment period established by that record;

"product" means goods, services or goods and services, but does not include the extension of credit;

"publish" means make public in any manner, including by or through any media;

"scheduled-payments credit agreement" means a credit agreement for fixed credit under which the amount advanced is to be repaid in accordance with a specified schedule of payments, which schedule of payments may be subject to adjustment to accommodate contingencies including changes in the interest rate;

"security interest" means any interest in property that secures the borrower's obligations under a credit agreement;

"spouse" means a person who

(a) is married to another person, or

(b) is living and cohabiting with another person in a marriage-like relationship, including a marriage-like relationship between persons of the same gender;

"term", other than in Part 5, means, in relation to the duration of a credit agreement, the period between the first advance and the end of the period in respect of which payments are required under the credit agreement;

"total cost of credit" means the difference between the value given or to be given, within the meaning of subsection (4), by the borrower in connection with a credit agreement and the value received or to be received, within the meaning of subsection (2), by the borrower in connection with the credit agreement, disregarding the possibility of prepayment or default.

(2) The following constitute value received or to be received by a borrower in connection with a credit agreement:

(a) money transferred or to be transferred by the credit grantor to the borrower or to the order of the borrower under the credit agreement;

(b) the cash price of a product purchased or to be purchased under the credit agreement;

(c) the amount of a pre-existing monetary obligation of the borrower that is paid, discharged or consolidated or is to be paid, discharged or consolidated by the credit grantor under the credit agreement;

(d) the amount of money obtained or to be obtained or the cash price of a product obtained or to be obtained through the use of a credit card obtained under the credit agreement;

(e) any of the following expenses, if the credit grantor incurred or is to incur the expense for the purpose of arranging, documenting, insuring or securing the credit agreement:

(i) fees to a third party to record or register a document or information in, or to obtain a document or information from, a public registry of interests in real or personal property;

(ii) fees for professional services required for the purpose of confirming the value, condition, conformity to law or location of property that serves as security for a credit agreement, if the borrower is given a report signed by the person providing the professional services and is free to give the report to third persons;

(iii) premiums for

(A) insurance that protects the credit grantor against default on a high-ratio mortgage,

(B) casualty insurance on the subject matter of a security interest, if the borrower is a beneficiary of the insurance and the insured amount is the full insurable value of the subject matter, and

(C) any insurance provided or paid for by the credit grantor in connection with a credit agreement if the insurance is optional;

(iv) an application fee for insurance referred to in subparagraph (iii) (A);

(f) service provided or to be provided by the credit grantor to maintain a tax account on a high-ratio mortgage, expressed in the amount of a reasonable fee charged for that service, whether the tax account is required in connection with the credit agreement or is requested by the borrower;

(g) any other thing prescribed for the purposes of this subsection.

(3) Despite subsection (2), the following do not constitute value received or to be received by a borrower in connection with a credit agreement unless they relate to an optional service, to an expense or service under subsection (2) (e) or (f), or to a thing prescribed for the purposes of subsection (2) (g) that is designated by regulation for the purposes of this subsection:

(a) money paid or to be paid, an expense incurred or to be incurred, or anything done or to be done by the credit grantor for the purpose of arranging, documenting, securing, administering or renewing the credit agreement;

(b) insurance provided or paid for or to be provided or paid for by the credit grantor in connection with the credit agreement;

(c) any other thing prescribed for the purposes of this subsection.

(4) The following constitute value given or to be given by a borrower in connection with a credit agreement:

(a) money transferred or to be transferred from the borrower to the credit grantor in connection with the credit agreement;

(b) money transferred or to be transferred from the borrower to a person other than the credit grantor in respect of a charge for services that the credit grantor requires the borrower to obtain or pay for in connection with the credit agreement, unless the charge

(i) is for an expense to which subsection (2) (e) or (g) would have applied if the expense had been incurred initially by the credit grantor and then charged directly to the borrower,

(ii) is for services provided by a lawyer chosen by the borrower, or

(iii) is for charges for shares in a credit union that a borrower must buy as a condition of entering into a credit agreement with the credit union;

(c) any other thing prescribed for the purposes of this subsection.

Division 2 Application

Definitions

2 In this Division:

"borrower" includes a lessee;

"credit agreement" includes a lease;

"credit grantor" includes a lessor.

Application of this Act

3 (1) Subject to section 4, this Act applies to a credit agreement if

(a) the borrower is an individual,

(b) the borrower enters into the credit agreement for primarily personal, family or household purposes, and

(c) the credit agreement

(i) is entered into by the credit grantor in the ordinary course of carrying on a business,

(ii) is arranged by a loan broker, or

(iii) is a credit agreement, or is of a class of credit agreements, prescribed by regulation.

(2) Any waiver or release by a person of the person's rights, benefits or protections under this Act or the regulations is void except to the extent that such waiver or release is expressly permitted by this Act.

Provision of credit to which this Act does not apply

4 This Act does not apply to

(a) a credit agreement that is a lease unless the lease

(i) is for a fixed term of 4 months or more,

(ii) is for an indefinite term or is renewed automatically until one of the parties takes positive steps to terminate it, or

(iii) is a residual obligation lease within the meaning of section 42 (1),

(b) a credit agreement if

(i) the credit grantor is provided with a statement, in the credit agreement or other document, to the effect that the borrower has entered into the credit agreement for primarily business purposes,

(ii) the statement is signed by the borrower, and

(iii) the credit grantor believes in good faith that the statement is true,

(c) a credit sale if

(i) the credit sale agreement requires that the full amount of the sale price for the product will be paid by a single payment within a specified period and does not provide for a schedule of interest payments, or of payments of both principal and interest, to apply if the sale price is not paid within that period,

(ii) the credit sale is unconditionally interest-free during the period referred to in subparagraph  (i),

(iii) the credit sale is unsecured, apart from any lien on the product that may arise by operation of law,

(iv) the credit sale is not assigned in the ordinary course of the credit grantor's business otherwise than as security, and

(v) the credit sale does not provide for any non-interest finance charges, or

(d) a credit agreement, or class of credit agreements, exempted by regulation.

Part 2 Rights and Duties in Relation to All Credit Agreements

Division 1 Disclosure Requirements Applicable to All Credit Agreement Arrangements

Definitions

5 In this Part:

"borrower" includes a lessee;

"credit agreement" includes a lease;

"credit grantor" includes a lessor.

Disclosure statements must be delivered

6 (1) Subject to subsection (2), a credit grantor who has entered into, or who is negotiating to enter into, a credit agreement with an individual who is the borrower in relation to that agreement must deliver to the borrower a disclosure statement in relation to the credit agreement before the earlier of

(a) the date on which the borrower enters into the credit agreement, and

(b) the date on which the borrower makes any payment in connection with the credit agreement.

(2) A credit grantor who has entered into, or who is negotiating to enter into, a credit agreement to provide a mortgage loan to an individual who is the borrower in relation to that agreement must, subject to subsection (3), deliver a disclosure statement in relation to the credit agreement to the borrower at least 2 business days before the earlier of

(a) the date on which the borrower incurs any obligation to the credit grantor in connection with the mortgage loan, other than an obligation in respect of an expense referred to in section 1 (2) (e) or an expense prescribed by regulations for the purposes of this section, and

(b) the date on which the borrower makes any payment to the credit grantor in connection with the mortgage loan, other than a payment in respect of an expense referred to in section 1 (2) (e) or an expense prescribed by regulations for the purposes of this section.

(3) The borrower under a credit agreement referred to in subsection (2) may waive the time period referred to in that subsection subject to and in accordance with any terms and conditions the Lieutenant Governor in Council may, by regulation, prescribe.

Disclosure in advertisements

7 If a credit grantor who publishes an advertisement or on whose behalf an advertisement is published is, as a result of disclosing certain information in the advertisement, required under this Act to include other information in the advertisement, the credit grantor must ensure that,

(a) if the information that is required to be included is the APR, the APR is disclosed at least as prominently as is the information that necessitated the inclusion of the APR, and

(b) any other information that is required to be included is disclosed in a conspicuous manner.

Form of disclosure statements and statements of account

8 (1) A credit grantor who is required to provide a disclosure statement or a statement of account under this Act must ensure that that record

(a) is

(i) in writing, or

(ii) in any other form, consented to by the borrower, that allows the borrower to retain the record for future reference,

(b) contains the information required under this Act, and

(c) expresses that information clearly, concisely, in a logical order and in a manner that is likely to bring the information to the borrower's attention.

(2) A disclosure statement or a statement of account may be a separate document or part of another document.

Delivery of documents to multiple borrowers

9 If there is more than one borrower under a credit agreement, a disclosure statement, notice or other document that, under this Act, is required to be delivered to the borrower may be delivered to any one of the borrowers, and it is unnecessary to deliver a separate disclosure statement, notice or other document to each borrower.

Estimates and assumptions

10 Information disclosed under this Act, whether in a disclosure statement or advertisement or otherwise, may be based on an estimate or assumption if

(a) the disclosure depends on information that is not ascertainable by the credit grantor at the time of disclosure, and

(b) the estimate or assumption is reasonable and is clearly identified in the document effecting the disclosure as an estimate or assumption.

Inconsistency between disclosure statement and credit agreement

11 If information in a disclosure statement is inconsistent with any information or provision set out in the credit agreement, the credit agreement is presumed to incorporate the information or provision that is more favourable to the borrower, unless it is proven that the less favourable information or provision reflects the borrower's actual understanding of the provisions of the agreement.

Division 2 Rights and Obligations of Borrowers and Credit Grantors

Borrowers may choose insurer

12 (1) A borrower who is required by a credit grantor to purchase insurance may purchase it from any insurer authorized to provide that type of insurance in British Columbia, except that the credit grantor may reserve the right to disapprove, on reasonable grounds, an insurer selected by the borrower.

(2) A credit grantor who offers to provide or to arrange insurance referred to in subsection (1) must, at the time of that offer, clearly disclose to the borrower in writing that the borrower may, subject to subsection (1), purchase the required insurance through an insurance agent and insurer of the borrower's choice.

Borrowers entitled to mortgage discharge

13 (1) Within 30 days after full repayment of a mortgage, the credit grantor must provide to the borrower a registrable discharge of the mortgage in the form and with the content satisfactory to the registrar appointed under the Land Title Act.

(2) A credit grantor must not charge or accept any amount for or in relation to the provision to the borrower of a discharge of mortgage under subsection (1).

Borrowers may cancel optional services

14 (1) A borrower may cancel an optional service of a continuing nature that is provided by the credit grantor or by an associate of the credit grantor by giving 30 days' notice, or such shorter period of notice as is provided for by the agreement under which the service is provided.

(2) A borrower who cancels an optional service in accordance with subsection (1)

(a) is not liable for charges relating to any portion of the service that has not been provided at the time of the effective date of the cancellation, and

(b) is entitled to a refund of any amount already paid for those charges.

Prepayment of credit

15 (1) This section does not apply to mortgage loans.

(2) A borrower is entitled to prepay the full outstanding balance owing under a credit agreement at any time without any prepayment charge or penalty.

(3) If a prepayment under subsection (2) is made in relation to a credit agreement for fixed credit, the credit grantor must refund or credit to the borrower the prescribed portion of any non-interest finance charges paid by the borrower or added to the outstanding balance.

(4) A borrower is entitled, on any scheduled payment date, or at least monthly, to prepay less than the full outstanding balance owing under a credit agreement for fixed credit, without any prepayment charge or penalty, but, in that event, is not entitled to a refund or credit of any non-interest finance charges.

Default charges

16 A credit grantor must not impose, by a credit agreement, any default charges other than the following:

(a) reasonable charges in respect of legal costs incurred in collecting or attempting to collect a payment;

(b) reasonable charges in respect of costs, including legal costs, incurred in realizing a security interest or protecting the subject matter of a security interest after default;

(c) reasonable charges that reflect costs incurred by the credit grantor because a cheque or other payment instrument given by the borrower to the credit grantor was dishonoured.

Invitation to defer payment

17 (1) If a credit grantor invites a borrower to defer making a payment that would otherwise be due under a credit agreement, the credit grantor must, in that invitation, clearly disclose whether or not interest will accrue on the unpaid amount during the period for which payment is deferred.

(2) If an invitation referred to in subsection (1) does not disclose whether or not interest will accrue on the unpaid amount during the period for which payment is deferred, the credit grantor is deemed to waive the interest that would otherwise accrue during that period.

Acceleration clauses

18 (1) A credit agreement may provide that, when the borrower is in default or in any other circumstance provided by the credit agreement, the credit grantor may accelerate payment by the borrower so as to require repayment of the whole amount outstanding under the credit agreement.

(2) Subject to subsection (4), if the credit agreement contains the provision referred to in subsection (1) and the credit grantor wishes, in a situation described in subsection (1), to accelerate payment by the borrower, the credit grantor must give written notice to the borrower of the credit grantor's intention to accelerate payment.

(3) The notice referred to in subsection (2) must

(a) be delivered personally to the borrower or be sent to the borrower by registered mail, and

(b) must contain

(i) a description of the default or other circumstances,

(ii) a statement of the amount required to satisfy the borrower's obligations and the applicable rate of interest, and

(iii) a statement that, unless the default or circumstances described have been remedied within 10 days after the notice was delivered or sent under paragraph (a) of this subsection, the whole amount outstanding under the credit agreement will be due and payable.

(4) The credit grantor must not accelerate payment under this section if

(a) the credit grantor fails to comply with subsections (2) and (3), or

(b) the default by the borrower is remedied within the period specified under subsection (3) (b) (iii).

(5) If there is a conflict between this section and a provision of any other Act, the provision of that other Act prevails.

Division 3 Credit Arranged by Loan Brokers

Non-business credit grantors

19 If a loan broker secures for a borrower an extension of credit from a credit grantor who does not provide credit in the ordinary course of carrying on business,

(a) the provisions of this Act and the regulations that impose a duty on a credit grantor must be read as imposing that duty on the loan broker rather than on the credit grantor, and

(b) if the borrower pays or is required to pay a brokerage fee, the loan broker must ensure that the initial disclosure statement for the credit agreement

(i) discloses the amount of the brokerage fee, and

(ii) accounts for the brokerage fee in the APR and the total cost of credit.

Business credit grantors

20 (1) If a loan broker secures for a borrower an extension of credit from a credit grantor who does provide credit in the ordinary course of carrying on business,

(a) if the credit grantor deducts a brokerage fee from the value received or to be received by the borrower within the meaning of section 1 (2) and (3), the credit grantor must ensure that the initial disclosure statement for the credit agreement

(i) discloses the amount of the brokerage fee, and

(ii) accounts for the brokerage fee in the APR and the total cost of credit, and

(b) if the loan broker takes a loan application from the borrower and forwards it to the credit grantor, the loan broker must give to the borrower

(i) a disclosure statement containing the information referred to in paragraph (a) of this subsection, and

(ii) any other information that, under this Act, is required to be disclosed in the initial disclosure statement for the credit agreement.

(2) If the loan broker gives the borrower a disclosure statement under subsection (1) (b), the credit grantor may

(a) adopt that disclosure statement as its own disclosure statement, in which case the credit grantor is jointly and severally liable with the loan broker for the contents of that statement, or

(b) elect to deliver to the borrower a separate disclosure statement containing the information that, under this Act, is required to be disclosed.

Part 3 Fixed Credit

Division 1 Application

Application of this Part

21 This Part applies only to credit agreements that extend fixed credit.

Credit sales

22 If this Part applies to a credit sale, the credit grantor must ensure that the credit agreement is a scheduled-payments credit agreement.

Division 2 Advertising Requirements Applicable to Fixed Credit

Advertising for fixed credit

23 (1) This section applies only to advertisements that

(a) offer credit to which this Part applies, and

(b) state the interest rate or amount of any payment.

(2) A credit grantor must ensure that every advertisement to which this section applies that is published by or on behalf of the credit grantor discloses, in relation to the proposed credit agreement,

(a) the APR, and

(b) the term.

(3) In addition to complying with subsection (2), the credit grantor to which that subsection applies must ensure that,

(a) if the advertisement is for a credit sale of a specifically identified product, the advertisement discloses the cash price of that product, or

(b) if the advertisement is for a credit sale of a specifically identified product in connection with which a non-interest finance charge is to be payable, the advertisement discloses

(i) the cash price of the product, and

(ii) the total cost of credit.

Advertising interest-free periods

24 (1) An advertisement that states or implies that no interest is payable for a certain period in respect of a transaction must disclose whether

(a) the transaction is unconditionally interest-free during the period, or

(b) interest accrues during the period but will be forgiven under certain conditions.

(2) If interest accrues during the period but will be forgiven under certain conditions, the advertisement must also disclose

(a) those conditions, and

(b) the APR that will apply to the period if those conditions are not met.

(3) An advertisement to which subsection (1) applies that does not disclose the information required under subsections (1) (b) and (2) is deemed to represent that the transaction is unconditionally interest-free during the relevant period.

Division 3 Disclosure Required in Relation to Fixed Credit

Initial disclosure statements for fixed credit

25 (1) A credit grantor who has entered into or who is negotiating to enter into a scheduled-payments credit agreement must ensure that the initial disclosure statement for that credit agreement discloses the following information:

(a) the effective date of the statement;

(b) for a credit sale, a description of the product;

(c) the outstanding balance after application of every payment made by the borrower on or before the effective date of the statement;

(d) the nature and amount of each advance, charge or payment accounted for in the outstanding balance disclosed under paragraph (c);

(e) the term of the agreement;

(f) the amortization period if it is longer than the term;

(g) the date on which interest begins to accrue and the details of any grace period;

(h) the annual interest rate and the circumstances under which unpaid interest will be compounded;

(i) if the annual interest rate may change during the term,

(i) the initial annual interest rate and the compounding period,

(ii) the method of determining the annual interest rate at any time, and

(iii) unless the amount of the scheduled payments is adjusted automatically to account for changes in the annual interest rate, the lowest annual interest rate, based on the initial outstanding balance, at which the payments would not cover the interest that would accrue between payments;

(j) the nature and amount of any charges, other than interest, that are not disclosed under paragraph (d) but that are payable or will become payable by the borrower in connection with the credit agreement;

(k) the amount and timing of any advances to be made after the effective date of the statement;

(l) the amount and timing of any payments to be made after the effective date of the statement;

(m) the total of all advances made or to be made in connection with the credit agreement;

(n) the total of all payments to be made in connection with the credit agreement;

(o) the total cost of credit;

(p) the APR;

(q) the nature of any default charges provided for by the credit agreement;

(r) a description of the subject matter of any security interest;

(s) for a mortgage loan, a statement of the conditions, if any, under which the borrower may make prepayments, and any charge for prepayment;

(t) for a credit agreement that does not relate to a mortgage loan, a statement that the borrower is entitled to prepay the full outstanding balance at any time without any prepayment charge or penalty and is entitled to make partial payments without penalty on any scheduled payment date or at least monthly;

(u) the nature, amount and timing of payments for any optional services purchased by the borrower for which payments are to be made to or through the credit grantor;

(v) the conditions under which the borrower may terminate services referred to in paragraph (u).

(2) A credit grantor who has entered into or who is negotiating to enter into a credit agreement that is not a scheduled-payments credit agreement must ensure that the initial disclosure statement for that credit agreement

(a) discloses the information referred to in subsection (1) (a) to (d), (g) to (j), (m) and (p) to (v), and

(b) does one of the following:

(i) discloses the circumstances in which the outstanding balance, or any portion of it, must be paid;

(ii) specifies the provisions of the credit agreement that describe those circumstances.

Disclosure regarding changes in interest rate

26 (1) In addition to the disclosure statement required under section 25, if the interest rate is a floating rate, the credit grantor must, at least once every 12 months, deliver to the borrower a disclosure statement that contains the following information:

(a) the period covered by the statement, which period must run from the date of the disclosure statement most recently delivered to the borrower under this section or section 25;

(b) the annual interest rate at the beginning and end of that period;

(c) the outstanding balance at the beginning and end of that period;

(d) for a scheduled-payments credit agreement, the amount and timing of all remaining payments, based on the annual interest rate that applies at the end of that period.

(2) In addition to the disclosure statement required under section 25, if the interest rate is not a floating rate but is nevertheless subject to change, the credit grantor must, within 30 days after the date on which the annual interest rate becomes 1% or more higher than the rate most recently disclosed to the borrower in writing, deliver to the borrower a disclosure statement that contains the following information:

(a) the date of the statement;

(b) the new annual interest rate and the date the new rate took effect;

(c) the new amount, and timing, of any payments to be made after the date referred to in paragraph (b).

Disclosure regarding increases in outstanding principal

27 (1) In addition to any other documents that the credit grantor must deliver under this Act to the borrower, the credit grantor must deliver to the borrower a notice in writing in accordance with subsection (2) of this subsection if

(a) the outstanding principal on a scheduled-payments credit agreement increases, as a result of

(i) the compounding of interest on a missed or late payment, or

(ii) the imposition of a default charge, and

(b) as a result of the increases in outstanding principal, the total amount of the payments the borrower is scheduled to make over a payment period does not cover the interest that will accrue during that payment period.

(2) A notice under subsection (1)

(a) must be delivered to the borrower, within 30 days after the most recently missed or late payment or default charge imposed, as the case may be, and

(b) must specify

(i) that the outstanding principal has increased, and why,

(ii) that, because of the increase in principal, the subsequent scheduled payments will not cover the interest that will accrue in each payment period, and

(iii) what the total outstanding balance will be at the end of the term if the amount of subsequent scheduled payments is not adjusted.

Disclosure regarding amendments

28 (1) Subject to subsection (3), if a credit agreement is amended, the credit grantor must deliver a supplementary disclosure statement to the borrower within 30 days after the amendment is made.

(2) The supplementary disclosure statement must set out the changed information but need not repeat any information that is unchanged from the previous disclosure statement.

(3) This section does not apply to changes effected by a renewal to which section 29 or 30 applies.

Disclosure regarding mortgage loan renewals

29 (1) If the amortization period for a mortgage loan under a scheduled-payments credit agreement is longer than the term of the mortgage, the credit grantor must notify the borrower in writing, at least 21 days before the end of the term, whether or not the credit grantor is willing to renew the mortgage for a further term.

(2) A credit grantor who is willing to renew a mortgage must include, with the notice referred to in subsection (1), a disclosure statement, based on the assumption that the borrower will make all payments that are due under the current mortgage, that includes the following information respecting the renewed mortgage:

(a) the effective date;

(b) the outstanding balance of the mortgage loan as of the effective date;

(c) any non-interest finance charges that are payable under or in connection with the renewed mortgage;

(d) the length of the term;

(e) the relevant interest rate information referred to in section 25 (1) (h) or (i);

(f) the APR;

(g) the amount and timing of all payments to be made under or in connection with the renewed mortgage;

(h) the total of all payments to be made under or in connection with the renewed mortgage;

(i) the total cost of credit;

(j) the amortization period;

(k) a statement of the conditions, if any, under which the borrower may make prepayments, and any charge for prepayment.

(3) In addition to any other legal, equitable or statutory remedy available to the borrower but subject to subsection (4), if a mortgage is to be renewed but the credit grantor does not, at least 21 days before the effective date of the renewed mortgage, deliver to the borrower a disclosure statement that reflects the terms of the renewed mortgage,

(a) the credit grantor must, on or before the effective date of the renewed mortgage, deliver to the borrower a disclosure statement that reflects the terms of the renewed mortgage,

(b) the borrower may, within 21 days after receiving the disclosure statement referred to in paragraph (a), pay the outstanding balance of the mortgage loan without penalty, and

(c) if the borrower pays the outstanding balance of the mortgage loan in accordance with paragraph (b), the credit grantor must refund to the borrower any non-interest finance charges imposed in connection with the renewal.

(4) Subsection (3) does not apply if

(a) a credit grantor delivers to the borrower a disclosure statement in relation to the renewed mortgage at least 21 days before the effective date of the renewed mortgage, and

(b) that statement does not reflect the terms of the renewed mortgage by reason only that

(i) the outstanding balance of the mortgage loan on the effective date of the renewed mortgage differs from what was stated in the disclosure statement because of one or more missed, late, early or extra payments,

(ii) the interest rate under the renewed mortgage is lower than the interest rate stated in the disclosure statement, or

(iii) the amortization period or frequency of payments under the renewed mortgage differs from what was stated in the disclosure statement.

(5) If subsection (4) applies, the credit grantor must, within 30 days after the effective date of the renewed mortgage, deliver to the borrower a revised disclosure statement that reflects the terms of the renewed mortgage.

Disclosure regarding non-mortgage renewals

30 When a credit agreement that extends fixed credit, other than a mortgage, is renewed, the credit grantor must deliver to the borrower on or before the renewal date a disclosure statement containing the information referred to in section 29 (2) (a) to (k).

Part 4 Open Credit

Division 1 Application

Application of this Part

31 This Part applies only to credit agreements that extend open credit.

Division 2 Advertising Requirements Applicable to Open Credit

Advertising for open credit

32 A credit grantor must ensure that every advertisement that is published by or on behalf of the credit grantor and that gives specific information about the cost of open credit must,

(a) if the open credit is not associated with a credit card, disclose the APR for the open credit, or

(b) if the open credit is associated with a credit card, disclose

(i) the current annual interest rate, and

(ii) any initial or periodic non-interest finance charges.

Advertising interest-free periods

33 (1) An advertisement that states or implies that no interest is payable for a certain period in respect of a transaction under a credit agreement must disclose whether

(a) the transaction is unconditionally interest-free during the period, or

(b) interest accrues during the period but will be forgiven under certain conditions.

(2) If interest accrues during the period but will be forgiven under certain conditions, the advertisement must also disclose

(a) those conditions, and

(b) the annual interest rate for the period, assuming those conditions are not met.

(3) An advertisement to which subsection (1) applies that does not disclose the information required under subsections (1) (b) and (2) is deemed to represent that the transaction is unconditionally interest-free during the relevant period.

Division 3 Disclosure Required in Relation to Open Credit

Initial disclosure statements for open credit

34 (1) Subject to subsection (2), a credit grantor who has entered into or who is negotiating to enter into a credit agreement must ensure that the initial disclosure statement for that credit agreement discloses the following information:

(a) the effective date of the statement;

(b) the credit limit;

(c) the minimum periodic payment or the method of determining the minimum periodic payment;

(d) the initial annual interest rate and the compounding period;

(e) if the annual interest rate may change, the method of determining the annual interest rate at any time;

(f) when interest begins to accrue on advances or different types of advances and information concerning any grace period;

(g) the nature of any non-interest finance charges that may become payable by the borrower under the credit agreement and the amount, or the method of determining the amount, of those charges;

(h) for open credit that is not associated with a credit card, the APR;

(i) any optional services purchased by the borrower that are payable to or through the credit grantor, the charges for those optional services and the conditions under which the borrower may terminate the services;

(j) a description of the subject matter of any security interest;

(k) the nature of any default charges provided for by the credit agreement;

(l) how often the borrower will receive statements of account;

(m) a telephone number in accordance with section 35 (3).

(2) Despite subsection (1),

(a) the credit limit referred to in subsection (1) (b) may be disclosed

(i) in the initial disclosure statement,

(ii) in the first statement of account delivered to the borrower, or

(iii) in a separate statement delivered to the borrower on or before the date on which the borrower receives the first statement of account, and

(b) the following information may be disclosed in a separate statement delivered to the borrower before the services are provided or the transaction occurs:

(i) information about the nature and amount of charges for any optional service referred to in subsection (1) (i);

(ii) information that relates to a specific transaction under the credit agreement.

Statements of account

35 (1) Subject to subsection (2), the credit grantor must deliver to the borrower, at least monthly, a statement of account that contains the following information:

(a) the period covered by the statement, which period must run from the date of the first advance or, if a statement of account has been delivered under this section, from the date of the statement of account most recently delivered to the borrower;

(b) the outstanding balance at the beginning of the statement period;

(c) the posting date, description and amount of each transaction or charge added to the outstanding balance during the statement period;

(d) the posting date, and amount of each payment or credit subtracted from the outstanding balance during the statement period;

(e) the annual interest rate or rates in effect during the statement period or any part of that period;

(f) the total of all amounts added to the outstanding balance during the statement period;

(g) the total of all amounts subtracted from the outstanding balance during the statement period;

(h) the outstanding balance at the end of the statement period;

(i) the credit limit;

(j) the minimum payment;

(k) the due date for payment;

(l) the amount that the borrower must pay on or before the due date in order to take advantage of a grace period;

(m) the borrower's rights and obligations regarding the correction of billing errors;

(n) a telephone number in accordance with subsection (3).

(2) A credit grantor is not required to send a statement of account to a borrower at the end of any period during which there has been no advance or payment if

(a) there is no outstanding balance at the end of the period, or

(b) the borrower is in default and the credit grantor has

(i) demanded payment of the outstanding balance, and

(ii) given notice to the borrower that the borrower's privileges to obtain advances under the agreement have been cancelled or suspended due to the default.

(3) The credit grantor must, for the purposes of section 34 (1) (m) and subsection (1) (n) of this section, provide a telephone number that the borrower can use to obtain information about the borrower's account during the credit grantor's ordinary business hours and without incurring any charges for the call, and the credit grantor must ensure that that information is available at that number during those hours.

Description of transactions

36 A transaction is sufficiently described for the purposes of section 35 (1) (c) and (d) if the description in the statement of account, along with any transaction record included with the statement of account or made available to the borrower at the time of the transaction, can reasonably be expected to enable the borrower to verify the transaction.

Division 4 Credit Cards

Definitions

37 In this Division:

"cardholder" means an individual who is a borrower in relation to a credit card;

"credit card issuer" means a person who is a credit grantor in relation to a credit card.

Credit cards may be issued only on application

38 (1) A credit card issuer must not issue a credit card to an individual who has not applied for the card.

(2) Subsection (1) does not apply to a credit card that is issued to an individual to replace or renew a card that was applied for and issued to that individual.

Applications for credit cards

39 (1) A credit grantor who has entered into or who is negotiating to enter into a credit agreement for a credit card must ensure that the application form for that credit card discloses the following information or complies with subsection (2):

(a) if the interest rate payable under the credit agreement is a fixed rate of interest, that interest rate expressed as an annual interest rate;

(b) if the interest rate payable under the credit agreement is a floating rate of interest, the index rate and the manner by which that rate is to be modified to obtain the interest rate payable under the credit agreement;

(c) the grace period, if any;

(d) the nature and amount of any non-interest finance charges that are payable or may become payable by the cardholder;

(e) the date as of which the information referred to in paragraphs (a) to (d) is in effect.

(2) Instead of disclosing the information required by subsection (1), the application form may disclose a telephone number that the cardholder can use to obtain that information during the credit card issuer's ordinary business hours and without incurring any charges for the call, and the credit card issuer must ensure that that information is available at that number during those hours.

(3) Despite subsection (2), if an individual applies for a credit card in person, by telephone or by any electronic means, the credit card issuer must disclose the information referred to in subsection (1) when the individual makes the application.

(4) An individual who applies for a credit card without signing an application form is deemed, on using the credit card for the first time, to have entered into a credit agreement in relation to that card in the terms of the disclosure statement referred to in subsection (5).

(5) Nothing in this section relieves the credit card issuer from the requirement to deliver a disclosure statement in accordance with sections 6 and 34.

Additional disclosure for credit cards

40 (1) In addition to the disclosure required by section 34, a credit card issuer must disclose, in the initial disclosure statement for a credit card, the cardholder's maximum liability for unauthorized use of the credit card if it is lost or stolen.

(2) The credit card issuer must notify the cardholder of any change in the information disclosed in a disclosure statement,

(a) in the case of a change to the following information, in the next statement of account following the change in information or in a document that is given to the cardholder with the next statement of account:

(i) a change in the credit limit;

(ii) a decrease in the interest rate or the amount of any other charge;

(iii) an increase in the length of an interest-free period or grace period;

(iv) a change in a floating interest rate, or

(b) in any other case, at least 30 days before the date that the change takes effect.

Limitation of cardholder's liability

41 (1) A cardholder who has, orally or in writing, reported a lost or stolen credit card, or the unauthorized use of the credit card or credit card number, to the credit card issuer is not liable for any debt incurred through the use of that card after the credit card issuer receives the report.

(2) The maximum total liability of a cardholder arising from unauthorized use of a lost or stolen credit card before the issuer receives notice under subsection (1) is the lesser of

(a) $50, and

(b) the maximum amount set by the credit agreement in relation to the credit card.

(3) Subsection (2) does not apply to the use of a credit card in conjunction with a personal identification number at a device commonly referred to as an automated teller machine.

Part 5 Leases of Goods

Definitions

42 (1) In this Part and in the regulations:

"assumed residual payment" means,

(a) for an option lease under which the option price at the end of the term is less than the estimated residual value, that option price, and

(b) in any other case, the estimated residual value plus any amount that the lessee will be required to pay in the ordinary course of events at the end of the term;

"capitalized amount" means the amount determined by

(a) adding

(i) the cash value of the leased goods, and

(ii) the amount of any other advances made to the lessee at or before the beginning of the term, and

(b) subtracting from the amount determined under paragraph (a) the total amount of all payments made by the lessee at or before the beginning of the term, not including

(i) any refundable security deposit, and

(ii) any periodic payment;

"cash value" means, in relation to leased goods,

(a) if the lessor sells like goods to cash customers in the ordinary course of carrying on business,

(i) a value that fairly represents the price for which the lessor sells those goods to cash customers, or

(ii) if the lessor and the lessee agree on a lower cash value, that lower cash value, or

(b) if the lessor does not sell like goods to cash customers in the ordinary course of carrying on business,

(i) the lessor's reasonable estimate of the price at which cash customers would buy those goods, or

(ii) if the lessor and the lessee agree on a lower cash value, that lower cash value;

"estimated residual cash payment" means the amount that the lessee will be required to pay to the lessor at the end of the term of a residual obligation lease if the realizable value of the leased goods at the end of the term equals their estimated residual value;

"estimated residual value" means the reasonable estimate, made by the lessor at the time the lease agreement was entered into, of the wholesale value of the leased goods at the end of the term;

"implicit finance charge" means the amount determined, in connection with a lease, by

(a) adding

(i) all non-refundable payments required to be made by the lessee at or before the beginning of, or during, the term, and

(ii) the assumed residual payment, and

(b) subtracting from the amount determined under paragraph (a), the total amount of the advances received by the lessee;

"option lease" means a lease that gives the lessee the right to acquire title to or retain permanent possession of the leased goods by making a payment in addition to the payments required under the lease or by satisfying other specified conditions;

"option price" means the amount of the additional payment that the lessee must make in order to exercise the option under an option lease;

"realizable value" has the meaning prescribed by the regulations;

"residual obligation lease" means a lease under which, subject to section 46, the lessee may be required at the end of the lease term to pay the lessor an amount based wholly or partly on the difference, if any, between the estimated residual value and the realizable value of the leased goods;

"term", in relation to the duration of a lease, means the period during which the lessee is entitled to retain possession of the leased goods;

"total lease cost" means the total of any non-refundable payments that the lessee will be required to make in the ordinary course of events.

(2) The definitions in section 1 (1), except for the definition of "term", as those definitions are supplemented by section 1 (2) to (4), apply to this Part and for that purpose a reference in section 1 (1), (2), (3) or (4) to "borrower", "cash price", "credit agreement", "credit grantor" or "purchased" is deemed to be a reference to "lessee", "cash value", "lease", "lessor" or "leased", respectively.

Application of this Part

43 This Part applies only to a lease that

(a) is for a fixed term of 4 months or more,

(b) is for an indefinite term or is renewed automatically until one of the parties takes positive steps to terminate it, or

(c) is a residual obligation lease.

Advertising requirements applicable to leases

44 A lessor must ensure that every advertisement that is published by or on behalf of the lessor and that gives specific information about the cost of a lease discloses the following information:

(a) that the transaction is a lease;

(b) the term of the lease;

(c) the nature and amount of any payments that are payable by the lessee on or before the beginning of the term;

(d) the amount, timing and number of the periodic payments;

(e) the nature and amount of any other payments that are payable by a lessee in the ordinary course of events;

(f) the lease APR;

(g) if required by regulations under this or any other enactment, prescribed information regarding extra charges based on usage of the leased goods.

Disclosure required in relation to leases

45 (1) A lessor who has entered into or who is negotiating to enter into a lease must ensure that the initial disclosure statement for that lease discloses the following information:

(a) the effective date of the statement;

(b) that the transaction is a lease;

(c) a description of the leased goods;

(d) the term of the lease;

(e) the cash value of the leased goods;

(f) the nature and amount of any other advance received, and of each charge incurred, by the lessee in connection with the lease at or before the beginning of the term;

(g) the nature and amount of each payment made by the lessee at or before the beginning of the term;

(h) the capitalized amount;

(i) the amount, timing and number of the periodic payments;

(j) the estimated residual value of the leased goods;

(k) for an option lease,

(i) how and when the option may be exercised,

(ii) the option price if the option is exercised at the end of the term, and

(iii) the method of determining the option price if the option is exercised before the end of the term;

(l) for a residual obligation lease,

(i) the estimated residual cash payment, and

(ii) a statement that the lessee's maximum liability at the end of the term is the sum of

(A) the estimated residual cash payment, and

(B) the estimated residual value less the realizable value of the leased goods;

(m) the circumstances, if any, under which the lessee or the lessor may terminate the lease before the end of the term and the amount, or the method of determining the amount, of any payment that the lessee will be required to make on early termination of the lease;

(n) if there are circumstances in which the lessee will be required to make a payment in connection with the lease and if that payment is not required to be disclosed under paragraphs (g) to (m),

(i) the circumstances, and

(ii) the amount of the payment or the method of determining the amount;

(o) the implicit finance charge;

(p) the APR;

(q) the total lease cost.

(2) The circumstances referred to in subsection (1) (n) include, without limitation, unreasonable wear or excess use.

Maximum liability under residual obligation leases

46 The lessee's maximum liability at the end of the term of a residual obligation lease after returning the leased goods to the lessor is the sum of the following amounts as calculated in accordance with the regulations:

(a) the estimated residual cash payment;

(b) the estimated residual value less the realizable value of the leased goods.

Part 6 Compliance and Offences

Definitions

47 In this Part:

"borrower" includes a lessee;

"credit agreement" includes a lease;

"credit grantor" includes a lessor and a loan broker.

Refund of overpayment

48 Despite any agreement to the contrary, if a borrower makes a payment to a credit grantor that the credit grantor is not entitled to receive, the credit grantor must

(a) refund the payment to the borrower, or

(b) if the parties agree, credit the payment against the outstanding balance of the credit agreement as of the time the payment was made.

Credit grantors must compensate borrowers for contravention

49 A credit grantor who contravenes this Act or the regulations must compensate a borrower for any loss the borrower suffers because of the contravention, and the compensation to which the borrower is entitled may be set off against any money then due and payable under the credit agreement, and the balance may

(a) in accordance with the request of the borrower, be set off against the outstanding balance of the credit agreement or paid to the borrower, or

(b) be recovered in an action.

Offences and enforcement

50 (1) Sections 63 to 74 and 76 of the Consumer Protection Act apply to this Act, and for that purpose,

(a) a reference to "director" in those sections, as they apply for the purposes of this Act, and in subsection (2) of this section has the same meaning as in that Act, and

(b) a reference in section 76 of that Act, as that section applies for the purposes of this Act, to "section 75" is deemed to be a reference to subsections (2) to (6) of this section.

(2) A person commits an offence who

(a) contravenes section 6 (1) or (2), 7, 8 (1), 12 (2), 13, 15 (3), 16, 18 (4), 19, 20 (1), 22, 23 (2) or (3), 25, 26, 27, 28 (1) or (2), 29 (2), 30, 32, 34, 35, 38, 39 (1) or (3), 40, 44 or 45 (1) of this Act or an order of the director or minister under this Act or the regulations,

(b) refuses or fails to furnish information as required under this Act or the regulations,

(c) furnishes false information to a person acting under this Act or the regulations,

(d) fails to comply with an order of a court under this Act or the regulations, or

(e) fails to provide the notice required by regulation.

(3) Subject to subsection (4), a person who commits an offence under subsection (2) is liable to a fine not exceeding $10 000 or to imprisonment for a period of not more than one year, or to both.

(4) If a corporation is convicted of an offence under subsection (2), the maximum penalty that may be imposed on the corporation is $100 000.

(5) If a corporation is guilty of an offence under subsection (2),

(a) every director and officer, and

(b) every other person

who authorized, permitted or acquiesced in the offence is guilty of the offence personally and is liable to the penalties set out in subsection (3), but this does not affect the prosecution of the corporation for the same offence.

(6) A proceeding under this section must not be instituted more than 2 years after the date on which the subject matter of the proceeding arose.

(7) Section 5 of the Offence Act does not apply to this Act or the regulations.

Statutory damages

51 (1) For the purposes of this section,

(a) a contravention of this Act or the regulations by a credit grantor is an excusable error if

(i) the credit grantor had a compliance procedure when the contravention occurred,

(ii) the contravention was accidental or the result of an employee's or agent's failure to follow the compliance procedure, and

(iii) on discovering the contravention, the credit grantor promptly complies with sections 48 and 49 and otherwise remedies the contravention, and

(b) a credit grantor is considered to have a compliance procedure if the credit grantor

(i) requires its employees and agents to follow procedures, or has implemented automated procedures, designed to ensure compliance with this Act and the regulations and, in particular, to ensure that borrowers receive the information to which they are entitled at the time and in the form required by this Act and the regulations, and

(ii) monitors the effectiveness of the measures mentioned in subparagraph (i) and promptly remedies any deficiencies discovered in their design or implementation.

(2) If a credit grantor contravenes this Act or the regulations and the contravention is not an excusable error, the borrower is entitled to recover from the credit grantor the statutory damages provided for by this section.

(3) Subject to subsections (4) and (5), the statutory damages for a contravention of this Act or the regulations referred to in subsection (2) are the lesser of

(a) $500, and

(b) 5% of whichever of the following is applicable:

(i) for a contravention in relation to a credit agreement for fixed credit, the maximum outstanding balance;

(ii) for a contravention in relation to a lease, the capitalized amount within the meaning of section 42 (1);

(iii) for a contravention in relation to a credit agreement for open credit with a specified credit limit, the credit limit.

(4) If a contravention of this Act or the regulations relates to a statement of account for open credit, the statutory damages are equal to the sum of

(a) the interest for the period covered by the statement of account, and

(b) any non-interest finance charges for the period covered by the statement of account.

(5) The court may reduce the statutory damages to which a borrower would otherwise be entitled under this section if the court is satisfied, in view of all the circumstances, including any undertakings as to future compliance with this Act and the regulations that are given by the credit grantor, that it would be just and equitable to do so.

(6) The statutory damages to which a borrower is entitled may be set off against any money then due and payable under the credit agreement, and the balance may

(a) in accordance with the request of the borrower, be set off against the outstanding balance of the credit agreement or paid to the borrower, or

(b) be recovered in an action.

Exemplary damages

52 Nothing in this Part precludes a court from awarding exemplary damages to a borrower against a person who has deliberately contravened this Act or the regulations or in any case in which the court considers that the conduct of that person justifies an award of exemplary damages.

Assignee

53 (1) Subject to this section, a borrower may assert against a person to whom the rights of a credit grantor have been assigned, any rights or remedies that the borrower could have asserted under section 11, 48, 49 or 51 against the original credit grantor.

(2) The assignee's maximum liability under subsection (1) is limited to the lesser of

(a) the outstanding balance at the time of the assignment, and

(b) the proportion of the outstanding balance that is assigned to the assignee.

(3) An assignee incurs no liability under this section for a credit grantor's contravention of this Act or the regulations unless

(a) the assignee knew of the contravention before the borrower received notice of the assignment,

(b) the contravention consists of the credit grantor's failure to deliver a disclosure statement to the borrower when required by this Act, or

(c) the contravention is apparent on the face of a disclosure statement, or by comparing the disclosure statement with the written terms of the credit agreement.

(4) An assignee is entitled to rely in good faith on a borrower's signed acknowledgment of receipt of a disclosure statement.

Other remedies

54 Any remedy under this Part is in addition to and does not derogate from any other legal, equitable or statutory remedy.

Conflicts

55 If there is a conflict between a provision of this Act, or a regulation made under this Act, and a provision of any other enactment, the provision of this Act or the regulation made under this Act prevails unless the other enactment expressly provides otherwise.

Part 7 Regulations and Transitional Provisions

Power to make regulations

56 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows:

(a) defining any word or expression used but not defined in this Act;

(b) prescribing, in relation to circumstances in which there are more than one credit grantor or more than one loan broker, which member of that class constitutes the credit grantor or the loan broker, as the case may be, for the purposes of this Act or of one or more specified provisions of this Act;

(c) respecting the manner in which the following are to be calculated:

(i) APR;

(ii) the penalty payable for the early termination of a lease;

(iii) any other matter that under this Act is to be determined by a calculation if this Act does not specify the manner of that calculation;

(d) respecting the criteria to be used in determining what constitutes an index rate;

(e) prescribing those loans of money secured by an interest in real property that do not constitute mortgage loans for the purposes of section 1;

(f) prescribing credit agreements, or classes of credit agreements, to which this Act applies for the purposes of section 3 (c) (iii);

(g) prescribing credit agreements, or classes of credit agreements, to which this Act does not apply for the purposes of section 4 (d);

(h) respecting the form and manner in which information required to be disclosed under this Act, including information that is required under this Act to be disclosed in an advertisement, must be disclosed;

(i) without limiting paragraphs (a) or (h), defining, for the purposes of advertisements, what constitutes a representative transaction, and prescribing information that must be included in any advertisement that refers to one or more representative transactions;

(j) respecting the manner in which the estimated residual cash payment and the realizable value of the leased goods is to be calculated for the purposes of Part 5;

(k) designating any thing received or to be received by a borrower as value received or to be received by a borrower for the purposes of section 1 (2) (g);

(l) designating any thing received or to be received by a borrower as not constituting value received or to be received by a borrower for the purposes of section 1 (3) (c);

(m) designating anything given or to be given by a borrower as value given or to be given by a borrower for the purposes of section 1 (4) (c);

(n) prescribing expenses for the purposes of section 6 (2) (a) or (b);

(o) respecting terms and conditions on which an individual may waive the time period referred to in section 6 (3);

(p) prescribing the portion of any non-interest finance charges that must be refunded or credited under section 15 (3);

(q) prescribing information regarding extra charges for the purposes of section 44 (g);

(r) respecting the form, contents and manner in which information or records may be disclosed or delivered under this Act and the regulations and, for any manner of delivery prescribed, prescribing the time on which a record delivered in accordance with that manner is deemed to be received by the person to whom it is delivered;

(s) requiring credit grantors or loan brokers or one or more classes of credit grantors or loan brokers to retain one or more records required under this Act for a specified period and prescribing when, how and to whom those records must be made available for examination, extracts and copying;

(t) exempting, generally or in specified circumstances, certain classes of persons from all or any part of the Act or regulations;

(u) respecting any matter the Lieutenant Governor in Council considers necessary for carrying out the purposes of this Act, including matters in respect of which no express provision or only partial or imperfect provision has been made.

(3) A regulation under subsection (2) (r) may prescribe different information that may be or is to be disclosed or delivered under this Act and the regulations, and different forms and manners in which information may be disclosed or delivered, for different classes of persons.

Transitional

57 (1) Subject to subsections (2), (3) and (4), this Act applies only to credit agreements and leases entered into on or after the coming into force of this Act.

(2) This Act applies to all credit agreements for open credit, whether they are entered into before, on or after the coming into force of this Act.

(3) This Act applies to credit agreements for fixed credit and leases that are renewed or amended on or after the coming into force of this Act.

(4) Section 13 of this Act applies to the discharge of all mortgages, whether the mortgage for which the discharge is being furnished is entered into before, on or after the coming into force of this Act.

Consequential Amendments

Consumer Protection Act

58 Section 1 of the Consumer Protection Act, R.S.B.C. 1996, c. 69, is amended by repealing the definition of "credit card".

59 Section 10 (5) is amended by striking out ", except for a lender's failure of the type described in section 50 (1) (a) or (b),".

60 Sections 41 to 50 are repealed and the following substituted:

Unsolicited goods

47 (1) In this section, "unsolicited goods" means personal property that is delivered to a person but that has not been requested by that person, but does not include personal property delivered to the recipient that the recipient knew or ought to have known was intended for delivery to another person.

(2) If unsolicited goods are received, the recipient has no legal obligation in respect of those goods unless and until the recipient expressly acknowledges to the sender in writing his or her intention to accept the unsolicited goods.

(3) Unless the acknowledgment referred to in subsection (2) has been given, the sender does not have a cause of action for any loss, use, misuse, possession, damage or misappropriation in respect of the unsolicited goods or the value obtained by the use of the unsolicited goods.

61 Section 75 (1) (a) is amended by striking out "41, 42, 45, 48 (2) or (3), 49 (2),".

62 Section 77 (1) (e) is repealed.

Finance and Corporate Relations Statutes Amendment Act, 1998

63 Sections 10, insofar as it enacts section 15.1 of the Mortgage Brokers Act, and 12 to 14 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, are repealed.

Financial Institutions Act

64 Section 244 (2) (a) and (c) of the Financial Institutions Act, R.S.B.C. 1996, c. 141, is amended by adding ", a provision of the Cost of Consumer Credit Disclosure Act that is prescribed under section 244.1" after "the regulations".

65 The following section is added:

Cost of Consumer Credit Disclosure Act

244.1 (1) In this section, "director" has the same meaning as in the Consumer Protection Act.

(2) For the purposes of this section, the Lieutenant Governor in Council may prescribe provisions of the Cost of Consumer Credit Disclosure Act.

(3) A regulation under subsection (2) may also

(a) identify certain rights and powers, including rights and powers relative to investigations, inquiries and enforcement, and rights and powers to impose enforcement remedies and penalties, that may be exercised by the superintendent or the director under one or more of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act,

(b) prescribe which of those rights and powers, if any, may be exercised by the superintendent, and which of those rights and powers, if any, may be exercised by the director, relative to a prescribed provision of the Cost of Consumer Credit Disclosure Act, and

(c) apply, in whole or in part, one or more provisions of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act to any exercise by the superintendent or the director of a right or power that the superintendent or the director, respectively, would not, without the regulation referred to in paragraph (b) of this subsection, otherwise be entitled to exercise.

(4) If the Lieutenant Governor in Council makes a regulation under subsection (2),

(a) the superintendent and the director each have and may exercise, in relation to the prescribed provisions of the Cost of Consumer Credit Disclosure Act, the rights and powers, if any, respectively prescribed for them under subsection (3) and, without limiting this, the rights and powers of the superintendent under sections 244, 246 and 248 to 251 are available to be exercised by the superintendent or the director, as the case may be, in relation to any person who contravenes a prescribed provision of the Cost of Consumer Credit Disclosure Act, and

(b) Part 6 of the Cost of Consumer Credit Disclosure Act applies in respect of the contravention.

(5) Nothing in this section affects the rights and powers that may be exercised by the director in relation to a provision of the Cost of Consumer Credit Disclosure Act that is not prescribed under subsection (2) of this section.

Miscellaneous Statutes Amendment Act (No. 3), 1999

66 Sections 16 and 44 of the Miscellaneous Statutes Amendment Act (No. 3), 1999, S.B.C. 1999, c. 39, are repealed.

Mortgage Brokers Act

67 Section 8 (1) of the Mortgage Brokers Act, R.S.B.C. 1996, c. 313, as that section is re-enacted by section 3 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, is amended by adding the following paragraph:

(f) the person is in breach of a provision of the Cost of Consumer Credit Disclosure Act prescribed under section 9.1 (2) of this Act.

68 The following section is added:

Cost of Consumer Credit Disclosure Act

9.1 (1) In this section, "director" has the same meaning as in the Consumer Protection Act.

(2) For the purposes of this section, the Lieutenant Governor in Council may prescribe provisions of the Cost of Consumer Credit Disclosure Act.

(3) A regulation under subsection (2) may also

(a) identify certain rights and powers, including rights and powers relative to investigations, inquiries and enforcement, and rights and powers to impose enforcement remedies and penalties, that may be exercised by the registrar or the director under one or more of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act,

(b) prescribe which of those rights and powers, if any, may be exercised by the registrar, and which of those rights and powers, if any, may be exercised by the director, relative to a prescribed provision of the Cost of Consumer Credit Disclosure Act, and

(c) apply, in whole or in part, one or more provisions of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act to any exercise by the registrar or the director of a right or power that the registrar or director, respectively, would not, without the regulation referred to in paragraph (b) of this subsection, otherwise be entitled to exercise.

(4) If the Lieutenant Governor in Council makes a regulation under subsection (2),

(a) the registrar and the director each have and may exercise, in relation to the prescribed provisions of the Cost of Consumer Credit Disclosure Act, the rights and powers, if any, respectively prescribed for them under subsection (3) and, without limiting this, the rights and powers of the registrar under sections 8 and 8.1 of this Act are available to be exercised by the registrar or the director, as the case may be, in relation to any person, registered under this Act, who contravenes a prescribed provision of the Cost of Consumer Credit Disclosure Act, and

(b) Part 6 of the Cost of Consumer Credit Disclosure Act applies in respect of the contravention.

(5) Nothing in this section affects the rights and powers that may be exercised by the director in relation to a provision of the Cost of Consumer Credit Disclosure Act that is not prescribed under subsection (2) of this section.

69 The heading to Division 1 of Part 2, as enacted by section 8 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, is repealed and the following substituted:

Division 1 Application .

70 Section 15, as re-enacted by section 9 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, is repealed.

71 The following section is added:

Disclosure to borrowers

15.01 The Lieutenant Governor in Council may prescribe one or more mortgage transactions or classes of mortgage transactions for the purposes of this section and may, for each prescribed mortgage transaction or each mortgage transaction of a prescribed class of mortgage transactions, prescribe

(a) the provisions of the Cost of Consumer Credit Disclosure Act that apply to that mortgage transaction, and

(b) the person who, in relation to that mortgage transaction, must comply with, and who is otherwise subject to, the Cost of Consumer Credit Disclosure Act provisions in relation to that mortgage transaction.

72 Section 15.2 (a), as enacted by section 10 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, as that section 10 was amended by section 15 of the Miscellaneous Statutes Amendment Act (No. 3), 1999, S.B.C. 1999, c. 39, is amended by striking out "16,".

73 The heading of Division 2 of Part 2, as enacted by section 11 of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, is repealed.

74 Sections 16 and 17 are repealed.

75 Section 22 (1), as re-enacted by section 17 (a) of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, as that section 17 (a) was amended by section 18 of the Miscellaneous Statutes Amendment Act (No. 3), 1999, S.B.C. 1999, c. 39, is amended

(a) in paragraph (a) by striking out "16 (1),", and

(b) in paragraph (b, by striking out "15.1 (2) or (3), 16 (3.2), 16.1,".

76 Section 23 (2) (h), as re-enacted by section 18 (b) of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, as that section 18 (b) was amended by section 19 of the Miscellaneous Statutes Amendment Act (No. 3), 1999, S.B.C. 1999, c. 39, is amended by striking out "sections 16, 17.3 and 17.4, notices under section 16," and substituting "sections 17.3 and 17.4,".

77 Section 23 (2) (h.1), as enacted by section 18 (b) of the Finance and Corporate Relations Statutes Amendment Act, 1998, S.B.C. 1998, c. 7, as that section 18 (b) was amended by section 19 of the Miscellaneous Statutes Amendment Act (No. 3), 1999, S.B.C. 1999, c. 39, is amended by striking out "16,".

Motor Dealer Act

78 The Motor Dealer Act, R.S.B.C. 1996, c. 316, is amended by adding the following section:

Cost of Consumer Credit Disclosure Act

8.1 (1) In this section, "director" has the same meaning as in the Consumer Protection Act.

(2) For the purposes of this section, the Lieutenant Governor in Council may prescribe provisions of the Cost of Consumer Credit Disclosure Act.

(3) A regulation under subsection (2) may also

(a) identify certain rights and powers, including rights and powers relative to investigations, inquiries and enforcement, and rights and powers to impose enforcement remedies and penalties, that may be exercised by the registrar or the director under one or more of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act,

(b) prescribe which of those rights and powers, if any, may be exercised by the registrar, and which of those rights and powers, if any, may be exercised by the director, relative to a prescribed provision of the Cost of Consumer Credit Disclosure Act, and

(c) apply, in whole or in part, one or more provisions of this Act, the Cost of Consumer Credit Disclosure Act and Part 6 of the Consumer Protection Act to any exercise by the registrar or the director of a right or power that the registrar or the director, respectively, would not, without the regulation referred to in paragraph (b) of this subsection, otherwise be entitled to exercise.

(4) If the Lieutenant Governor in Council makes a regulation under subsection (2),

(a) the registrar and the director each have and may exercise, in relation to the prescribed provisions of the Cost of Consumer Credit Disclosure Act, the rights and powers, if any, respectively prescribed for them under subsection (3) of this section,

(b) contravention of a prescribed provision of the Cost of Consumer Credit Disclosure Act by a person is grounds for the registrar or the director, as the case may be, to determine that it is not in the public interest for the person to be registered or continue to be registered under this Act and, without limiting paragraph (a) of this subsection, the rights and powers of the registrar under Part 1 of this Act that may be exercised in the event of that determination are available to be exercised by the registrar or the director, as the case may be, and

(c) Part 6 of the Cost of Consumer Credit Disclosure Act applies in respect of the contravention.

(5) Nothing in this section affects the rights and powers that may be exercised by the director in relation to a provision of the Cost of Consumer Credit Disclosure Act that is not prescribed under subsection (2) of this section.

Commencement

79 This Act comes into force by regulation of the Lieutenant Governor in Council.


[ Return to: Legislative Assembly Home Page ]

Copyright © 2000: Queen's Printer, Victoria, British Columbia, Canada