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Dialing up clearer contracts

New cellphone-fees legislation comes into effect Saturday

By: Kevin Rollason

Friday, Sep. 14, 2012 at 1:54 PM | Comments: 0

Mike Deal / Winnipeg Free Press Cellphone companies must explain all contract fees to prospective customers as of Saturday. (MIKE DEAL / WINNIPEG FREE PRESS)

An extra $300 tacked onto his bill was the wake-up call Sam Matthews needed to look more closely at his cellphone plan and find a better deal.

Three cellphone companies and various plans later, Matthews said he's glad the provincial government has stepped in -- starting Saturday, a law will force companies to fully disclose and explain all charges, fees and terms.

Rules cut cost of cancelling longer deals

The province's changes to cellphone-contract cancellation fees:

Fixed-term contract with a cellphone:

Currently -- Could cost anywhere from $360 to $760 or more (depending on the contract) to cancel a contract before it expires.
Starting Saturday -- Fee calculation based on the phone discount and how many months until the end of the contract. If a person got a $360 phone free by signing a three-year contract and wanted to cancel two years into the contract, then the cancellation fee would be $120 based on the equation $360 x 12/36 $120.

Fixed-term contract with no cellphone:

Currently -- Could be charged $400 or more to cancel a contract early.
Starting Saturday -- Maximum cancellation fee is $50 or 10 per cent of the minimum monthly cost multiplied by the months remaining on the contract, whichever is less.

-- source: Government of Manitoba

The same law will also protect Manitobans from excessive cancellation fees to get out of cellphone contracts.

"They would explain some stuff, but it wasn't until you overused your minutes or your data that you knew what your plan really was," Matthews said Thursday. "That's when I thought I have to revisit my plan."

And Matthews said it's good cellphone customers who decide to get out of a contract early -- either because there's a better plan elsewhere or because their phone is defective -- will have a cheaper exit.

"As consumers, you want to have choice -- you don't want to be locked into something."

Under the Consumer Protection Amendment Act (cellphone contracts) the province will also prevent companies from making unilateral contract-term changes, ensure ads show the minimum monthly cost, restrict automatic cellphone contract renewals and provide increased protection for contracts not signed in person or signed on the Internet.

Fines for businesses that don't follow the law are up to $1,000 for a first offence, $3,000 for a second offence and $5,000 for all future offences.

Gloria Desorcy, executive director of the Manitoba branch of the Consumers' Association of Canada, said she's pleased customers will get more information before signing a cellphone contract.

"It's great to see Manitoba is one of the provinces taking the lead on this," Desorcy said. "We believe one of our consumers' rights is to have information before you buy or before you use it and how those costs may change.

"It's important that the plans be straightforward -- we're not all lawyers."

But Marc Choma, of the Canadian Wireless Telecommunications Association, said they hope the CRTC, which is co-ordinating consultations, will create national cellphone-contract standards.

Choma said Quebec was first with new regulations, followed by Manitoba, but Nova Scotia and Newfoundland and Labrador have also passed legislation, while the Ontario government is debating the issue next week.

"We would prefer to see this at a national level," he said.

"We'd like to see all Canadians on equal footing... You could end up with 13 different legislations.

"It shouldn't be based on where you live. All Canadians should have the same advantages."

A spokeswoman for MTS Allstream said the company will fully comply with the legislation on Saturday and then will begin calculating termination fees under the new rules and providing customers with a clear description of their minimum monthly bill costs.

kevin.rollason@freepress.mb.ca

History

Updated on Friday, September 14, 2012 at 11:56 AM CDT:
Clarifies MTS Allstream will begin calculating termination fees Saturday.

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