(Manu Fernandez/AP)

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Cellphone plans - what kind of problems have you had, and how did you get them resolved?

It's not uncommon for Josh Boulding to have errors on his cellphone bill, so he has had plenty of practice in negotiating the often frustrating and bewildering world of customer service. He has even developed a technique for dealing with what he says are often clueless customer support representatives.

"You just keep calling until you get the answer you want because you're going to get a different one each time," he says. "Once you do, you record the call and you can stick it to them."

"If everybody's the same, it doesn't matter where you go."

— customer Josh Boulding

Boulding, a 20-year-old physics student at the University of Winnipeg, switched to MTS Allstream Inc., the biggest cellphone provider in Manitoba, about a year ago from the country's largest carrier, Rogers Communications Inc. The difference between the two so far? Not much, he says – both have done their utmost to confuse him.

With both companies, his bills have been overly complex, his service contracts have had so many clauses that they're, "worse than an insurance policy," and the customer service agents have been unable to answer his questions because they have either been poorly trained or unconcerned. He has been billed a system access fee twice in one month and has even had his monthly subscription charge raised, despite being in the middle of a long-term contract – a move his service provider was able to make thanks to a "notwithstanding clause" buried in the terms of agreement.

What's most infuriating about all of this is that it seems to have been done on purpose, Boulding says. All the cellphone companies have benefited from keeping customers like him off balance and confused.

"It's a way of deterring complaints. These companies reach a comfortable equilibrium with each other and then nothing changes because people still need the product," he says. "If everybody's the same, it doesn't matter where you go."

Boulding is just one of the thousands of Canadians frustrated with how Canada's major cellphone providers – including number two and three players Bell Canada Inc. and Telus Corp., as well as Rogers and MTS — market and support their services. Customers from one end of the country to the other are voicing their displeasure through dozens of websites, online petitions and even Facebook groups.

"I have suffered through poor customer service and incompetent installers and assumed I wasn't alone," says the introductory message on ihaterogers.ca. "I can't wait to cancel!" reads the greeting on the I Hate Telus Mobility group on Facebook.

"When you start off with an idea and you start developing it, there is the risk of maybe over complexity. But I would suggest we're done with that."

— David Neale, senior vice-president of products and services at Telus

The complaints most often found in these places are that prices are too high or that the service is shoddy, but the common thread tends to revolve around confusion — customers don't feel they're being told the whole story, or the story is different depending on who is telling it.

The industry admits its offerings are not as straightforward as they could be, but that so far has been a natural evolution of the services and one it is working to correct.

Intent is the key

It's the issue of intent that's key, critics say. Intentional confusion is at the heart of a class-action lawsuit launched against the carriers in 2004 by Saskatchewan lawyer Tony Merchant and certified by the province this past September. The lawsuit seeks the return of up to $20 billion by the carriers to customers for wrongfully — and knowingly — charging a monthly "system access fee."

(Paul Sakuma/Associated Press)

Historically, the fee was a licence charged to customers by the government for using the public radio airwaves that cellphones transmit across. But in 1987, the government stopped charging the fee and the cellphone carriers decided to pick it up. As if that wasn't bad enough, Merchant's lawsuit says, consumers were then misled to believe the fee was still one mandated by the government.

"When you asked within the companies, you got various answers," Merchant says.

Customer service agents told people the fee, which ranges between $6.95 and $8.95 a month depending on carrier, was collected on behalf of the government or the Canadian Radio-television and Telecommunications Commission, or that it was simply an extra charge for maintaining their cellphone networks.

"Their own employees were very confused and management took no steps to do anything about it," he says. "There was — to be charitable — a general confusion in the marketplace. Really the companies were happy with the wrong impression that all these people had, and took no steps to set it aside."

In 2004, Industry Canada sought to end the confusion by telling carriers to stop giving off the impression that the fee was government-mandated.

"[System access fees] are neither required nor have they ever been collected by the government of Canada," says Peter Hill, director of spectrum management operations for Industry Canada. As of April 1, 2004, "companies are not required or permitted to levy charges to their subscribers on behalf of Industry Canada."

"You just don't know what you're going to end up paying."

— Sridhar Moorthy, professor of marketing at the University of Toronto's Rotman School of Business

So far, more than 20,000 of Canada's 19 million cellphone customers — including Boulding — have signed on to the lawsuit. The carriers reject that they purposely misled customers or that they profited off the confusion, and are seeking leave to appeal the September ruling.

Carriers could be more straightforward

Some carriers, however, admit that services could be more straightforward and say they are constantly trying to simplify their offerings. David Neale, senior vice-president of products and services at Telus, says the company's recent introduction of its My Fave plan, where customers get unlimited calling to five specific phone numbers, is an attempt at simplifying rates.

"When you start off with an idea and you start developing it, there is the risk of maybe over complexity. But I would suggest we're done with that," he says. "The plans are evolving constantly and the underlying theme, certainly here, is simplicity."

The Canadian Wireless Telecommunications Association, a lobby group funded by the carriers, also says the industry has to simplify how it deals with customers.

"Any time a customer says they are confused by their bill, we clearly have a better job to do," says Peter Barnes, the CWTA chief executive officer. "You shouldn't have a significant number of customers saying that, because otherwise we're not being as clear as we could be."

But both Telus and the CWTA deny the confusion was intentional.

Regardless, up until the formation of the Commissioner for Complaints for Telecommunications Services in July, customers didn't have anywhere specific to go with their complaints. The CRTC in 1994 decided against regulating cellphone services, leaving the Consumer Association of Canada to pick up the slack. Cellphone issues were among its top complaints, president Bruce Cran says, with the organization receiving about 150 cellphone complaints a week. Most were over trivial billing disputes.

"They were silly little things that if you were running a store you would resolve them the first time the person called you," he says. "For some reason or another, the cellphone companies could do all these marvellous things but they were never able to bring themselves to resolve silly little complaints in a timely manner."

The CAC has since July forwarded all cellphone complaints to the CCTS, which reported more than 500 "incidents" — including simple calls for information — in its first two months of operation. The CCTS says it has been successful in resolving the vast majority of complaints, with only a handful still awaiting resolution.

Other consumer groups, including the Public Interest Advocacy Centre, are not happy with the way the CCTS has been set up or how it runs. The new office is funded and run by the industry and does not properly represent the interests of consumers, and its mandate is limited, says PIAC lawyer John Lawford.

"It shouldn't exist," he says. "It's nice to take that pressure off [the CAC] but in terms of what you're sending them to, you're sending them to a black hole."

The CRTC has ultimate say on how the CCTS will be governed and on Nov. 14 held a hearing to determine the new agency's future. The CRTC is expected to make a ruling in February.

Confusion is international

The issue of confusion, meanwhile, extends to cellphone companies beyond Canada. In March 2006, Theresa Gattung, CEO of Telecom New Zealand, precipitated the downfall of her company by admitting at a meeting of financial analysts to confusing customers.

"Think about pricing. What has every telco in the world done in the past? It's used confusion as its chief marketing tool. And that's fine," she said. "You could argue that that's how all of us keep calling prices up and get those revenues, high-margin businesses, keep them going for a lot longer than would have been the case.

"But at some level, whether they consciously articulate it or not, customers know that's what the game has been. They know we're not being straight up."

Two months later, the New Zealand government dropped the hammer on Telecom, the country's largest publicly traded company, by imposing a raft of new telecommunications regulations. Gattung stepped down as CEO in June 2007, and the government is now in the process of splitting Telecom into three separate businesses. The company's share price, meanwhile, has fallen 20 per cent since Gattung's comments were made public.

In the United States, Verizon Communications Inc. — the nation's second-largest cellphone provider — last month agreed to refund customers $1 million US for offering an unlimited data plan that wasn't actually unlimited. The company had cut off customers for exceeding undisclosed limits, thus running afoul of U.S. consumer authorities for misleading use of the word "unlimited."

Bell Canada in September rolled out similar "unlimited" data plans for cellphones, but the fine print of the usage contracts indicate that customers may not use any "multi-media streaming, voice over internet protocol or any other application which uses excessive network capacity that is not made available" by the company.

Critics of the plans say they are just as misleading as those offered by Verizon.

"In other words, you pay for unlimited bandwidth, yet can't use many of the services that make affordable unlimited bandwidth such a necessity in Canada," writes University of Ottawa law professor Michael Geist on his blog.

A spokesman for Bell says the plans aren't meant to be misleading and serve the purposes of the vast majority of customers. The fine print is designed only to discourage the small minority who would inevitably abuse the "unlimited" concept.

But Bell's plans are indicative of the general tactics used by telecommunications companies to obfuscate the real costs of services, marketing experts say.

"As a consumer I can say I've been confused as well with the multitude of plans and the lack of transparency in the plans," says Sridhar Moorthy, professor of marketing at the University of Toronto's Rotman School of Business, who likens them to airline tickets.

"When you book a ticket you don't know what the taxes are going to be like. It's the same thing," he says. "You just don't know what you're going to end up paying."

Confused yet?

How a one-year, $30 plan from Rogers in Ontario can easily balloon up to double the advertised price:

• $30 Mega Time package — Unlimited evening and weekend minutes (evenings starting at 9 p.m.). Otherwise, 200 minutes during weekdays. Unlimited calling on the Rogers network. (Note: Customers must keep track of who they call and when.)

Other mandatory fees:

$6.95 — System access fee that goes toward maintenance of the network and spectrum licence charges.
• $0.50 — 911 access fee.
• $35 — One-time activation fee. Divided by 12 months, this works out to $2.92 per month.
• $46.02 — Monthly total so far with taxes (GST and PST).
Optional yet popular services:
• $6 — Voice mail or call display
• $3— Thirty text messages.
• $3 — Ten minutes of long-distance calling in Canada.
Total:
• $59.70 — Monthly total with taxes (GST and PST).

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