Canadian cellphone companies are giving customers the ability to refuse mid-term changes to their contracts under a new wireless code of conduct.
The code, introduced by the Canadian Wireless Telecommunications Association on Tuesday, promises to let customers cancel their contracts without early termination fees if the carrier makes material changes to terms — or customers can refuse the changes outright.
So, for example, if a customer is in the middle of a two-year contract and the carrier tries to raise prices, the customer can cancel the contract or continue their existing deal until it expires.
"In the case of such material changes that are unfavourable to customers, we either give them the right to terminate the contract without any additional fees for early termination, or allow them to remain on the unchanged contract," the code on the CWTA website says.
The code specifies that the rule doesn't apply in the case of changes required by law or for customers without a fixed-term contract. Some carriers have already allowed customers out of contracts early if changes are made, but the code now enshrines it with all providers.
Cellphone carriers typically charge $20 a month for every month remaining on a contract to cancel a deal, with additional charges if customers have a data plan on their device.
Previously at mercy of carriers
Customers have therefore been at the mercy of carriers changing terms on them in the middle of a contract, because in many cases it would have been prohibitively expensive to cancel early.
Other pledges found in the code are promises to:
- Help customers understand their services and charges with clear and readable contracts.
- Protect their personal information.
- Provide them with proper customer service.
The code will be used by the Commissioner for Complaints for Telecommunications Services, a body set up two years ago by the industry to negotiate disputes between customers and companies, when judging complaints on cellphone services.
"The CCTS will resolve and hear complaints and they will adjudicate against the code and, therefore, enforce the code," CWTA president Bernard Lord said.
"That's one thing that's very clear here and different from similar codes you'll find in other countries, and that is that our code links to a third-party adjudicator."
So far, every major Canadian cellphone carrier — including Bell, Rogers and Telus and their subsidiary brands Solo, Virgin, Fido and Koodo — has signed on to the code, as have new entrants starting service within the next few months, with the exception of Toronto-based DAVE Wireless.
Lord said he hopes to have DAVE, run by entrepreneur John Bitove, sign on before it launches service. A spokesperson for the company said it intends to sign on to the code closer to its launch.
The CWTA will monitor the code and how it is administered by the CCTS for two years and make changes as necessary, Lord said.
Consumer advocates don't think much of the new code.
"I think the privacy guarantee isn't anything. Just saying they have privacy policies is no help whatever," said John Lawford, a lawyer with the Public Interest Advocacy Centre. There is "very little substance here.... At this juncture it's too general and vague to really be of use."
The code was announced a day after it was revealed that the CWTA, the wireless industry's lobby group, had helped persuade the federal government to scrap a taxpayer-funded online cellphone rate calculator.
Lord said the tool was ineffective because it didn't take into account data plans or bundle discounts, while a spokesperson for Industry Minister Tony Clement said it was scrapped because of technical limitations.
Critics, including Liberal MP Dan McTeague, said the government was guilty of caving in to lobbying by the industry. Studies found that focus groups who had used the online calculator in tests were overwhelmingly positive about it.
The website was supposed to have launched in June.