Business·GO PUBLIC

Customer takes Bell to court and wins, as judge agrees telecom giant can't promise a price, then change it

A Toronto man is elated after a deputy judge ruled that a verbal contract he made with a Bell customer service agent — guaranteeing a monthly price for 24 months — trumps the contract Bell later emailed him, outlining prices could increase.

Contract law expert says Ontario case could be grounds for class-action lawsuit

David Ramsay took Bell to court and won after the telecom giant refused to honour a verbal contract he made with a call centre rep, later emailing him a contract that said prices could change. (Mark Bochsler/CBC)

A Toronto man is elated after a deputy judge ruled that a verbal contract he made with a Bell customer service agent trumps the contract the telecom later emailed him, noting prices could increase.

In a judgment issued last month in a Toronto small claims court, Deputy Judge William C. De Lucia said that Bell's attempt to impose new terms after a verbal contract guaranteeing a monthly price for 24 months had been struck was "high-handed, arbitrary and unacceptable."

It all started in November 2016, when David Ramsay called a Bell customer service representative to inquire about TV and internet services.

A small claims court deputy judge ruled it would be unfair and prejudicial if Bell changed contract terms. (Mark Bochsler/CBC)

The sales agent told Ramsay he could get Bell's Fibe TV and internet services "for $112.90 a month for 24 months" and then said he'd get an "email confirmation of everything that was just discussed."

But when the email arrived, it said prices were actually "subject to change" and that Bell was planning to increase its price for internet service by $5, two months later.

"I was stunned and appalled to find these buried terms in an email," says Ramsay. "I had a contract, and this ain't that contract."

Ramsay called Bell to say the emailed contract was different from the verbal contract he'd made on the phone.

In a move that was pivotal to his legal case, he requested a transcript of the call in which the customer service rep promised him a fixed price for two years.

  • To request phone call transcript with Bell: email

"They kept saying, 'Everyone has to pay those price increases,'" says Ramsay. "'Everyone has to pay.'"

Undeterred, Ramsay filed a complaint with the Commission for Complaints for Telecom-television Services (the CCTS), a moderator between customers and telecom providers.

In a lengthy email exchange, a spokesperson for the CCTS insisted that Bell had the right to increase prices and since the telecom had notified Ramsay of this fact — as well as an upcoming price increase —  it ruled that the telecom provider met its obligations and no further investigation was warranted.

The CCTS closed Ramsay's file.

"I couldn't believe it," says Ramsay. "They just refused to consider my argument that I had a verbal contract. I even sent them a link to that section of the law, which they ignored."

'There's a principle at stake here'

Ramsay had consulted a couple of lawyer friends, who told him they thought he was on the right track, that a verbal agreement was binding.

"Even though the dollar amount was small," says Ramsay, "I got on my white horse and thought, 'There's a principle at stake here. Let's take them to small claims court and see what happens.'"

Industry-wide problem

Ramsay also figured he wasn't the only one who had the same concerns about Bell's pricing, in part because of stories he'd seen by Go Public and other media reports.

Go Public has received over 100 similar complaints from customers who say Bell sales agents promised them a guaranteed monthly price, only to receive an emailed contract where it said prices could go up.

A recent Go Public/Marketplace hidden camera investigation captured sales reps for Bell falsely telling customers their monthly price would not increase for two years. (Marketplace/CBC)

In a joint Go Public/Marketplace investigation earlier this year, sales agents for Bell were repeatedly caught on hidden camera falsely promising customers that prices for TV, internet and home phone deals would not change for 24 months.

Customers from other telecoms — such as Rogers and Telus — have written to say they, too, were promised a price by a sales rep only to receive an email mentioning that prices could change.

According to a recent report from the CCTS, between August 2017 and January 2018 the number 1 complaint it received — from almost 2,000 customers — was that telecom providers gave misleading information or did not disclose all contract terms.

Bell sought confidentiality agreement

Before they got to court, Bell offered Ramsay money to drop the case — $300, roughly the amount Ramsay estimated the telecom would be over-billing him for two years. He declined.

"I wanted a judge to rule on the merits of this case," he says. "And if I happened to win, I thought it'd be a useful case for others to know about."

Three weeks before the court date, Bell contacted Ramsay again. He was offered $1,000 to settle, but was required to sign a confidentiality agreement. Again, Ramsay declined.

"I thought the merits of the case were good," he says. "Not to get too self-righteous, but I thought it was a battle worth having. So I said, 'Onward, ho!'"

Off to small claims court

Representing himself, Ramsay appeared in a Toronto small claims court on March 19, armed with what he calls his "smoking gun" — the transcript of his conversation with the Bell sales rep.

He highlighted two specific comments by that agent — one in which she told him "Your total cost for the 24 months will be $112.90 per month" and "You're going to get an email confirmation of everything that was just discussed."

Bell stuck to its argument that it had emailed contract details shortly after Ramsay's call, so the contents of that email were what should be binding. It also said the customer service agent Ramsay spoke to did not know about a planned price increase, which is why that wasn't mentioned, and claimed that, because Ramsay had continued with Bell's service, he was essentially agreeing to the telecom's contract terms.

De Lucia was not swayed by those arguments, saying in his reasons for judgment, "I find that Bell can not unilaterally insert or impose new terms. Any imposition of new terms ... is unenforceable."

De Lucia said Bell has the right to impose price changes, but not during a contract when a monthly price has been agreed upon.

"To alter or change the terms, as Bell has requested," said De Lucia, "would be grossly unfair, grossly prejudicial to the plaintiff and unconscionable."

The deputy judge ordered Bell to pay Ramsay $1,110 to cover the cost of damages, his time, inconvenience and miscellaneous costs.

Bell won't comment on judgment 

Go Public asked Bell for an on-camera interview, but the the request was declined.

It also refused to comment on the deputy judge's findings, and would not address complaints by other customers who say they were not [verbally] told prices were subject to change when they purchased services.

In an email, Bell's senior manager of media relations admitted the call centre rep did not tell Ramsay that prices were subject to change and said Bell had "informed the customer service team involved and they are using it as a coaching opportunity."

The Bell spokesperson also said the company had offered to cancel Ramsay's contract without penalty.

Ramsay told Go Public that he didn't cancel, because he wanted the services at the price he had [verbally] negotiated.

CCTS changes tune

In an apparent turnaround, when Go Public contacted the CCTS to discuss Ramsay's victory, commissioner Howard Maker said the organization believes an oral contract is binding.

"If a customer calls a service provider on the phone and they make a deal for a package of services for a fixed price, that's a deal," said Maker.

It's also the opposite of what the CCTS employee handling Ramsay's case determined.

Howard Maker of the CCTS says his organization will review how David Ramsay's case was handled. (Andrew Lee/CBC)

"We are human," said Maker. "So did we make an error? Maybe ... we'll do our analysis ... and we'll take appropriate steps."

Ramsay wants the CCTS to re-open similar cases where staff erroneously told customers they had to pay price increases when a telecom sales rep didn't inform them of those changes before locking them into a contract.

"I'm sure they have hundreds of cases just like mine," says Ramsay. "So I think it's incumbent on the CCTS to take notice of this and review a bunch of those cases."

Grounds for class action

Meanwhile, an expert on contract law says he foresees a lot of consumer interest in this "David vs. Goliath" case.

"It should really make consumers feel very confident," says Anthony Daimsis, a contract law professor at the University of Ottawa.

"Should they choose to all get together, instead of having to deal with these claims one at a time, they could probably make a very good case for one big class action."

Contract law Prof. Anthony Daimsis says the small claims court ruling could have big implications for Bell and other telecoms, suggesting customers could initiate a class-action lawsuit. (Andrew Lee/CBC)

Even though the case was heard in small claims court, Daimsis says the judgment was "persuasive" and likely how a higher court would rule.

Daimsis considers the judgment a warning to all telecom providers.

"What it should signal to other outfits that are operating this way, is that this is not the way Canadian courts will accept how larger parties act with consumers."

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Erica Johnson

Investigative reporter

Erica Johnson is an award-winning investigative journalist. She hosted CBC's consumer program Marketplace for 15 years, investigating everything from dirty hospitals to fraudulent financial advisors. As co-host of the CBC news segment Go Public, Erica continues to expose wrongdoing and hold corporations and governments to account.

With files from Enza Uda


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