Force service providers to live up to wireless code, consumer groups argue

Some cellphone companies are either passively or actively violating Canada's wireless code of conduct and the rules need to be tightened and enforced, consumer groups told a hearing Monday.

Contract length, unlocking charges and other topics will be discussed

The CRTC's wireless code effectively banned cellphone contracts of more than two years, but one telecom provider says consumers should be given that choice back again so they can bring down handset fees. (Carlos Barria/Reuters)

Some cellphone companies are either passively or actively violating Canada's wireless code of conduct and the rules need to be tightened and enforced, consumer groups told a hearing Monday.

While consumer complaints have dropped since the code came into effect in 2013, the Public Interest Advocacy Centre told the review wireless users need greater controls put in place so they don't suffer from "bill shock."

"Certain wireless service providers have ... knowingly or unknowingly avoided or violated or attempted to change clear wireless code requirements, and have not largely been stopped," advocacy centre executive director John Lawford told the Canadian Radio-television and Telecommunications Commission. "This must change."

The CRTC review comes amid calls for greater parental control over household cellphone data charges and clearer rules governing wireless service cancellation fees and how caps on data overage fees should apply.

Speaking on behalf of the Consumer Association of Canada, the National Pensioners Federation and the Council of Senior Citizens Organizations of British Columbia, PIAC told the regulator that, in some cases, wireless providers offer data and voice as optional services, despite stipulations in the code that key services be clearly spelled out in wireless contracts.

"(This) is not only vastly inappropriate and skewed against the consumer, but clearly contradicts the spirit and letter of the wireless code," said PIAC legal counsel Alysia Lau.

"Data and voice services clearly form a key part of a wireless contract."

Contracts capped

The first code effectively killed three-year phone contracts, limiting them to 24 months. But that led, in many cases, to higher monthly bills as the service providers were forced to recoup the cost of subsidized smartphones over a shorter period.

While Telus Corp., has suggested the CRTC revisit the two-year limit, arguing that providing a three-year contract option could reduce monthly bills by amortizing the cost of so-called zero-dollar phones over 36 months, BCE Inc., and Rogers Communications Inc., have not specifically proposed changes to contract length provisions.

Carriers also want to be able to recoup the cost of items offered for free to customers as incentives to sign a contract.

Currently, service providers can charge consumers for the residual value of subsidized cellphone hardware if they cancel their contracts early. For example, a customer could be charged $300 if they cancel a two-year contract after one year, if the initial value of the incentivized phone was set at $600.

But the code doesn't allow carriers to recover the cost of other promotional items, such as new TVs or tablets.

Industry and consumer groups acknowledge the code has been largely effective since coming into force.

"We love it," Lawford said of the consumer-protection provisions of the code.

The most recent survey commissioned by the CRTC revealed about 46 per cent of consumers paid fees for exceeding their data limits. But the TNS Canada survey, conducted in September, also showed that only about 20 per cent of respondents experienced "bill shock" from their wireless services, down from 28 per cent who said they experienced the problem in 2014.

Complaints to the Commissioner for Complaints for Telecommunications Services also dropped sharply between 2015 and last year, according to the watchdog.

But CRTC chairman Jean-Pierre Blais questioned Monday whether the code should spell out how carriers charge for data overages when increasingly popular family plans are now spreading data use over a number of devices in a household.

In its testimony, Telus told the hearing its "default" policy allows anyone with a device on such a plan to approve a data use extension, but noted it offers data management tools that allow for greater control and warn consumers when they're about to reach or exceed their data limits.

But account holders have complained that the tools offered by service providers often don't work and that it's too easy for children to approve data overage charges at the push of a button, sometimes resulting in massive bills.

Limit on charge for overages

"It wasn't an issue at the time (the code was introduced) but now it is," said CRTC spokeswoman Patricia Valladao.

The existing code places a $50 a month limit on what carriers can charge for data overages.

But while consumer advocates argue the cap should apply to individual accounts, including family plans, some carriers have been applying the charge for each wireless device.

In that case, a family of four, with four devices, could face up to an extra $200 in overage fees.

Blais also raised questions Monday over fees charged for unlocking cellphones.

Consumer groups argue that the fees should be eliminated, pointing to Japan, which passed regulations in 2015 requiring carriers to unlock all devices, free of charge.


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