Quebec to end automatic cellphone contract renewals, surprise fees

The Quebec government has tabled legislation to better protect consumers in the province when they sign cellphone contracts.

The Quebec government has tabled legislation to better protect consumers in the province when they sign cellphone contracts.

Justice Minister Kathleen Weil said laws aimed at protecting cellphone users were written in the early 1970s and don't address current consumer habits.

She said Bill 60, introduced Tuesday, would revise outdated rules.

There can be "very onerous penalty fees" to pull out of a contract once a service provider automatically renews it — usually for a period lasting three years, Weil said.

The bill would prohibit the renewal of cellphone contracts without a customer's written approval, she said.

It would also force merchants to disclose the total cost of the goods and services offered, a move Weil said should prevent customers from being caught off guard by hefty fees for services they don't want, such as text messaging.

In addition, companies won't be able to suddenly increase fees during the life of the contract.

"Consumers often don't understand everything that they have agreed to when they've signed that contract," the minister said. "The contracts are a little vague, and there are services that are added over time without their knowledge and without their consent."

"The first thing that [merchants] do is offer you a free cellphone, and it's sort of the lure that gets you into that relationship," Weil told reporters.

Merchants will have to explain existing warranty protection

Weil said the new law would make it illegal for merchants to sell extended warranties before telling customers what the manufacturer already offers for warranty protection.

It would also put an end to expiry dates on prepaid cellphone gift cards.

The minister said the bill, amending the province's Consumer Protection Act, would correct an imbalance in an evolving industry.

"In consumer protection you often have an imbalance that happens over time and in the whole field of telecommunications. There is not a jurisdiction in North America that hasn't noticed this imbalance."

Michel Arnold, head of the non-profit consumer rights group Option consommateurs, said Quebec is the first jurisdiction in the country to introduce this kind of consumer protection.

Weil said officials in the province receive nearly 700 formal complaints about cellphone contracts each year — about 10 per cent of all consumer complaints  — as well as thousands of inquiries.

Bill 60 is expected to be adopted before the end of the year.