Ontario promises legislation to make wireless contracts for cellphones clearer

By Keith Leslie, The Canadian Press  | April 12, 2012

TORONTO - "Cell shock" is hitting too many Ontarians as they open their cellphone bills and find unexpected charges, Consumer Services Minister Margarett Best said Thursday as she promised legislation to improve wireless service contracts.

The issue of unexpected charges from wireless service providers is consistently among the top 10 consumer complaints to her ministry, Best told reporters.

"One common problem we are responding to is the cell shock that many consumers experience upon opening their monthly bill," she said.

"The cell shock results from consumers being surprised for charges on services they were not aware they would be charged for or services they did not know would cost extra."

The proposed legislation would require that contracts for wireless services be written in plain language and spell out which services come with the basic fee, and which cost extra.

Some wireless providers are amending contracts without the knowledge or consent of consumers, resulting in additional charges they are unaware of until they actually open their bills, said Best.

"There is a need to provide additional protection for consumers in their agreements with (wireless) service providers," she said.

"Our government's goal is to provide greater clarity and fairness for Ontario's consumers with respect to cellphone agreements."

The legislation would force wireless providers to put a cap on the cost of cancelling a contract and charge only what the government calls a "modest fee" for walking away from fixed-term contracts.

"The cancellation fees are grossly excessive, the automatic renewal features that are imposed on consumers are unfair and biased," said Liberal backbencher David Orazietti.

The Canadian Wireless Telecommunications Association warned that more regulations could end up increasing cellphone bills even more.

"An increase in the layers of regulations may have an effect on sales and marketing practices that could see costs rise for consumers," association spokesman Marc Choma said in an email.

"We would not want to see Ontario wireless customers disadvantaged in any way compared to residents of other provinces through the addition of expensive government bureaucracy that could possibly interfere with the price, choice and level of services."

The Public Interest Advocacy Centre welcomed the Ontario legislation to control what it called "unfriendly practices" in the cellphone industry, noting that Quebec and Manitoba are also taking action.

“We want a thriving rivalry in the wireless market, not one where customers are locked into plans and contracts that no longer serve their needs and are one-sided in favour of the provider, said Michael Janigan, executive director the advocacy centre.

The New Democrats supported Orazietti's previous efforts to lower the costs of cellphone services with private member's bills and said they would likely support this new legislation.

"We know that life is getting really difficult for everyday folks and unaffordable for people, and so anything that helps with the affordability of everyday life we’re interested in looking at," said NDP Leader Andrea Horwath.

Another key aspect of the new legislation will mean clearer prices for consumers before they sign a wireless contract, said Orazietti, who sponsored previous bills trying to rein in cellphone charges.

"The advertising aspect needs to include the highest, most prominent price, that’s got to be the most visible for consumers to understand the true cost of entering into these contracts," he said.

The bill would also require service providers to notify consumers when they are about to exceed the minutes in their contract before they rack up extra charges.

Orazietti said the federal government isn't taking steps to ensure there's real competition among wireless providers in Canada, so provinces like Ontario and Quebec are trying to do what they can to protect consumers.

"I say to the federal government the voluntary code of conduct is a farce, it’s insulting to consumers and it does not address the competition issue and the costs that consumers need to bear," he said.

"It gets back to a belief federally that there’s adequate competition. Clearly there’s not."

Ontario and Quebec are introducing legislation "where they have the Constitutional and legal authority to do so, which is around the (wireless) contracts," said Orazietti.

"I would suspect other provinces will follow suit and there will be an appetite in other provinces to take similar measures given the steps that Quebec has taken and that we’re taking."