Ontario: Liberal Government Seeks to Introduce New Rules for Wireless Contracts and Services for Fourth Time

Update:

 Ontario’s Liberal government is set to reintroduce a wireless consumer protection bill that it says can co-exist with a national code for cellular service providers scheduled to be in place this summer. Similar to laws passed in Quebec, Manitoba, Newfoundland and Labrador and Nova Scotia, the proposed act would legislate “plain-language” cellular contracts and cap the costs of cancelling fixed-term agreements at $50.
This will be the fourth (4th) time that the Ontario’s Liberal government will attempt to implement a “Wireless Consumer Protection Bill”.  Ontario lags behind other provinces (Quebec, Manitoba, Newfoundland and Labrador and Nova Scotia); even the CRTC has laid out a national wireless code it hopes to release this summer. 
Similar to laws passed in Quebec, Manitoba, Newfoundland and Labrador and Nova Scotia, the proposed act would legislate “plain-language” cellular contracts and cap the costs of cancelling fixed-term agreements at $50.

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Ontario intends to introduce new legislation that would, if passed, create new rights for cell phone and wireless contract consumers.

Full Disclosure of Goods and Services

The legislation would, if passed, help consumers understand exactly what they are contracting for.

  • Providers would need to clearly explain which services are included and which would result in added costs, how services can be accessed, and what rates and restrictions apply (for example, if a long-distance plan is within Ontario only)
  • Contracts would need to include the retail value and the actual cost to the consumer of phones provided free or at a discounted price
  • Suppliers would be obligated to disclose manufacturer’s warranty information on a phone if the supplier offers supplemental warranty coverage
  • Information on how cancellation fees are calculated would have to be included in the agreement
  • Companies would have to provide clear information on how roaming costs are calculated and when they will be incurred, and whether a cell phone is locked, for how long, and the cost, if any, to unlock it

Comprehensive, Easy-to-Understand Agreements

The proposed legislation would, if passed, ensure contracts include clear disclosure of key terms consumers can understand. Companies would have to provide an agreement in a form that a consumer can keep, such as an electronic document that can be printed.

If a copy of the agreement is not provided to a consumer at the time it is signed or the company does not make all the disclosures the legislation requires, including all the key terms of the contract, a consumer would have the right to cancel the agreement within one year of signing and the company would need to refund all payments made under the contract to the consumer.

Consent

The proposed legislation would, if passed, require companies to have a consumer’s consent if a fixed-term contract is to be amended, renewed or extended. This means consumers would have to agree to any change to the agreement before it is made.

Automatic contract renewal of a fixed-term contract would no longer be allowed. Consumers would be protected against loss of service by permitting fixed-term contracts to become month-to-month contracts on the same terms of their expired fixed-term contract. Consumers would receive copies of all amended or renewed agreements.

All-Inclusive Pricing

Under the proposed legislation, wireless services providers would have to include the total cost of an agreement in any price advertisements so prices are transparent. This means that the all-inclusive cost would need to be the most prominent price information shown in the advertisement.

Cancel Agreements at Any Time With Caps on Cancellation Fees or No Fee at All

The proposed legislation would, if passed, give consumers the right to cancel a wireless services agreement at any time by giving notice to their provider. The cost to cancel would depend on the type of agreement.

Type of contractIs cell phone provided free or at a discount?Cancellation Charge
Month to monthNo cell phone provided$0 maximum.
Cell phone provided free or at a discountCustomer could be required to pay back a proportion of the value of the discounted phone; e.g., the consumer gets a cell phone valued at $200 for free, for a one-year contract.  If cancelled after six months, the consumer would need to pay $100.
Fixed-termNo cell phone provided10 per cent of price of outstanding services up to $50 maximum.
Cell phone provided free or at a discountCustomer could be required to pay back a proportion of the value of the discounted phone; e.g., a $500 phone provided at $100 ($400 discount), for a one year term, the cancellation cost would be calculated based on the time remaining in the agreement. If cancelled after three months, the consumer would owe $300.

Unacceptable Billing

Under the proposed legislation, consumers could not be charged for services they could not access because their hardware was being repaired while under warranty. If a customer received a loaner phone while their phone was being repaired, the loaner phone would need to be provided free-of-charge. This would not apply to phones that are not covered by warranty.

Protection Against Wrongful Billing

The proposed legislation, if passed, would see no charges billed to a customer for use of a lost or stolen phone after the reported lost or stolen date.

Ontario is taking steps to ensure that consumers are provided with clear information and fewer surprises when they enter into cell phone and wireless services contracts.

The province intends to introduce legislation that, if passed, would make it easier to understand the costs and terms of wireless services contracts.  The legislation would also ensure wireless services providers are clear with information before contracts are signed.

The proposed legislation, if passed, would benefit wireless consumers by:

  • Requiring contracts to be written in plain language
  • Ensuring contracts clearly outline which services come with the basic fee, and which would result in a higher bill
  • Requiring providers to get consent from the consumer before amending, renewing or extending a fixed-term contract
  • Enforcing a cap on the cost of cancelling a contract or no fee at all, making it less expensive for consumers to walk away from fixed-term contracts

These proposed reforms would protect the rights of consumers while furthering the new Ontario government’s commitment to building a strong economy and a fair, safe and informed marketplace.

Quick Facts

  • Approximately eight out of 10 Ontario families have a wireless services agreement.
  • Overall complaints to the federal Commissioner for Complaints for Telecommunications Services overall have more than tripled over the past four years.
  • A recent survey by OpenMedia.ca compiled the opinions and complaints of 2,800 cell phone users who called for an overhaul of the cell phone market.
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