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Ontario’s ‘Wireless Services Agreements Act’ to Protect Cellphone Users Now in Effect

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Ontario’s new Wireless Services Agreements Act went into effect on April 1 and the legislation aims to protect cellphone users that have signed or renewed contracts as of the first of the month. The new law will protect customers by the following, according to The Star:

  • service contracts for mobile devices must be written in plain language
  • cancelling a fixed term contract is capped at $50; companies must seek customer permission before amending, renewing or extending contracts
  • carriers must show minimum monthly service charges in ads and also show all-inclusive costs
  • customers can cancel contracts two years without charges, aside from repaying hardware subsidies

Update: Clarification on the cancellation part of the Act:

Same, fixed term agreement

If the consumer cancels a wireless agreement with a fixed term and in respect of which the supplier provided no goods to the consumer free of charge or at a discount, the maximum amount that the supplier may charge the consumer as a cancellation fee is the lesser of,

(a)  the sum of $50; and

(b)  an amount representing not more than 10 per cent of the price of the services that were provided for in the agreement but not supplied by the date of cancellation, calculated as if the term of the agreement were 24 months.

Essentially this law complements the existing CRTC wireless code, says Ontario’s Minister of Consumer Services, Tracy MacCharles:

“Ontario has enshrined the rights of cellphone, smartphone and tablet users in legislation — not a code,”

The differences with Ontario’s legislation is its ability to enforce laws versus the CRTC wireless code. The province will be able to lay fines up to $50,000 for individuals and $250,000 for companies.

Ontario joins Quebec, Manitoba, Newfoundland and Labrador and Nova Scotia in enacting similar cellphone protection legislation, following consumer complaints in their dealings with wireless carriers.

Bernard Lord, CEO of the Canadian Wireless Telecommunications Association, said during hearings on the CRTC code last year added costs would be passed to consumers with so many provincial laws and regulations when it comes to wireless use:

“Every layer of regulation you add, adds cost. And eventually that cost is paid by someone and that someone usually ends being the consumer,”

Bruce Cran, president of the Consumers’ Association of Canada said federal rules would supersede provincial laws in cases of disputes; he also mentions the new law could confuse wireless users as they will be unsure where to direct complaints and who has jurisdiction over the laws.

Ontario had plans to introduce the consumer cellphone protection legislation dating back to 2012.

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  • George

    so if I made a change to my plan today, causing the contract end date to extend 2 years, I can go ahead and cancel it for $50 shortly after?

  • miggy_smalls

    so, I can sign up for a 2 year contract and get a 32GB ip5s for $329 + $50 cancel fee, compared to off-contract $819 (all before tax)? Net savings of almost $500.

  • MrXax

    I’m confused. The 2nd and 4th points above seem to contradict each other. Which is it, a $50 cancellation fee, a fee to cover the balance of hardware subsidies, or both?

  • This is the language from the Act:

    If the consumer cancels a wireless agreement with a fixed term and in respect of which the supplier provided no goods to the consumer free of charge or at a discount, the maximum amount that the supplier may charge the consumer as a cancellation fee is the lesser of,

    (a) the sum of $50; and

    (b) an amount representing not more than 10 per cent of the price of the services that were provided for in the agreement but not supplied by the date of cancellation, calculated as if the term of the agreement were 24 months.

  • FragilityG4

    The cap at $50 is deceiving … That’s for the monthly voice/data amount NOT the subsidy on your device. The subsidy must be paid back with the $50 if there is remaining term on your voice/data.

  • Bobby

    To clarify for everyone, you are either liable for the lesser of 50 $ or 10 % of the remaining services to be billed on your 2 year term OR, if you received a subsidized phone, the value of the subsidy remaining. In other words, if you got a iPhone 5s for 230$ you got a 500 $ subsidy over 24 months, if you cancel after a year you would only be liable for 250 $, you would NOT be liable for 50 $ + the subsidy. On the other hand, if you signed up for 24 months without getting a phone subsidy (ie you already had a phone or purchased one outright) but were given a promotional price on your monthly services then if you cancel after a year you would be liable for the lesser of 50 $ or 10 % of the remaining services to be paid (ie if you had a 50 $ a month plan, than 10 % of (12×50) 600 $ would be 60 $….so you would pay a 50 $ penalty).

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