Consumer Groups: Rogers, Telus Violating Wireless Code with Non-Refundable Deposits

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The Public Interest Advocacy Centre (PIAC) and the Consumers’ Association of Canada (CAC) claim Rogers and Telus are violating the CRTC Wireless Code with their non-refundable deposits. Both groups filed a joint application today to the CRTC challenging both carriers.

The two programs in question are the Rogers Next (announced this Feb.) and Telus T-Up (from last Sept.) programs, which both require subscribers to pay monthly fees on top of their regular wireless charges over a period of 12 months. These programs allow customers to pay into a service which allows them to upgrade to a new phone earlier than usual.

Here’s the part the PIAC and CAC says violates the Wireless Code:

However, a key element of these programs is that the fees paid into them are non-refundable. A customer will lose any money already paid towards the new cellphone if he or she wishes to switch service providers and will still have to pay off any remaining balance on their old phone to switch companies.

The 42-page application filed to the CRTC notes the specific part below about the Rogers Next program, which is says “is to increase the costs of cancellation to the customer beyond what is owed on the device subsidy,” and basically it applies to Telus as well:

What that means is if a customer cancels their enrolment in the plan, any waived fees (notably the Flextab balance) are reinstated. The potential cost, therefore, of switching away from Rogers once enrolled in the RN Program, using Rogers’ comparison, is, after twelve months actually, $359.88 (twelve months of RN fees) plus the outstanding device subsidy ($250). We repeat: The effect of the RN Program is to increase the costs of cancellation to the customer beyond what is owed on the device subsidy. We contend, as explained below, that this is a violation of the Wireless Code’s rules on early cancellation fees (Wireless Code, Section G).

Both consumers groups are asking the CRTC to make Rogers and Telus refund all deposits with interest at any time, plus have both companies return fees from previously cancelled deposit plans.

John Lawford, PIAC’s Executive Director and General Counsel said in a statement “The fees imposed by these programs, by virtue of being non-refundable, act as a termination fee, and prevent people from switching service providers. That’s against the letter, and the spirit, of the Wireless Code which exists to protect consumers, and also to ensure customers do not face unreasonable limits on their ability to switch.”

Bruce Cran, President of CAC further added “These programs convince people to throw good money after bad, and lock customers into a perpetual cycle of contract renewals with their current service provider, which lessens wireless competition and consumer choice.”

Anyone out there part of the Rogers Next and Telus T-Up programs? What are you thoughts on this?