New Code of Conduct Says You Can Reject Cellular Contract Changes Or Cancel Without Fees
So here is an interesting development.
According to an entry on the Financial Post, Canada’s wireless phone companies, which include Rogers, TELUS, Bell, the new carriers and all the little guys, are going to begin to allow customers to refuse material changes made to their wireless plans while that customer is still under contract. Either that, or you can leave the contract without paying any cancellation fees whatsoever.
This article has a lot in common with our recent coverage of terrible Rogers/Fido news (1,Â 2,Â 3,Â 4,Â 5,Â 6,Â 7,Â 8, 9, 10, 11, 12, 13, 14, 15) and the Condition 15 news on your contract that allows you to reject a change, but only one time. In other words, it seems that something is actually being done here that will help the customer, but looks can be deceiving.
This also carries vibes from similar moves made by Sprint and T-Mobile earlier this year. Sprint had increased the price of their administration fee and then allowed customers to cancel their contracts cancellation fee-free within a certain time frame. If customers did not cancel during that time, they accepted the change. Similarly, T-Mobile recently increased their overage rates and then allowed customers to cancel their contracts cancellation fee-free within 14 days from the effective change date.
The most interesting thing about the Sprint/T-Mobile moves is that when they were making these price increases, they offered their customers a way out immediately. Contrast that with Rogers/Fido, who collectively have made approximately 15 price increases over the last few months and have given their customers no flexibility.
But looking back at the article, if you dig a little deeper, you will notice some not so good news. Apparently during the Code of Conduct negotiations, Industry Canada refused a tool that was designed to protect wireless customers because of pressure from the Wireless Industry. The tool was an online calculator that compared prices on plans across all of Canada’s Wireless Carriers but the Wireless Carriers were worried that the calculator would promote cheaper plans. So the Carriers engaged in some lobbying and got that tool destroyed.
You can check out the piece of the article below:
“The announcement comes as reports surfaced this week that plans on another tool designed to protect wireless customers were scuttled by Industry Canada allegedly because of pressure from the industry. University of Ottawa law professor Michael Geist reported on his blog on Monday that an online calculator that would compare prices on plans across carriers was axed in June after federal officials met with the CWTA.”
“Prof. Geist wrote that “intense lobbying” from certain carriers, which were concerned that the calculator would promote cheaper plans, resulted in it being dropped.”
However, with this new Canada-Wide Cell Phone Code of Conduct, it would seem initially that things are going to change for the better. Who doesn’t like the idea of refusing changes or ending your contract without a cancellation fee? As good as this sounds, there is an underlying truth in the Code and the new Code raises two concerns for me.
Code of Conduct Flaws
First, the wording of being able to refuse the changes or cancel the contract is somewhat unclear. For example, if Rogers makes a change that increases a price and you call to refuse it, does that mean you get what you asked for or does Rogers simply ignore you, leaving your only choices as deal with it or cancel the contract? As many of you have read regarding Condition 15 on your Rogers Wireless Contracts, under that Condition you can refuse a change once. So this new Code of Conduct could presumably extend that to an unlimited number of contract change refusals.
Second, what stops a customer from signing up with Rogers, getting an iPhone at promotional pricing of $199, then Rogers increases its rates, so that customer cancels and takes their new iPhone with them. Then they go sign up with TELUS, and repeat the process. Then with Fido and repeat the process. If anything, this new Conduct seems to possibly serve as a method for people to easily take advantage of promotional priced handsets from the various carriers. But I have yet to expose you to the truth (more on that later) beyond this Code of Conduct and why this promotional-pricing flaw will not work.
Good News?…Not So Much
But as you may have expected, this new Code of Conduct is not anything new. If you read through the fine print, you will clearly see that this “new” Code of Conduct is nothing but regurgitated information that is already in use and being enforced by the Wireless Carriers of Canada.
For example, according to the Code of Conduct, this is what Wireless Carriers must explain to customers either at the point of sale or on their websites:
- Monthly base charge for the plan;
- Number of airtime minutes and/or data usage included in the plan;
- Rates for additional minutes or data usage;
- Rates for optional services, such as long distance calling or text messaging, that may be added to your service;
- Notice that roaming charges may apply within and outside Canada;
- Any additional taxes, fees or surcharges that may apply;
- The duration of any service period (if required), any activation fees that may apply, any early termination fees that may apply; and the
- Terms of a trial period, if one is available under the plan.
Guess what? All of that information is already explained at the point of sale or at the carrier website. So what exactly is the point of telling people and the wireless carriers something that both parties already know?
However, the most disturbing piece of fine print from the Code of Conduct lies in the next quote:
To continue to meet this commitment, the member carriers of the CWTA promise to:
Protect our customersâ€™ rights when we must change contract terms
We do not change the material terms of our contracts with customers, without giving them at least 30 daysâ€™ notice. In the case of such material changes that are unfavourable to customers, we either give them the right to terminate the contract without any additional fees for early termination, or allow them to remain on the unchanged contract. This does not apply to changes that are required by law or regulation or changes to those services and features that do not have a fixed term commitment.
The Truth Will Set You Free…Maybe Not
If you read through the above quote, you will notice three things.
First, the carriers are now required to give a customer at least 30 days of notice before materially changing a customers contract. The definition of “materially” in this case is unknown. However, it is worth noting that this is common practice with Wireless Carriers today, since any changes made to your actual price plan ($25 per month), and not add-ons, is made aware to you.
Second, if a customer disagrees with a contract change, they can refuse the change (presumably for an unlimited amount of changes) and continue on an unchanged contract or end their contract without any cancellation fees. Again, it is worth noting that this is partially in place today with regards to the refusing changes part, but as it stands today (with Rogers at least) you can only refuse one time. In terms of a cancellation fee, up until this Code of Conduct, you were paying a cancellation fee if you cancelled early.
The third part, and the most disturbing part, is that the new option of allowing customers to refuse a change or cancel their contract sans cancellation fee only applies to services that are under a contract. In other words, any changes to a wireless contract that do not have a contract attached to them can be changed at will.
The point here is that this is already what wireless carriers are doing. They are increasing prices on non-contract services and not touching contracted services because they cannot. This is due to the fact that contracted services are protected under a contract.
The only services that your contract protects in regard to wireless services is your base price plan (so your $25 base voice plan for example) and any data plan contracts. Your contract does not protect non-contracted add-on services such as CallerID, Voicemail, Text messaging, Value Packs, Roaming, Overage minutes, System Access Fees and so on. These listed services that do not have a fixed term commitment are not covered by this Code of Conduct. The only services that are covered by the Code of Conduct are ones that have a contract on them. This renders the Code of Conduct useless since your wireless contract already protects you from any changes by your Wireless Carrier to your contracted services.
If you are confused about what exactly constitutes a contracted service, simply understand the following:
- Any aspect of your wireless plan that can be added and taken off at your discretion and these changes cost you no cancellation fee, is a non-contracted service.
- Any aspect of your wireless plan that can be added and taken off at your discretion and these changes cost you a cancellation fee, is a contracted service.
Wireless Carriers today cannot change your contracted services without your consent but they can change everything else that is on your account that is not covered by a contract. So in the end, this Code of Conduct simply brings to light the same practices that Wireless Carriers in Canada are already doing. If anything, this Code of Conduct is simply listing the proper business practices that Wireless Carriers in Canada should be engaging in, but the fact of the matter is that every single Canadian Wireless Carrier is already doing all of the things that this “new” Code of Conduct requires.
In the end, this Code of Conduct does absolutely nothing for the customer or the wireless carrier. The only action that may come from this is a price increase to wireless plans from Canadian Wireless Carriers. The reason for this is because now customers have a choice to reject any possible future price increases to their own contracted base price plans. But how are price increases different than any other day with Canadian Wireless Carriers?
In other words, nothing has changed. Thanks for playing.
(Thank you to iPhoneInCanada reader SeanAhronson for the tip)