New rules for cellphone contracts: What to be aware of

The country’s telecom regulator is holding hearings this week to discuss a new set of rules being considered for the cellphone industry.

The aim of the Canadian Radio-television and Telecommunications Commission, or CRTC, is to erect a common framework for carriers like Rogers, Bell and Telus to abide by and to protect consumers from enormous surprise charges many have incurred in the past as a result of not understanding their contracts or inadvertently going over their monthly plans.

A draft code has been proposed by the CRTC that companies and individuals are commenting on now, and it could come into effect within months. Here are some of the key provisions to be aware of – and ask about – the next time you’re signing up for a smartphone.

The Wireless Code of Conduct:

The draft code is broken down into a handful of broad categories ranging from the application of the code, its implementation and administration and most importantly, the code’s “contents” or specific rules. All rules are up for debate, what isn’t is whether they will be implemented.

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Contracts over the phone: So-called “distance contracts” or contracts entered into by a subscriber over the phone as opposed to in a retail store. Under the proposed code, a carrier must send complete details of the contract to a subscriber within 15 days while the consumer will have 30 days to cancel services without incurring early termination fees.

Use “plain language”: Key details of contracts like terms of use and privacy policies “must be written in clear, easy-to-understand language, and presented in appropriate font size,” the CRTC’s draft code proposes, rather than the dense legalese contained in cellphone contracts now.

The details: In the contract must be: device cost, monthly service cost, one-time costs, payment terms, change of contract terms as well as cancellation and renewal terms. In short, the relevant information for subscribers to avoid “bill shock” should be clearly conveyed.

Changing terms mid-way through a contract: If that occurs, like a rate increase for example, a consumer has right to cancel service without early termination fees. The carrier must give 30 days advance notice of a change, while 30 days is provided for customers to accept the terms, reject them or cancel service (without penalty).

Early termination fees: Will apply to the outstanding balance on a subsidized smartphone. Oddly, for unsubsidized phones, a termination fee of $50 will be charged or 10% of the monthly rate for unexpired months in the plan, whatever is lesser.

Written notices about expiring contracts: Contracts cannot be renewed or extended to a month-to-month basis unless expressly agreed to by the consumer. A notice must also be sent to the subscriber. 


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Advertised prices: The total amount consumers will pay per month must be clearly advertised , including a breakdown of taxes in the total.

The limits of unlimited: Carriers offering “unlimited” calls, texts or data must fully disclose whether services will be moved over to “limited” plans or downgraded if users surpass usage thresholds in their “unlimited” contracts. Carriers often advertise unlimited data for example, but if a user chews up more than five or six gigabytes of bandwidth before the end of the month, the speed of their services is degraded by the carrier to accommodate other traffic on the network.

Notifications: Though this is done voluntarily by the majority of carriers already, if not all, the CRTC is asking whether text messages sent to consumers to alert them when they’ve used 50 per cent, 80 per cent and 100 per cent of their monthly minutes, texts or data services be made mandatory.

The cap: Perhaps the most controversial of the proposals. The CRTC is asking whether overage fees for customers should be capped at $50 and services suspended on a phone once that total has been reached, unless the customer elects otherwise. Rogers called this measure potentially very “disruptive” to customers.

Unlocking phones: For subsidized devices, phones must be able to be unlocked or allowed to operate on rival cell networks 30 days after services have started at a rate set in the contract. Unsubsidized devices must be unlocked at any time the customer asks, at no charge

Who will enforce the code: Enforcement of the code will come from commissioner for complaints for telecommunications services (CCTS). The commissioner will have the power ask for an apology – or as much as $5,000 in compensation from a carrier.

How to file a complaint: Reach out to the CCTS, either on the commissoner’s website ( or by calling 1888-221-1687. You may also email , and or fax: 1877-782-2924. Lastly, try the mail: PO Box 81088,Ottawa, ON, K1P 1B1

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