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Non-refundable deposits and fine print a violation of CRTC’s Wireless Code, consumer groups complain

OTTAWA – The Public Interest Advocacy Centre (PIAC) and the Consumers’ Association of Canada (CAC) today filed a joint application challenging wireless device deposit programs offered by Rogers and TELUS.

The Rogers “NEXT” and TELUS “T-Up” programs require subscribers to pre-pay a monthly fee in addition to their usual service charges for at least 12 months. These payments, which range from $17 to nearly $30 a month, go toward the partial cost of a new cellphone. If the customer stays subscribed and returns their old phone and signs a new two year contract, then they receive a new phone at a discounted rate and any balance owing on the previous cellphone is forgiven. 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.

PIAC and CAC challenged this practice, arguing that it violates the CRTC’s Wireless Code, and asking that the Commission order that all deposits be made fully refundable, with interest, at any time, and that Rogers and TELUS return any fees from previously cancelled deposit plans.

“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“, said John Lawford, PIAC’s Executive Director and General Counsel.”

Bruce Cran, President of CAC added that: “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.”

The Public Interest Advocacy Centre (PIAC) and the Consumers’ Association of Canada (CAC) joint application to the Canadian Radio-television and Telecommunications Commission challenging wireless device deposit programs offered by Rogers and TELUS is available at this dropbox link.

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For more information:

John Lawford
General Counsel and Executive Director
Public Interest Advocacy Centre
(613) 562-4002×25
(613) 447-8125 (cell)

Bruce Cran
Consumers’ Association of Canada


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