Proposed Manitoba consumer mobile law modeled on Quebec’s

Manitoba's new mobile phone legislation put forward by Consumer Affairs Minister Gord Mackintosh reflects the desires of users to prevent carriers from making changes to their contracts unilaterally, industry insiders say. As part of Manitoba’s “Let’s Make a Better Deal” strategy, a five-year plan for stronger consumer protection, the provincial government says its new legislation includes seven new protections that will provide more freedom to mobile users. The proposed law, introduced this week, would begin by allowing cellphone customers to cancel contracts before the end of their terms; prohibit unreasonable cancellation fees; stop charges for services that can’t be accessed due to damaged or defective equipment; and end unilateral amendments to a material element of a contract if the change does not benefit the customer. “Manitobans have told us they are frustrated by high cancellation fees, unilateral changes to contract terms and prices, hidden charges and complex and unclear contracts,” Mackintosh said in a release. “They have asked for greater fairness and the ability to make informed choices and this legislation will make that happen.” Howard Maker, commissioner at the Commissioner for Complaints for Telecommunications Services, said in an interview that the bill's proposal to end unilateral amendments to a material element of a contract is an important aspect of the initiative. Maker said that when a customer signs a three-year contract with a service provider, for example, the provider gives itself some time to make changes that are not necessarily with the customer’s consent. “There’s a wireless code of conduct that has a provision that is supposed to limit this, but it isn’t clear,” Maker said. “So the ability of the provider or the carrier to make changes unilaterally is an essential piece of unfairness to customers.” For mobile service providers, the legislation would also require the minimum monthly cost to be included in advertisements and limit automatic contract renewals. Under the legislation, companies would also be required to fully disclose and explain all charges as well as terms to the customer. The law would enable the province's Consumer Protection Office to monitor industry practices to ensure compliance. Under the proposed law, any company found in non-compliance could face financial penalties ranging from $1,000 to $5,000 per breach. Businesses could also be charged under the Consumer Protection Act, suffering fines up to a maximum of $300,000. But Maker said that part of the legislation may need tinkering because of the way cellphone services are delivered. “At the end of the day, cell phone providers don’t work on the basis of contracts with each customer,” he said. “What they do with one customer, they do with thousands of others. So if a regulator or a court was to find that a provider was in practice of business that breached legislation, I don’t think we’d be looking at one count. We’d be looking at thousands of counts. It definitely changes the financial impact of the decision.” The Government of Manitoba said in a release that the proposed rules are based on 250 consumer and industry responses to a discussion paper released in December of last year, as well as a consultation with Quebec, the only other province to implement similar legislation. “It’s largely based upon the Quebec model, so it doesn’t have any surprises for carriers,” Jan Forster, acting director of the Consumer Protection Office for Manitoba, said in an interview Tuesday. “The key component is essentially ensuring customers have the information they need when they enter into a contract and also, to allow consumers to reasonably cancel their contracts if need be.” Bill 60, which became Quebec’s Consumer Protection Act, came into force on July 1, 2010. Under the province's new law, cancellation fees for mobile phones cannot exceed the discount the customer received when the phone was purchased. In cases where the phone was purchased without subsidization, the fee cannot exceed $50 or 10 per cent of the value of the unpaid services. In Quebec, companies must also give customers a minimum of 30 days’ notice before making changes to a contract’s terms or conditions. Under the legislation, a customer who does not approve of the changes can cancel the contract without penalty. Forster said Manitoba’s plan will seek to mirror what Quebec has already done. “The consumers have the right to cancel, and can cancel under the same rules as Quebec has,” she said. “So the early termination model is the same.” Forster said that, like Quebec, a carrier in Manitoba could make no unilateral amendments unless it benefits the customer. “Anything to do with price or service provided would be considered to be material changes,” Forster said of the proposed legislation. “So no changes to material provisions could be made to the contract unless it benefits the customer.” The major difference between the Quebec model and Manitoba’s is that, if changes to a contract benefit the customer, a Manitoba service provider can go ahead with the changes within a shorter notice period. “They have to provide notice to the consumer in advance,” Forster said, “and the change cannot reduce the supplier’s obligations or increase the consumer’s obligations.” Forster said the Manitoba legislation essentially seeks to make mobile contracts clear and understandable with important information provided prominently at the beginning of any mobile service agreement. “Minimum monthly costs—which would include all the main important costs that are ongoing regardless of use, that the customer has to pay—would have to be disclosed clearly in the contracts as well as in advertising,” Forster said. Forster added that she expects the new legislation to come into full force by spring 2012. dgrenier@thewirereport.ca

Proposed Manitoba consumer mobile law modeled on Quebec’s

News | May 17, 2011

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