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Sask. court certifies class-action cellphone suit
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CTV.ca News Staff
Date: Wed. Sep. 19 2007 4:53 PM ET
The lawyer at the head of a massive class-action lawsuit against Canadian cellphone companies said the service providers have become "addicted" to collecting unnecessary fees from customers.
"When the companies first had cellular service you had to have a wireless fee, and the companies got into the habit of charging this," Tony Merchant, the lawyer who initiated the suit, told CTV Regina.
"When they weren't required to pay the wireless fee, it was sort of like a crack cocaine that they were used to," he said. "They just kept charging, taking the money and mis-describing the money they were receiving."
A Saskatchewan court certified the lawsuit against Canada's cellphone providers on Tuesday.
The suit, first launched in 2004, alleges Canada's cellphone users are owed $12 billion plus interest for unfair "system access" fees collected over the years.
After two weeks of arguments from lawyers for the class action and the cell phone companies, the Court of Queen's Bench in Regina ruled Tuesday that the suit has enough validity to go forward.
It is described as the largest class-action in Canadian history, potentially affecting every cellphone user in the country. Currently, there are 7,500 complainants signed onto the suit.
"As a financial story for these companies it has an absolute blockbuster impact upon them. So if the industry has a judgment of $20 billion delivered, the impact would obviously be huge," Merchant said
The suit claims the companies are practicing "unjust enrichment" by charging the so-called "system access" or "licensing" fees.
Merchant maintains cellphone service providers have convinced customers the fees are required under federal regulations.
"They're gouging people. They're receiving money they ought not to receive and people believe they're paying it with good and just cause, and they're not."
The practice effectively allows companies to advertise lower prices, then boost the cost of cellphone plans through hidden fees, he said.
Here are the monthly subscriber access fees charged by Canada's major cellphone providers:
- Rogers Wireless: $6.95
- Telus Mobility: $6.95
- Bell Mobility: $8.95, after a recent $2 increase
An investigation by the Toronto Star several years ago revealed many employees of cellphone companies were incorrectly telling customers the fees were required by the Canadian Radio-Television and Telecommunications Commission.
While required by the CRTC when the cellphone industry was in its infancy, the fees are no longer legally required, but are still being charged.
The investigation also found the fees would generate about $800 million annually for the industry.
Merchant said that number is now closer to $1.3 or $1.5 billion.
Critics argue the fees are necessary in order to allow cellphone companies to continue doing business, and point out that the court's certification of the class-action suit doesn't mean the case has been deemed to have merit.
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No easy answer to this mess! The goverments of many nations have been over borrowing for years. People have not been much better. The old rule of you cannot spent more then you make applies to both. This whole thing is going to be a long, painful and bumpy ride. Unfortunately, no one will learn their lesson when this is over and we will be in the same perdicament 50 years from now. Most of the lessons from the Great Depression were not learned.
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Al Morrison
said
John & Margaret Beres
said
Kevin
said
Wendy
said
When I signed up with Verizon I asked how much the system access fees would be and Verizon said "what is that"?? Obviously they don't have them in the USA
I feel I am getting more value for my money now.
vav
said
Marilyn, BC
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Pat
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David
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Matt
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Gordo
said
As for pricing in Canada vs the US, it's not so simple. We have nowhere near the overall population density and customer base they have in the US, so we can't expect prices to be 'quite' as cheap. However, having sold cellphones under the Rogers and old Cantel/AT&T banners, I do agree that we pay far too much for stunningly inferior rate plans.
Pat
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Sue
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Dave Kent, Calgary
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The net effect is two long distance charges, even though the caller and I are in the same town.
L Hachey
said
Nick
said
Correct me is im wrong, but shouldnt "costs associated with the ongoing operation, maintenance and upgrading" be factored into the price that you are shown, and not made as a hidden fee?
show me the money
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a girl
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JB
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Gordie C.
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To me it makes no difference. My livelihood depends on a cell phone and if my airtime plan all of sudden increase by $5-$10 per month, I will grumble, but likely won't do anything about it.
Erick Johnson
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GF
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Yours Truly
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Ken
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Adam T
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A lot of corporate rate plans have the system access fee waived, like Bell Mobility coporate plans, so this siutation is just like any other consumer purchase, buyer beware. Shop around and find a plan that doesn't have the system access fee.
KB
said
Matt
said
Pay as you go, no fees and when they change the price, switch.
Started with Virgin mobile at $0.25/min, they jacked it up to $0.30, so I switched to PC at $0.20/min.
Both systems require a purchase of about $25 in airtime every two months, so I'm paying including airtime only about $15/month on average.
If you don't like your cell phone deal, switch and take your number with you.
Ryan
said
I have found that I can still get a decent rate plan from Virgin and I don't pay a monthly access fee.
Stephen QC
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That being said, the real issue is not that they charged these fees, but the lies they said to justify them. I hope the plaintiffs win the suit for the sole purpose of telling big corporations that we the consumers will no longer tolerate lies.
Jason
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Krista
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Marc
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Tom
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CH
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Lissa
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Mark
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