CTV News | Sask. court certifies class-action cellphone suit

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Sask. court certifies class-action cellphone suit

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CTV News: David Akin explains the massive lawsuit
CTV British Columbia: Chris Olsen looks at the charges on cell phone bills
CTV Newsnet: Tony Merchant, lawyer for plaintiffs
Canada AM: Tony Merchant, lawyer

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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.

Comments are now closed for this story

Mark
said

I don't buy the company's claim that the fees are needed. I Canada we pay far to much for everything, we get hit everywhere and it isn't going to fly anymore. If Canadian companies can't compete then I guess ones that can will fill their void. Simple as that. I am NOT going to pay more just so I can have a maple leaf beside the product and or service.


Lissa
said

I have worked at a cell company for customer service and was told during training that the fee was mandatory and not caused by the company. I've had a cell since 1998, wow, thats a lot of money out of my pocket for apparently no legal reason. hum...


CH
said

This validates the case for more competition in Canada's wireless market. Until then the customer isn't important to the 3 carriers...they own you.I went with FIDO several years ago because they were more competitive. Rogers didn't like that, so they bought them out.


Tom
said

Terrific! Force them to price fairly. Then force them to write plans the consumer can understand!


Marc
said

Let's get back our money!!! I'm on board!


Krista
said

How do I sign up...I want to add my name to the list of people on this class action law suit. I heard about this story when it first broke in 2004 and really hope all the cell phone companies that charge this get slammed....and we get our money back. I have had a cell phone for over 5 years...I am owed a huge amount of money!


Jason
said

I just signed up... 2 cell phones for over 10 years may equal big bucks. To sign up: http://www.merchantlaw.com/cellular.html


Stephen QC
said

This explains why I have no cell phone. It amuses me to no end to see people complain about high cellphone prices, but are not be willing to do without one.
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.


Ryan
said

I have always turned away from the big cell providers because of this.

I have found that I can still get a decent rate plan from Virgin and I don't pay a monthly access fee.

Matt
said

That's why I just don't pay them.
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.


KB
said

I believe that for this to really make a difference we need to on mass send our service providers e-mail messages demanding repayment. We are with Telus and sent them two messages this morning!


Adam T
said

This is ridiculous. Telecommunication companies have been charging system access fees and the consumer has agreed to pay the fees. Now people say that the fees are unfair?

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.

Ken
said

The only thing that is going to change here is that the "access fee" will simply be included in the base fee. As a result, all this changes is the advertising. You're still going to have the same phone bill every month.


Yours Truly
said

I think that the big companies have their behinds covered. If you look at the fine print on their website it specifically says that the fee is a non governmental fee. Trust me I'm sure they're covered and besides if the fee was eliminated the plans would just increase in price to match.

GF
said

How do I sign up for this cause.


Erick Johnson
said

I saw a commercial from Buffalo NY by the cell company Cricket. $25 per month, unlimited local, text, pictures, and Internet access. UNLIMITED for $25 !!! For something similar here, it's over $150 per month.


Gordie C.
said

I admit, it was a poor way of the cell providers to suck more money out of your pocket and because of that, they deserve to be sued. But be careful. Don't expect this fee to ever be eliminated. At some point in time, you can perhaps see this fee "eliminated" but then simply build that $6.95 into the cell plan. Now all of a sudden a $25 airtime package will soon be a $30 - $32 airtime package...with no system access fee.

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.




JB
said

I agree that consumers are getting gouged. It's time we consumers let our voice be heard. After all these faceless Corporations would be pennyless without us! Through strength in numbers the consumers could ultimately govern the Corporations, not the other way around! ...

a girl
said

That's what businesses are here for, to make profit, but when you're talking about billions of dollars .. then that's a bit outrageous since they gouge you paying for additional features like text messaging and voicemail etc on a monthly basis.


show me the money
said

If they need money, then maybe they should do like all other organizations, FUNDRAISING.


Nick
said

Rogers states on their website "The system access fee is charged to help cover the costs associated with the ongoing operation, maintenance and upgrading of the wireless network."
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?


L Hachey
said

This is great that we have lawyers that won't step away from a lawsuit as big as this to help stop companies from gouging innocent customers. I have had a cell phone for 10 years and it will be nice to receive x amount of dollars owed by them back. This will hopefully stop other companies from doing the same sort of illegal gouging or hopefully make them think twice about it. I think the big problem has to do with companies as big as these never really being challenged so this enables them that much more. But, thumbs up to the lawyers handling this case. Hopefully justice will follow. I will be watching the news closely to keep an eye on things.I would also like to sign the petition if it is possible.


Dave Kent, Calgary
said

They also gouge us on long distance. For example, I take my Calgary cell phone to Vancouver. To call my cell from Vancouver, a caller must dial 1-403-etc., thus incurring a long distance charge. Then, when my cell rings, the call is coming from Calgary, so I get a long distance charge on my cell bill.

The net effect is two long distance charges, even though the caller and I are in the same town.



Sue
said

How does one sign up for this?


Pat
said

Fees are one thing and the need not be to make these companies billions. They also charge harendous roamimg fees. These charges are also hidden.You do know you will be charged roaming fees when you purchase the phone and contract. The hidden part is the cost!!!! Telus providers for their roaming has not been researched by them nor passed on to contract holders. Sasktel is way cheaper with their roaming fees and are listed in detail on your bill including where call was made from ,date and time. Telus gives you a price listed under roaming fees no detail!!


Gordo
said

Adam T, it's the point that people were misled in the requirement to pay the fees by being convinced they were required under federal legislation. They were under a true and proper belief that the fees were in addition to the price paid for their plan. It amounts to, on average, a surcharge of 25% every month. If you were told you had to pay an extra $5000 on your $20000 car due to federal requirements, and this is in addition to taxes, you'd pay it too. If you later found out it was misrepresented to you, you'd demand it returned as well!

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.


Matt
said

I worked customer service for Nextel (American cellphone) just before the Sprint merger, and they charge the same type of fee. I wonder if it's the same in the US?


David
said

I'm working for a Big cell phone provider and the problem his that on the service agreement that the customer sign at the purchase the cell phone mention system acces fees but no price his mentioned(for the provider i work for)...the big problem his the way dealer want u to purchase the cell phone a quick as possible...doesn't suggest to u to read the contract and as soon as u leave the store u're missinformed and stuck whit a contract...the lawsuit will do nothing exept having cell phone provider have a bigger contole what will be told by dealers to sell a phone...and by the way...on a prepaid cell phone u pay system acces fees on u're prepaid balance.


Pat
said

I want to see which one of the big 3 cut the fees first (in good faith)! This provider would tend to put the customer first by suspending these fees until the courts settle it... hmmm.


Marilyn, BC
said

I hate being ripped off by the "big guys". It would be great if they got rid of the fee and gave it back to us. However they will find a way to add it to the cost of our plans which shouldn't be allowed. If they win the law suit it should also state that the providers can't add that amount back into our plans!


vav
said

I lived in Europe for 3 years and cell phone use over there is very popular. By comparison, we are getting gouged over here. Over there, you don't pay for air time when someone calls you, just your own minutes, your long distance charges,(which were a lot cheaper as well),no access fees, no hidden charges, it was great.


Wendy
said

I really switched. My husband and I now have two Verizon cell phones with the North American plan where we can call all of Canada, USA, Hawaii, Puerto Rico and Mexico 24-7 with 4100 minutes for virtually the same price as our Telus cell phones were costing us (for 100 anytime minutes on one phone and free nights and weekends in B.C. and Alberta only on the other phone)
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.


Kevin
said

I say they should go after those long distance "administration" fees charged by the Telcos next.


John & Margaret Beres
said

Actually on our Telus family plan we are paying access fees of $7.45 per phone for a total of $14.90 per month, but I believe $1.00 of that is the 911 access fee. Would love to not have to pay that amount extra.


Al Morrison
said

I think this is great news. If the mobile phone companies were being underhanded about the fees; then yes, they should be sued. But, as many other people have stated, the companies will make their monthly airtime packages more expensive. They would have to do this, since if they will not get revenue from the access fee anymore, it will greatly hurt them financially. We should also perhaps think of how many people might lose their jobs if they do stop charging the fee and keep the plans at the same rate!? I think the whole industry should be regulated.






















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