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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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I applaud the budget, even though Health Care and education may stay unscathed. Sadly this cannot last and I worry to later this year where cuts will become enviable. If anything, this provides the Wildrose Alliance plenty of ammo when an election is called.


Comments are now closed for this story
Mark
said
Lissa
said
CH
said
Tom
said
Marc
said
Krista
said
Jason
said
Stephen QC
said
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 found that I can still get a decent rate plan from Virgin and I don't pay a monthly access fee.
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.
KB
said
Adam T
said
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
Yours Truly
said
GF
said
Erick Johnson
said
Gordie C.
said
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
a girl
said
show me the money
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?
L Hachey
said
Dave Kent, Calgary
said
The net effect is two long distance charges, even though the caller and I are in the same town.
Sue
said
Pat
said
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.
Matt
said
David
said
Pat
said
Marilyn, BC
said
vav
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.
Kevin
said
John & Margaret Beres
said
Al Morrison
said