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Nova Scotia wants to free those who “feel trapped” in their contract, proposes a $50 cap on cellphone cancellation fees


Nova Scotia seems to riding along the trend of changing up legislation to protect wireless customers who “feel trapped in their cell phone contracts.” We’ve seen other provinces announce similar changes, which later became law, such as Bill 60 in Quebec and recently Bill 35 in Manitoba (effective September 15th).

Today, Service Nova Scotia and Municipal Relations Minister John MacDonell proposed amendements to the Consumer Protection Act that will see it mandatory for carriers to advertise the minimum monthly costs of a wireless plan, plus the highlight of the changes includes capping the cancellation fee at $50. The complete list of changes are below and – if passed – would only be valid for those who sign a contract after the regulations go into effect.

Here are MacDonell’s suggestions:
- letting customers cancel their contract at any time, and limiting contract cancellation fees to no more than $50. Customers will still be responsible for buying out their equipment if they cancel the contract early.
- restricting automatic contract renewals or extensions
- requiring cellphone service providers to include consumer protection information on responsible cellphone use and cyberbullying with the service contract

MacDonell stated that “Nova Scotians have told us they feel trapped in their cell phone contracts and they want changes that removes hidden fees or price jumps and allows them to switch providers if they are unhappy with the service without heavy penalties. Today’s legislation will provide people with what they are asking for and will give clear and informed options so people can choose what’s right for them and their family.”

Source: Nova Scotia

  • lukeiphone

    Make it nationwide! Canada is the only country with 3 year contracts. How sad.

    • DaRazorback

      I wish my fellow Canadians would stop believing they are the only country with 3 year contracts!!! I know it is hard to believe, because down in the states and over in most of Europe 3 year contracts are illegal. However, there are many other countries that have 3 year contracts. Look in Asia and in South America and you will see most have 3 year contracts too.

      And I repeat, “CANADA IS NOT THE ONLY COUNTRY WITH THREE YEAR CELL PHONE CONTRACTS!!!”

    • david

      @DaRazorback:
      Canada IS and the ONLY contry in this World still have a 3 years contract moron. Get out of the cave and look around you. Did I already said that you are a moron?

    • DaRazorback

      @David

      YOU ARE WRONG!!! I lived in Chile for the past three years. And not only do they have three year cell phone plans, but I just checked on Claro Chile’s website, and I have a great example for you. The Galaxy Note is available there. To buy the phone for “ONLY” a little over Canadian $700 you would have to pay “ONLY” about Canadian $125 per month on a THREE YEAR TERM!

      NICE TRY HOTSHOT, NEXT TIME TRY TO ACTUALLY KNOW WHAT YOU ARE TALKING ABOUT!!!

  • Keith

    It’s a start but the biggest thing I want is a fair reduction in my monthly plan if I bring my own phone. Smartphone operating systems and the phones will be rapidly evolving for a while now and until the technology matures some I have no intention of keeping my phone for 2 years let alone 3. Make the contracts optional and stop the price collusion currently going on.

    • StephenBB81

      Keith Rogers has a “No Contract plan” I saw in the store for people who bring their own phones in, and it is sub $30 voice&data,
      I’m planning to move to it shortly with my second line

    • Keith

      @StephenBB81,

      I wasn’t aware of that plan; I’m going to look into it. It would also solve my problem of how to get an unbranded Lumia 900 in Canada.

    • StephenBB81

      @Keith
      I can’t find the plan on line, but it is at my Local Rogers store on a poster board, 1 side is family plans, the other is NO CONTRACT plans availble for all smartphones including blackberry’s at a very tempting rate,

  • David

    20 years later we’re finally getting somewhere. Partial ‘Thank You’ goes to Mobilcity, Wind, and Public for contributing to accelerating chance.

    But honestly, the termination of contract shouldn’t cost a penny over the price of a phone. Now THAT would be fair!

    • StephenBB81

      I’m sorry how the F is that fair?
      There are costs associated with contract cancelation for the Carrier.
      The Carrier uses contracts as means of securing capital with a resonable guarentee of cashflow coming in,
      I very much want to see a limit put on how much they can charge, as the current limit is a lot, I think $50 + buying out the remainder of your phone value is very fair, though it needs to be written how the phone value is caluclated, a 1 year old phone is not still valued at the $600 price tag – the $99 you paid at the start of the contract.

    • Jim R

      I believe Rogers charges $12.50 to cancel a contract – which seems much more reasonable to me than $50. So, if Rogers can do it for $12.50, why should $50 be considered the “fair” price?

    • Pegger

      How do you figure it’s not fair? That’s the whole point of contract is to get some commitment. If you don’t like it don’t sign it in the first place. And if you do, don’t whine to be getting out of it after.

      I agree the cancellation fees are ridiculously high but there should be a fee associated.
      Rogers and Telus have already changed their policy on cancelling contracts. With Rogers I think it’s a $12 fee plus paying out the remaining subsidy.
      Your phone may not be worth what it was when you bought it but you still need to pay the full ‘remaining’ subsidy.
      If they gave you a $500 subsidy on 3 year term. Divide the $500 by 36 month term, to get the subsidy per month. Then multiply that by the number of months remaining. That’s what you owe on the phone.

    • Darryl

      …and this is my problem why? If a carrier is leveraging contracts for the purpose of additional financing that’s a gamble that they are taking that maybe they shouldn’t. Maybe they should secure financing through other means. But in truth what does Rogers, Bell, Telus need additional financing for?
      These are the fairy tales they tell the sheep so that they keep over paying for ridiculous contracts. If it wasn’t for Wind/Mobilicity/Public, the sheep would still believe that $40 unlimited everything, was still impossible.
      Only in canada do we say, take out money, PLEASE!

    • David

      How is it NOT fair?

      Rogers is perfectly fine with $12.50 that they have going on now. It’s a nominal admin fee, and something that is much more realistic, and easier to swallow.

      What would those $50 do in terms of cashflow, really? Most Rogers users pay more than that in a month, so $50, in reality, is only a fraction of a monthly income from a customer. Your justification for charging $50 does not have a foot to stand on.

    • HO

      @StephenBB81 …..WOW, aren’t we the douchebags working for Robbers or any of the Big3???, what kind of fkn costs are u speaking of?, tossing the paper contract on the shreder?, finding the account to delete it in the system?, finding the SIM card number in the system to stop the service?

      Is different to pay for the phone, that’s correct, make sure u add unlock in the mix, but charging for the rest is BS.

  • Sean

    “Get the New Galaxy S III only $599 on a three year term”

    All seriousness aside Canada either needs to really change the ETF to one more fitting of the customer or but in two year contracts with the current ETF’s

    • ns.dev

      If that happens (good chance with our carriers) I can see AT&T making a huge amount of money on cross-border hardware sales.

  • ns.dev

    I also think carriers should be required to disclose the subsidy at contract signing (ex $500 or 13.89/mth on 3-year) that way the consumer can easily calculate the cancellation charges for their particular situation.

    • ns.dev

      I by calculate I mean if there was 6 months left on contract charges would be $133.33 ($13.89*6 +$50) NOT $550

    • ns.dev

      “I by calculate I mean” = “and by calculate I mean”

      TGIF!

    • Andrew

      I don’t know about the other carriers, but Telus already does this. At any time I can log into my online account and see what my current device balance is, how many months remaining in my current contract, and can also show me what the cost would be if I were to upgrade to a different phone.

  • Haligonian

    They should also cap the length of the contract at 2 years. I’m sure many people would gladly pay a little more for the phone up front to shave a year of their contract. It would be nice to have a reasonable option in between a 3 year contract and buying a $600 phone outright instead of the ridiculous ~50 hardware discount that the carriers give for signing a 2 year agreement.

    • Haligonian

      That’s supposed to read ~$50 hardware discount.

  • Vineet

    @lukeiphone: I totally agree with you, it should be applicable Nationwide.
    Next thing I want to see in Telecom industry is early device upgrade option. Freedon to buy new phones (not outright price) without extending your contract terms.

  • StephenBB81

    Well done Nova Scotia.
    Addressing Cellphone contracts in a resonable way.
    I would hope that this becomes a Standard nation wide with much easier to determin cancalation fees. I had to pay $320 dollars canceling out of my Bell Contract early in 2010, though I recouped the savings with my new Plan changing carriers, I had NO idea what the fee was going to be because of the wording in the ETF.

    I would hope the Carriers are
    1: Made to disclose the total hardware costs, and the rate of repayment from my contract fee
    2: address the contract length hardware discount structure, as currently to see any discount one must sign a 3 year contract, yet the carrier doesn’t support the device for 3 years.

  • Gary

    This will have NO EFFECT, because he gives the cell companies their ‘out’…

    “Customers will still be responsible for buying out their equipment if they cancel the contract early.”

    This buyout fee is the one that is costing people the money that is trapping people in their contracts. I think it is totally fair for the cell companies to want their money back for the subsidized phones, so you have to include this…

    • StephenBB81

      The Buy out fee for a device such as a BlackBerry Curve after 1 year would be far less than the ETF of canceling a 3 year contract with 2 years left under the current system

      Those with expensive phones like a Samsung Galaxy 2, or iPhone 4S with the buy out of the phone being $500+ dollars, they would remain “trapped” or contractually abiliged as the case actually is

  • Simble

    I totally agree with this kind of legislating but it needs to cover the cost of hardware. Otherwise say hello to over inflated hardware prices, $600 phones now being billed at $1000

  • Johnathan

    Rogers already does this as of Jan or Feb 2012. You pay back $12.50 plus the amount of discount you got on your phone for taking a 3 year divided by the number of months left in your term. Very fair.

  • JHK

    I don’t understand the douches who complain.
    $50 is a lot better than $300, and this is certainly a step towards right direction.

    • Dredd101

      Firstly, that step should have been taken a decade ago. Secondly, how do you even justify $50? $50 is the last “F*CK YOU!” on your way out, and nothing more. $12.50 I agree with, since it covers basic admin fees. Anything more than that is a slap in a face.

      Do you like your face slapped, JHK?

  • ISellTelus

    Telus already does this in all major markets.
    Clients are told when signing up that cancellation is the initial savings on a phone divided by the number of months in the term, then multiplied by how many months are left. Add the magical $50 as an admin fee (which is stated in the Early Cancellation clause on the contract) and there you have it. They also put IN PRINT that all high-end smartphones require a $50/month spend for the full three years to be eligible for that pricing.
    Yeah, even I agree that a two year term should be the max, but consumers have to act on that desire by talking to their local representatives to get the message across to those in charge of the CPA & CRTC.

  • Darryl

    What really amazes me is that when Canadians are given a pricing model, they accept that this is the way things have to be. They take it as law. Then when someone says there’s a different way of doing business, they stick up for the companies that have been gouging them all along!
    Why not let the phone manufacturers subsidize their own phones? They can do this through purchases in their OS environments and other licensing fees. This way they can charge us the consumers the actual cost of the phones rather than the bloated costs that Rogers etc charge us to strong arm us into these unfair contracts so they can overcharge us and if we disagree with their billing they can blackmail us with our Credit records! Wake up Canada

  • Rhino

    This is EXACTLY what Telus has implemented. You no longer have to buy out the remaining months on your agreement; you pay off your remaining “Device Balance” plus the $50 “Administrative Fee”.

    They calculate the device balance by taking the up front discount and dividing it by the number of months of your agreement. Example: iPhone 4S 16 is $649 MTM, $159 on 3yr. That’s a $490 discount divided by the 36 month agreement. So every month you fulfill $13.61 comes off your device balance. You wanna cancel after 6 months and walk away then it’ll cost you $458.34 plus taxes and anything left owing on your bill. $490 – $81.66(13.61 x 6 = 81.66) + $50 Admin fee = $458.34

  • dinmab

    please include “unlocking” the device also as part of the thing.

  • Domingo

    Bravo Nova Scotia “IF” it happens but this is only the beginning of what NEEDS to happen.

  • 3obelus

    Hosestly, You people will never be happy… Get rid of contracts, the phone costs to much. Sign a contract, and its to expensive to cancel. No matter what they do there will always be people out there who will complain for the sake of complaining.

    At the end of the day, there will always be people who want premium devies and not willing to pay the upfront costs.

    I personaly think cell phone providers should change everything. You pay the phone full price when you start, then the company gives you back a portion of it every month you stay with the company. How would you like that option? Don’t stay, don’t get your money back.Too bad, So sorry….now your lose out, not the company that subsidizes your hardware.

    • Snoopy

      Over-inflated monthly plan prices? Seems legit. GRRF? Seems legit. Paying for caller ID, which costs a comapny nothing? Seems legit. An activation fee after a customer has willingly chosen to be a certain company’s customer? Seems legit. Paying for an extra month of “dead air” with no service provided after early cancellation/porting? Seems legit. Hidden fees left and right? Seems legit. Roaming on company’s own network? Seems legit.

      Should I keep going?

      And then you wonder why people dislike the Big3…

      If they were more accomodating to the customer, instead of nickel-and-diming, then perhaps the mood would have been a lot different.

  • Zod

    I agree I don’t think most people understand this won’t help.

    You’re basically getting a $400 – $600 dollar phone for close to free. Let’s say $500. $500/36 is 13.89.

    So if you cancel after a year. It would be 13.89×24 left owing on the phone which is 333.36 plus the 50 fee. you’re still looking at nearly a $390 cancel fee.

    I think these laws are almost pointless. I think the phone companies round up and say $15/month goes to the phone. It’s still pretty close to my math. The bulk of cancellation fees are the money owing for the phone. It’s why they are so high in the first place.

    I agree that it would be nice for companies to offer a better 2 year contract. Maybe pay $200 for the phone and be on contract for 2 years.

    I really think these laws are pointless. People are angry at cancellation fees, but most of it is paying back for your phone because the phone company can cover it in your monthly fees. That’s not changing therefore the law is pointless.

  • Chillin

    There seems to be some confusion as to what this actually means for cancellation fees: If this is passed it means Telus’ cancellation fees will remain exactly the same, and Rogers’ cancellation fees could actually go UP since Rogers currently charges LESS to cancel than what is being proposed (Rogers only charges $12.50 plus remaining subsidy, this bill proposes $50 plus remaining subsidy).

  • Dexter

    Somebody beat me to it, but Telus has had this exact policy in place for over a year now. I can tell you, judging from comments on Facebook or Twitter, no one thinks that’s fair still. I personally don’t ever sign contracts and if you’re going to whine about your contract you probably should have taken the same path as me.

  • Dustin

    Ontario next please.
    No, wait. Canada wide next.

  • arber

    They should charge you what they paid for the phone from the manufacturer not from what they charge since they probably got the profit off the plan already 1000x times.

  • Joel

    This in Alberta please.

  • laweege

    12.50 or 50.00 there call, your decision on who to sign with. pay back what you owe on the phone of course it’s a business not a charity.
    we need
    phone owned unlocked no question and no bullshit

    phone owned different monthly plan, at least the subsidized portion removed this is a must.

    phone number is yours forever not there’s if they want it buy it back or f–k o-f simple. why should i have to port early and then pay another penalty so they can’t lock my number up.

    i got into a huge scrap with bell mobility about this wanted to charge me 100.00 because i ported to rogers 1 day before contract expired.
    they would not budge. had to threaten bell canada with my tv and home phone all going to rogers if this kept up. would have been screwed if i didn’t have that leverage what a load of s**t. 1 day, 100 bucks, was only paying 30 a month at that time.
    we need help with these bandits to keep them honest. look what free rein gets us

  • slapnuts2k5

    Make people buy their phone out right.. then maybe they will care for them insteam of thinking they are toys
    Then the 3yr contract will be irrelevent and people can pay non subsidized pricing.. then we’ll see what people complain about

  • Lae

    I buy outright, and skip the carrier when I can. Thank you lord jesus(reads:google).

    Now, I loose on my monthy cell bill, because I am paying to subsidize a phone that is not being subsided… Sadly it is still cheaper for me to do this as having an unlocked cell phone wins on roaming costs, etc etc.

    I think Google will be skipping carriers a lot more in future. I think they are fed up and with the comments coming from them in the last couple weeks I see this moving to Canada.

    So how about a little representation for people who carry their own hardware costs? No more minimum $$$ plans and a reduction in rates of the bills please.

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