Canada Competition Bureau

The Wireless Code of Conduct Applies to all Canadians

June 4, 2015 - Written By Cory McNutt

This is a very important day in the lives of all Canadians – as of June 3, 2015 all Canadians fall under the protection of the CRTC’s Wireless Code of Ethics.  Canadians may be asking what that means for them, well, the most important aspect is finally the banning of three-year contracts – everything must be paid off with 24 months or two years.  The  Wireless code declared on June 3 that even those still under a three-year contract, would governed by its many tenets, so they can leave without paying a cancellation fee…providing they have at least served their 24 month period.

In some ways, it is easy to understand why carriers implemented the three-year contracts – it would prevent a customer from buying an expensive smartphone at a low, subsidized price and then try to cancel their contract and walk away with a nice phone.  The cancellation fees were put in place to recoup the cost of the device…and then some.  But as of today, as long as you have made your 24 month commitment, you can simply ‘walkout’ on the remaining 12 months of your original three-year deal and owe nothing.

Even if you brought your own device, so there is no subsidy to worry about, you can still bow out of your two-year contract early, but it will cost you a little.  The Wireless Code says that the maximum cancellation fee will be $50 or 10-percent of the minimum monthly charge for the remainder of the months…whichever is less.  Let’s say you are paying $40 a month for service and you have five months left on your contract.  $40 times 10-percent is $4 for 5 months, which equals $20…since that is less than $50, you pay the $20 and walk away.  If you BYOD and are not required to sign a contract, then there is no cancellation fee at all.

Roaming fees are also included in the Wireless Code and carriers are required to suspend roaming charges when they reach $100 – unless the customer agrees to more.  They are required to send a SMS or email to ask permission to continue billing.  The Code sets the data limit overages in your own network to $50.

Customer’s contracts must be readable in easy to understand plain language and no changes can be made without the customers consent.  If a customer cancels their contract, it is effective immediately with no more 30-day waiting periods.  Sufficient notice must be given if service is being disconnected due to a late payment and what governs the carrier’s ability to disconnect your service is plainly spelled out.

The Wireless Code is very ‘user friendly’ for the most part and should help customers understand their contracts better and know what their options are.  Cancellation fees were certainly brought under control as well as roaming and data overages.  Of course the implementation of two-year contracts has caused an increase in the cost of smartphones since there is now only a two year, not three year period to amortize the subsidies.  There are always compromises in situations such as these, but for the most part, the customer came out the winner.