While the CRTC acknowledges that wireless device financing plans that exceed 24 months may render devices more affordable and attractive for Canadians customers, the Commission wants to ensure Canadians continue to be protected by the Wireless Code.
The CRTC today announced that the new 36 month device financing plans in the wireless service marketplace may not be compliant with the Wireless Code since customers may have to pay fees to switch service providers, even after 24 months. The Wireless Code was introduced to protect consumers and prohibits service providers from charging early cancellation fees beyond 24 months.
Therefore, the CRTC is asking all wireless service providers to stop offering device financing plans on terms longer than 24 months until the Commission completes a full review of this practice.
The CRTC will publish a Notice of Consultation to examine this issue in greater detail. At the conclusion of this process, the Commission will determine what regulatory action should be taken if these plans are not compliant with the Wireless Code.
“Canadian customers have the right to make informed choices based on clarity. We want customers to have options for financing their device, if they so choose, but we also need to make sure these new 36 month device financing plans are fair for consumers. The Wireless Code protects consumers and gives them the ability to take advantage of competitive offers at least every two years. The CRTC is concerned by these financing plans as they appear to make it difficult for a customer to switch service providers even after 24 months.”
-Ian Scott, Chairperson and Chief Executive Officer, CRTC
The Commission is of the preliminary view that certain device financing plans may create new barriers for customers to take advantage of competitive offers in the marketplace.
If the CRTC determines that the offering of device financing plans, including those on terms longer than 24 months, are not compliant with the Wireless Code, it may issue a mandatory order prohibiting wireless service providers from offering these plans.
The CRTC may also impose administrative monetary penalties to wireless service providers for every contravention up to a maximum of $10,000,000, and $15,000,000 for every subsequent contravention.
The Commission also intends to provide direction and guidance to the Commission for Complaints for Telecom-television Services (CCTS) with respect to addressing complaints related to device financing plans, including those on terms longer than 24 months.