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Calling All Cellphone Users

© John Keith 2007

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If you have a cellphone, you may be eligible for payback of unfair user fees collected by your cellphone company. A class action suit launched in August 2004 against all cellphone service providers in Canada has just cleared an important hurdle. After hearing two weeks of arguments, the Saskatchewan Court of Queens Bench "certified" the class action suit, ruling that the suit has enough legitimacy to proceed. Other hearings are taking place across Canada and a National Class Action may eventually be certified.

A "class action suit" can occur when many people want to sue in court for the same thing. This class action could eventually involve all 14 million cellphone users in Canada, and it could mean cellphone companies will have to repay over $20 billion dollars in illegally charged fees. So far, there are only about 8,000 complainants, but, to make an understatement, many more are expected.

If you look at your cellphone service bill, you will see a "system access fee", a "system administration fee", a "system licencing fees", or a similar sounding surcharge. It's only about seven dollars a month -- make that $6.95 -- but of course it adds up. And it certainly adds up for the cellphone companies -- about $80 dollars a year per customer translates into billions of dollars.

A system license or access fee sounds quite legitimate; it appears to be a government tax or Canadian Radio-Television and Telecommunications Commission (CRTC) charge. That is where the alleged deception comes in. Twenty years ago when cellphone companies first began to operate, there was indeed a bona fide "wireless fee". Although that fee was later dropped, cellphone companies have kept charging customers and keeping the money themselves. A Toronto Star investigation three years ago found that customer service agents were still telling customers it was a mandatory CRTC fee.

Tony Merchant, the lawyer representing the suit, talked to CTV News in Regina and likened the cellphone companies to drug addicts: "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. . . 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."

Although Tony Merchant castigates the "hidden fees" and labels them "unjust enrichment", the companies beg to differ. How could there be any deception, they say, when all the fees are listed right there on the bill. Cellphone companies are appealing the Saskatchewan decisions and are likely to fight every step of the way. Don't expect this to come court -- if it gets that far, the companies will probably want to settle out of court. This all could take years.

When all is said and done, you can expect your cellphone service fees to go up. The surcharge enabled cellphone providers to advertise low rates. You ended up paying more, of course, even though you didn't consider the surcharge a part of the actual fee you were paying for the servce. Well, it soon will be right there up front. The listed rates will go up, and if the class action suits are successful, the companies will surely raise rates substantially in order to afford to pay back the billions of dollars deemed unfairly collected.

All the major service providers and their subsidiaries are implicated: Bell Mobility, Telus, Rogers Wireless -- even Fido has been taking a bite out of you.

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Related Link
Merchant Law Group

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