Inside Bill 60

Laurent Maisonnave on his iPhone

Laurent Maisonnave on his iPhone, not that he'd ever cancel his contract unilaterally

The Quebec Liberals this week announced Bill 60, proposed legislation that would strengthen (or “modernize“) consumer protections particularly where it concerns long-term service contracts like cellphones. The bill has already (and unsurprisingly) gained the support of the Union des consommateurs, and others. Cellphone providers have stayed silent for the most part, though their advocacy group says the bill is redundant because the industry is already looking to self-regulate (those who buy this please raise your hands).

The full text of the bill is online (PDF). It hasn’t been debated in the National Assembly yet, so it could very well be changed significantly before it becomes law.

Here are some of the highlights:

  • Changes to contracts must come with 60 days’ notice and the consumer has the ability to cancel the contract without penalty if the changes involve “an increase in the consumer’s obligations or a reduction in the merchant’s obligations”
  • Such changes can’t affect “an essential element of the contract” like the nature of the service offered
  • Fixed-term service contracts can’t be unilaterally cancelled by the provider
  • Consumers can’t be required to pay penalty fees beyond simple interest charges for missed payments
  • Merchants are required to fully explain existing warranties before asking customers if they would like extended warranties
  • If you buy an item second-hand that’s still under warranty, manufacturers can’t require that you prove the previous owner abided by the warranty’s conditions
  • Gift certificates and gift cards cannot have expiry dates, and must come with written explanations of how to check the balance on them. They also cannot be subject to fees
  • Contracts must come with various things in writing, including the total dollar value of “inducements” (like free cellphones)
  • Contracts cannot be automatically renewed
  • You can’t be charged for service while the device you use to access that service (assuming it was provided with the contract) is being repaired
  • Consumers can unilaterally cancel contracts and pay back the value of any inducements provided at contract signing (or 10% of the remainder of the contract, or $50, depending on the circumstance)
  • Advertisements must include the full cost of services, less taxes (though it’s hard to see how this would be enforced since cellphones, cable, Internet and other services come with different plans)
  • In case a company breaks any of these provisions, the government or a recognized consumer advocacy body can seek an injunction forcing the provider to comply
  • The bill also contains some minor provisions dealing with travel agents

A lot of these are common sense (no one should be allowed to unilaterally change a contract without the other side’s consent, and companies shouldn’t get free money out of gift cards). Others will probably be criticized because they allow loopholes that lead to abuse (for example, if I know Rogers is about to change their contract, can I get a three-year free iPhone deal and then cancel the contract a week later without paying a penalty and get a free iPhone?). Still others are open to interpretation (we could expect arguments about whether a certain change really increases the obligation of a consumer).

Others sound like they could be downright annoying, like being forced to sit down while a Best Buy employee reads out the complete text of a manufacturer’s warranty to you.

But all in all, it’s a good bill, and provides some valuable protections for consumers against abusive contracts. Law-abiding businesses should be able to point out loopholes that might be exploited against them, but let’s hope the lobbyists don’t start torpedoing parts of this bill just because it might cut down on their bottom line.

22 thoughts on “Inside Bill 60

  1. Joe

    Your loophole example isn’t really valid. If Rogers is going to change their contracts they could easily grandfather in everyone who is currently under contract which is what they should be doing anyways.

    Reply
  2. Jonnyboy

    Great article, great Bill, and I agree with your conclusions. One things regarding your iphone example is that like the law says, if a Customer unilaterally backs out of an agreement, he has to pay the “inducement” charge (4th and 7th from the bottom), so he couldn’t abuse the system that way. Good post!

    Reply
  3. Tux

    An idea for an addition:

    Metered service providers (like Videotron, they count every bit you send or receive and if you go over their cap, they start charging you) MUST inform you the second you go over your cap, and charges for exceeding caps may only go up to a certain reasonable amount.

    I was hit with a $700 bill, followed by a $1300.00 bill the next month by Videotron because I downloaded a 70 gig file and went over the cap.

    Reply
    1. Jay

      Videotron does provide a notification when you go over your data bundle, you also have access to the videotron website which will show you a total of everyday usage and the usage upto date for the month you are in.

      Reply
  4. Brendan Duddridge

    Does this law imply that if a website provides pricing information for products to all Canadians, that it must now also display these additional fees? And what if that information cannot be obtained easily? Would there be different fees at a province level? That is, a recycling fee in Alberta would be different than in Quebec? And would the different amounts have to be displayed appropriately depending on the location of the website visitor?

    The reason I ask is we run a comparison shopping search engine called Shop To It (www.shoptoit.ca). We get product data from merchants all across Canada and the USA (those who ship to Canada). I can hardly believe that we will be able to get all this additional fee information to be able to display to the consumer. We will be happy to display it if we have it, but what will the Quebec government do if we are unable to obtain all this additional pricing information? We are an Alberta based company, but we provide our service to Canadians in both English and French.

    Thanks,

    Brendan
    http://www.shoptoit.ca

    Reply
  5. Vikta

    This is the first instance of politicians working for the people. Great one Quebec.

    On a side note the Cellphone providers will have to give you your deposit back with interest. I singed up with Rogers and they never gave me back my deposit.

    Reply
    1. Fagstein Post author

      It’s a provincial bill, so it would only have effect in Quebec. That said, companies could decide it’s easier to apply the same rules nationwide than to do business one way in Quebec and elsewhere in the rest of the country.

      Reply
  6. Len

    Hi, I currently have a 3 year internet contract with a satellite provider and there is about 7 months left. Will this new bill allow me to cancel the contract without any penalty or at the most a $50.00 charge as I think the bill states? If I was to cancel the contract now the internet provider would charge me $25.00 per month until the end of the contract. I recently contacted the provider and they had not heard of this bill.

    Thanks for your comments

    Len

    Reply
    1. Fagstein Post author

      Yes, though you would also be required to pay for any goods provided to you for free as a condition of the contract. If you got a receiver or dish for free as part of the three-year contract, you’d be required to return them or pay a certain amount not exceeding their total cost. If you didn’t get any goods for free as part of the contract, then it’s the lesser of $50 or 10% of the remainder of the contract.

      Reply
      1. Cris

        I’m in a similar situation as Len. I have about 9 months left in my cell phone contract. Does this mean that I can cancel without incurring the cancellation fee? I didn’t get any goods for free at the start of the contract (used my own cell phone), so if I did have to pay a fee, I would have to pay the lesser of $50 or 10% of the remainder of the contract, right?
        Also, I mentioned this bill to my cell phone provider and they said that these new changes apply only to contracts that have been signed after the law came into play. Any contracts signed before it would still have to pay the previous cancellation fee according to them. Would you mind clearing this up for me?

        Thanks a lot,
        Cris

        Reply
        1. Fagstein Post author

          It seems they are correct. Most of the new laws don’t apply to contracts already in progress. They will take effect when your contract is renewed.

          Reply
  7. Chris

    An interesting piece of background… the cell phone carriers in Canada raised their cancellation penalties (Rogers from $20 per month remaining on contract, max. $200, to $25 per month, max. $400) just about the same time they launched their new 3G networks. Phones operating on the 3G networks are compatible between companies assuming they are not locked, so the new 3G networks meant that you could finally switch companies without having to switch phones as well, as long as you were willing to pay the cancellation fees. That essentially doubled the maximum liability for terminating your contract, while the cell networks are already in the business of charging you any discount you initially received on a phone. It effectively stifled the option of switching networks without switching phones just as it became reality (for those on contract). That’s a pretty substantial change to a contract, and under the circumstances seemed rather anticompetitive. You could argue that it’s irrelevant “because you signed the contract” but I’d say that doesn’t adequately address the fact that the contract was unilaterally changed by the service provider, without the option for the customer to do anything about it but suck up the extra liability. I’d like to see that directly addressed, soon.
    Hopefully the new legislation and compatible networks will have a huge impact on the marketing of actual handsets. Imagine browsing a counter of unlocked phones at a big box store, buying them no contract or locking in for a discount if you choose, knowing that if you don’t like the service you can keep the phone and ditch the service provider. Moving away from a situation where almost all handsets are software locked and carrier branded should also give more power to handset manufacturers to ensure their phones’ features are not neutered by carrier branding before they get in consumers’ hands, so they can compete on even ground at moving some cellphones and spend less time negotiating carrier exclusive deals to get their product out.

    Reply
  8. Jeff

    I can’t seem to find anything about whether or not the Bill’s reach extends retroactively for gift cards or gift certificates issued before the June 30th date. Does the date mean that all cards issued afterward have to comply or that businesses must comply with all gift cards/certificates still valid on that date? I ask because we have several gift cards issued in December 2009 which are due to expire within 30 days from now…

    Reply
    1. Fagstein Post author

      The law mostly applies to new contracts, but according to my reading of it, the section banning expiry dates for gift certificates is specifically singled out as one that takes effect immediately.

      So as far as I can tell, your gift cards should continue to be valid indefinitely. If they’re not honoured, you can take it up with the Office de la protection du consommateur.

      Reply
  9. Daniel

    Not sure if this discussion is still alive, but I’d appreciate help.

    I’m in Quebec and recently backed out of a 3 year rogers plan for 3 phones a year and a half early.
    They billed me $900 that I’ve yet to pay.

    Can I use bill 60 to get out of this?

    Other Info:

    -We’re not using two of the original phones anymore as they broke and we bought replacements.

    -We didn’t realize that the contract wasn’t done and decided to upgrade our phones at futureshop. Their, we found better plans/phones with telus and decided to switch. The people at futureshop canceled our rogers plan without checking (or at least w/o telling us) if our rogers plan was actually done and sold us our telus phones. Just over a month later we get a Rogers bill for 900$.

    Thanks. Daniel.

    Reply
    1. Fagstein Post author

      I’m in Quebec and recently backed out of a 3 year rogers plan for 3 phones a year and a half early.
      They billed me $900 that I’ve yet to pay.

      Can I use bill 60 to get out of this?

      Only if the contract was signed after the bill became law. If not, it doesn’t apply and you still have to pay the penalty.

      Reply
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