People in Nova Scotia would have their cellphone contract cancellation fees capped and be told of any changes that would increase their bills under legislation proposed Friday that aims to regulate the mobile phone industry.
Service Nova Scotia Minister John MacDonell said amendments to the province's Consumer Protection Act would cap cancellation fees to $50 and require telecommunications companies to provide minimum monthly costs of service in contracts and advertising.
Mr. MacDonell said the legislation is in response to public complaints and is designed to protect consumers from hidden and excessive fees.
“Concerns have come up that consumers who enter into cellphone contracts ... feel they may be the victims of unfair and unclear contracts with excessive cancellation fees,” Mr. MacDonell told a news conference at the legislature.
“In short, many consumers feel trapped in their cellphone contracts.”
Companies would also have to inform customers of contract changes that would increase their bills and would be restricted from automatically renewing or extending contracts.
A spokesman for the Canadian Wireless Telecommunications Association said the industry is concerned about the increasing layers of regulation from province to province, warning that they could add costs that would be passed on to consumers.
“You could end up with a situation in Canada where you have a patchwork of 13 different sets of regulations,” said Marc Choma, adding that the industry would prefer a national set of regulations since it is regulated by Ottawa.
“A national standard would put all Canadian consumers on the same footing.”
Earlier this month, Ontario announced it would bring in similar legislation, while Quebec already has a law that limits cancellation fees and stops companies from automatically renewing contracts.
Last year, Manitoba also passed a law requiring companies to clearly spell out how much they charge customers who cancel contracts.
Allan Sullivan, a spokesman for Halifax-based telecommunications firm EastLink, said his company fully supports Nova Scotia's initiative because it would protect consumers while providing for more competition in the market.
He said EastLink has plans to launch its own cellphone service later this year.
“Anything that can provide more flexibility and choice for customers is a good thing in the long run,” said Mr. Sullivan.
The legislation would also require companies to work with the government as it implements measures to combat cyberbullying.
Cameron McNeil, the executive director of consumer and business programs for Service Nova Scotia, said cellphone companies would have to heighten customer awareness of the problem, such as through the use of pamphlets.
Mr. McNeil said the amendment to ensure minimum monthly costs is specifically meant to protect consumers who are often “broadsided” by introductory offers.
“What consumers have told us is that they get confused ... and are unaware that after a period of time that introductory rate goes away and they are back onto a regular rate,” Mr. McNeil said.