Hemera Technologies
Technically, Karina Frost's yearlong membership at a Toronto fitness club was up, but actually cutting ties with the gym wasn't easy.
When Ms. Frost, a 28-year-old Toronto social worker, tried to talk to Extreme Fitness's staff about leaving in 2008, they tried to upsell her on personal training sessions. When she filled out the paperwork to terminate her contract, the club continued charging her credit card for four months.
"They just made it sound like I would never be able to get out of it and like I'd pretty much signed my life away," she says.
Feeling she had no other options, she informed the club she was moving out of the country. She used her expired student visa, U.S. passport and Illinois driver's licence to make her case. In reality, she stayed put in Toronto, but was finally off the hook for payments.
Never doubt the ingenuity of the consumer.
From fibbing about moving to spotting loopholes in contractual legalese, many have taken extreme measures to break contracts without penalty. However, it's much to the chagrin of service providers, who have long used discounted rates or free products to draw in consumers to long-term contracts with high cancellation fees.
Nevertheless, the tables are turned: Consumer forums are rife with queries about how to break contracts and tales from the heroes who have done so.
A Canadian man apparently quit his gym three weeks after signing on for a long-term membership. To reclaim the money he'd paid ahead of time, he fabricated a story about his father suffering a heart attack. He told the gym he had to move back in with his parents to support his mother.
In another case cited by The Washington Post, a man had a friend fax a fake death certificate to his wireless provider to get out of his contract without having to pay a cancellation fee (the company caught on, though).
Ms. Frost knew she wanted to quit the gym a few months into her contract, but waited till the year was up and spoke to two staff members about her decision.
"They said I wouldn't be able to do it and this and that and there wasn't a good reason to cancel," Ms. Frost recalls, saying the experience made her feel as though she were being bullied.
Taso Pappas, Extreme Fitness's chief operating officer, says his staff are trained to ask members why they wish to cancel and see if they can make suggestions to help solve a member's problem. In the end, the club, assuming Ms. Frost had actually moved, refunded her for the four months of extra charges to her account.
But customers don't always have to stretch the truth to break free of unwanted contracts.
After Andrew Ngui, a 34-year-old designer, had a 10-day trial run of an Extreme Fitness location near his home in Toronto, he decided he didn't want to stay with the gym. When he tried to get out of the contract he signed with an in-person visit, he says he felt intimidated.
And so he found something he knew no staff member could argue with: a letter sent by registered mail to the gym stating his rights as a consumer to withdraw from a contract without penalty within Ontario's 10-day "cooling off period." It probably helped that he copied the Ministry of Consumer Services on the note.
"People don't take other people seriously until such time they receive something in writing," Mr. Ngui says. Extreme Fitness was unable to comment on Mr. Ngui's case because he is no longer in the company's system.
Al McGale of Ottawa also knew that cooking up a story wasn't necessary for him to get out of his multiple contracts with Rogers (for his home phone, cable, Internet and wireless services). He was determined to find a loophole in his terms of service with the telecom giant.
In the midst of a customer service call, he had learned that a part of his contract stated if the terms of his services changed, he could revert back to his previous terms or even terminate the contract.
"I happened to look at one of my bills and I saw rate increases and I was like, 'Perfect.' ... I knew they weren't able to mess with my pricing," says Mr. McGale, a 34-year-old network security consultant.
Save for his wireless plan, he got out of all other services without paying any early termination fees. He posted his experience in a public note on Facebook and the instructions went viral.
Kathy Murphy, a Rogers spokesperson in Toronto, says the company had gotten wind of Mr. McGale's experience (which she said did not follow standard practice) and were "looking into it." For those attempting to use the same strategy to avoid the recent rate increase, she clarifies that a rate hike marks a change in an aspect of the company's service, but it "did not actually change the terms of service," and is therefore not grounds for termination of a contract.
Both she and Mr. Pappas stress that if customers can't see themselves committing to a multiyear contract, they can choose a month-to-month option. The issue, of course, is that such plans are generally pricier - the customer pays for that flexibility.
Vaden Masrani knows now that he's more of a "no-obligation" customer than the kind who makes a long-term commitment to a wireless provider. The 21-year-old University of British Columbia student was in his teens when he was swayed to sign up for a three-year wireless plan with Telus because of the offer of a free handset.
"I was fairly young. Free phones are quite attractive," he says.
But in the summer, he sometimes rang up more than $200 in charges on the phone. He'd signed up for an $85-a-month rate plan but often exceeded his allotted minutes.
Jim Johannsson, a Telus spokesperson, said that in order for Mr. Masrani to get out of his contract early, he would have to pay the sum of the monthly instalments remaining on his handset plus a $50 administrative fee.
Instead, Mr. Masrani, has turned to Craigslist in hopes of pawning off his phone: He has advertised a plan takeover with $40 as bait. He hasn't received a response yet, though, and imagines he - along with the dozens of others who have posted similar ads - will just have to pay out the nine months remaining on his contract.
In Mr. McGale's mind, no matter what the business category, service providers shouldn't offer long-term contracts.
"Those contracts, in my opinion, are designed for the dishonest. If you are going to treat me well and give me competitive prices, your service should keep me locked in for three years, not a contract."
Dakshana Bascaramurty