Rogers Communications Inc. says it will offer credits or refunds to customers who were unknowingly charged extra for so-called premium text services – quizzes, games, horoscopes and ring-tones – as part of a deal to settle allegations from the Competition Bureau of "misleading advertising."
Rogers, BCE Inc., Telus Corp. and the industry group the Canadian Wireless Telecommunications Association all faced allegations from the Competition Bureau in 2012 over what bureau calls "unauthorized" charges for these text services, which are usually offered by third-party companies and often popular with children.
The bureau demanded $31-million in fines – $10-million from each company and $1-million from the association – and that consumers be compensated. Then-competition commissioner Melanie Aitken alleged the wireless providers were profiting from fees of as much as $40 a month that were being charged to customers who in many cases had signed up for the services unwittingly, while playing a game, for example. She also said the bureau was forced to take action after the companies had refused to voluntarily change their billing practices.
While Rogers and the other providers initially deflected the blame to the companies that offer the services, the company announced on Monday that it would offer refunds and credits to customers. The company estimates the move could cost it as much as $5.42-million. Rogers is not paying money in fines to the Competition Bureau as part of the settlement, a spokeswoman said.
Eligible customers are those who were charged for premium text services offered by a provider called Jesta Digital LLC between Jan. 1, 2011 and Aug. 31, 2013, and from another called Mobile Messenger North America Inc. (MMS) between Jan. 1, 2011, and Sept. 30, 2012. Current customers will get a credit on their bills, Rogers says, and it is directing former customers to a website for more information. The offending text services included Mind Quiz, Love Crush and Joke A Day.
Rogers says it has already offered refunds to customers who have complained about the services. It stopped offering Jesta's services in 2012 and cancelled its relationship with MMS last year. Rogers previously made the sign-up process for such services clearer and capped the monthly charges customers face for premium text services, and implemented a system that allows customers to stop the charges quickly. But last year it cancelled all of its premium text services.
Raj Doshi, Rogers executive vice-president for wireless services, said the refunds are part of the company's overall effort to improve its customer service.
"We could have handled this better in the past," Mr. Doshi said in a statement. "As part of our Rogers 3.0 plan we are very focused on improving the customer experience and we want our customers to know that this is the way we'll operate going forward."
The Competition Bureau said the more than $5-million Rogers has agreed to refund to consumers is the most any company has ever agreed to pay to its customers as part of a settlement with the agency. It also said Rogers had agreed to launch a public awareness campaign and to improve training for employees.
The regulator confirmed that its action in Ontario Superior Court, now discontinued against Rogers, continues against Bell, Telus and the CWTA over the texting charges.
Competition Commissioner John Pecman said in a statement that the bureau was pleased Rogers chose to work with the agency to resolve the matter: " It is important that fees and subscriptions are not hidden in the fine print or anywhere else, and that consumers' right to truth in advertising is not compromised in the digital economy."