Three-year cellphone contracts can be cancelled with limited fees


There was a time cellphone customers bound by contracts would be simply counting the days before it ended so they could get into a less expensive one. Now the Canadian Radio-television and Telecommunications Commission’s wireless code will allow anyone with a three-year wireless contract to break their agreement as without incurring usurious cancellation fees.
This applies to all contracts signed as of June 3, 2013.lockphone-426x268
Canada’s wireless carriers attempted to prevent the code from applying to people with three-year wireless contracts that would not have expired by June 3. The carriers lost a Federal Court appeal in May when the court ruled that the CRTC can make the code applicable to those contracts even if it interferes with the rights of mobile carriers.
While all customers will be able to walk away from their three-year contracts as of Wednesday regardless of when they expire, some will still have to pay a small cancellation fee if they choose to do so.
Customers who’ve signed three-year contracts that have lasted more than two years can cancel their plans without paying any cancellation fees, according to CCTS. The wireless code mandates that carriers can’t charge cancellation fees after 24 months.
People who started their contract between June 3 and Dec. 2, 2013, can cancel their contracts. But they will have to pay at most $50 to do so.
Carriers are able to recover some of the remaining device costs from people who want to cancel their contracts that were signed between June 3 and Dec. 2, 2013.
The CCTS offers a formula for calculating that cancellation fee. Carriers will have to divide the original device subsidy amount by 24 months, which is the amount of time the code allows carriers to recoup a device subsidy. They will then multiply that number by the number of months the contract has already lasted, and then subtract it from the original device subsidy amount.
For example, a three-year contract started on Nov. 5, 2013 with a device subsidy of $240 cancelled on June 10 would cost the customer a $40 early cancellation fee.
• Cancel a new contract and return the phone at no cost (provided customers stay within usage limits) within 15 days if they are unhappy with service.
• Refuse changes to key contract terms and conditions, including services and prices, for the contract’s duration.
• Get a plain language summary of services.
• Cap excess data charges above plan limits at $50 a month.
According to some industry observers, the customers’ joy could be short-lived as these changes may raise the price of smartphones. But on the other hand, that could well be a small price to pay to be able to walk away from a contract if something better comes your way after 24 months without being burdened by penalties.

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