Nova Scotia Regulates Cell Phone Contracts

by Jordan Richardson on April 30, 2012

The province of Nova Scotia is joining Quebec, Newfoundland and Labrador, and Manitoba in regulating cell phone contracts so that consumers may cancel contracts at any time for no more than a $50 fee.

Nova Scotia’s minister responsible for consumer affairs Jon MacDonnell spearheaded the plan that saw the provincial NDP government introduce a law to put a cap on cancellation fees. The law also does away with automatic renewal of customer contracts and requires the carrier to get the permission of customers for any changes to rates, contract terms or other service options.

“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,” MacDonell said at a news conference at the legislature. “In short, many consumers feel trapped in their cellphone contracts.”

Also, service providers have to be more “upfront” about the costs of introductory or special offers.

“What consumers have told us is that they get confused by these introductory offers that are made and are unaware that after a period of time, whether it be three months or six months or whatever, that that introductory rate goes away, and then they’re back onto a regular rate and they feel they’ve been…broadsided by that,” said Cameron MacNeil of Service Nova Scotia.

EastLink, with its headquarters in Halifax, plans on launching cell phone service in Nova Scotia and is largely fond of the new law. The company is the largest privately-owned cable company in Canada and boasts over 47,075 subscribers in nine provinces.

“I think it really does come down to customers,” said Allan Sullivan, EastLink spokesman. “Rather than being locked in to long-term contracts, they have the flexibility of taking a look at the pricing in the market and what one company or one provider…may have from a pricing perspective and to be able to respond and change providers.”

If there’s a catch, it’s that the new law isn’t retroactive. It only applies to new contracts signed after the law goes into effect.

The Canadian Wireless Telecommunications Association stated that provincial regulations could make for a more complicated regulatory structure. A national structure would be preferable, lest costs be passed down to consumers.

“You could end up with a situation in Canada where you have a patchwork of 13 different sets of regulations,” said spokesman Marc Choma. “A national standard would put all Canadian consumers on the same footing.”

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