Bell Served with $100 Million Class Action Suit

by Jordan Richardson on May 15, 2012

Bell Mobility and its parent company, BCE Inc., has been hit with a $100 million class action lawsuit pertaining to its prepaid wireless services. According to the suit, Bell’s expiry dates on its prepaid wireless services are illegal.

The Toronto law firm of Sack Goldblatt Mitchell LLP on behalf of Elliot Lake’s Celia Sankar is bringing the suit. Sankar claims that Bell, along with Virgin Mobile and Solo, engages in “unfair practices” involving prepaid wireless services. The suit also alleges that it is a breach of contract to “seize” credit balances that aren’t used by the aforementioned expiry dates.

Bell says that there is “no merit to the suit,” adding that they will defend against it.

“It is often the only option for youth, new immigrants, workers on minimum wage, the unemployed, people on disability, and seniors on fixed incomes,” Sankar said in a statement about the lawsuit. “These are the people who can least afford to have their funds forfeited or to have their mobile services cut off.”

Sankar is the founder of the DiversityCanada Foundation, a non-profit group that promotes social justice causes. According to the suit, Sankar has had her credit balance seized on at least two separate occasions.

The case, which still has to be certified as a class action suit to head to trial, alleges that Bell’s tactics regarding prepaid wireless services violate Ontario’s Consumer Protection Act. According to Sankar’s interpretation of the Act, payments for prepaid wireless services count as gift cards and therefore cannot have an expiry date.

The statement of claim (PDF) can be found, along with other information, at a website set up by the legal firm handling the case.

“The Consumer Protection Act exists to prevent companies from engaging in ‘unfair business practices’ that harm their customers,” says lead counsel Louis Sokolov. “We are asking the Court to decide whether Bell’s systemic practice of seizing credit balances is unlawful. If it is, then the practice must stop and the money must be returned.”

According to the outline of the suit, much of it hinges on manual pre-payments. The lawsuit describes these as “consumer transactions” under the Act, calling them “future performance agreements” and, as such, subject to the same legal umbrella as gift cards or other similar transaction agreements. In that the expiry of said “future performance agreements” is illegal under the Act, Sankar could very well have a reasonable case against Bell.

There’s also the matter of “unjust enrichment” detailed in the suit. As the lawsuit says, “There is no juristic reason justifying Bell retaining the amounts in question.” For Bell to profit from unused prepaid wireless services seems more than a little sketchy from a legal standpoint.

Further to this case, it would seem that such a class action suit, if accepted by the courts and tried successfully, could have lasting implications for the rest of Canada’s telecommunications providers and their prepaid wireless services.

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Written by: Jordan Richardson. Follow by: RSSTwitterFacebook, or YouTube.

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