Monday, December 11, 2006

 

Cellular complaints rank 9th

This is a peak shopping season for all sorts of consumer goods. Cellular phones are no exception. As we have written before, there are lots of new handsets on the market this season which should help carriers lock in customers to multi-year contracts in advance of the wireless number portability implementation coming in March.

Are customers concerned about multi-year agreements? Cellular phones were one of the leading sources of consumer complaints in Ontario last year, according to the Ministry of Government Services.

Top 10 Consumer Complaints and Inquiries in 2005
Collection agencies4,533
Home renovations2,577
New & used vehicle purchases1,880
Motor vehicle repairs1,485
Home furnishings1,267
Fitness & health clubs1,067
Credit reporting1,038
Personal items1,007
Cell phones842
Timeshares688

Perhaps last week's introduction of legislation to explicitly put forborne services under the Competition Act signals that we should be looking beyond the CRTC to discipline wireless services.

So, what is the best strategy for consumers choosing a cel phone plan and provider? I would say, look as carefully at the cancellation fees as you look at the monthly rates. A 3-year contract will get you the greatest discount off your new phone, but not all 3-year deals are the same.

Look at the penalties for early termination. If you lose or break your phone, you may be better off cancelling your plan, rather than paying full price for a replacement device. Each of the major carriers charges $20 per month remaining in the agreement but Rogers has a maximum $200 penalty to get out of your contract. Bell tops out at $400 while TELUS has $100 minimum and no upper limit.

The added benefit with Rogers, if you cancel early, is the ability to get your phone unlocked at many retailers. That will then make it easier for you to travel to the US or overseas and make use of a local pay-as-you-go SIM card. Unless, of course, you enjoy paying a zillion dollars per minute for roaming.

Or, you could just file a complaint. That would help cell phones move up the charts from number 9 on Ontario's Top Ten Countdown. Will provinces intervene?

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Comments:
I often overhear wireless employees, especially in kiosks, pushing 3 year plans on consumers. I'm always tempted to warn the people looking for a new cell phone this year to wait till spring and wireless number portability. :-) But then, that would result in a 15 minute conversation on WNP. I worry that the public isn't aware that it's so close, and they aren't considering WNP when looking at a new wireless provider.
 
If the provinces (Ontario in this case) were to jump into the fray about consumer complaints about cellular services, billing practices and service charges, etc., it wouldn't be the first time they dealt with an issue affecting federally licensed and regulated undertakings. Back when Rogers and other cablecos tried negative option billing, Ontario jumped in and stopped the practice albeit not as quickly as some consumers would have liked. What turned the tide was a virtual tidal wave of complaints and media coverage of those complaints. That hasn't happened with cellular as yet and I suspect it won't because groups like the Consumers Association of Canada don't seem to want to take up those kinds of issues any more. There were times though when the former Ministry of Consumer and Commercial Relations (which is now part of Government Services) reacted when there wasn't a huge public outcry. One example is when they amended the Condominium Act to clarify who owned the wiring in a condominium when the developer turned the ownership of the building over to the condominium association. The cablecos said it was still their property and they could dictate what signals were distributed. This frustrated the associations who wanted to take advantage of the competition coming from satellite providers. They lobbied behind the scenes and the Ministry eventually said 'no'. Despite active lobbying by the cablecos and the OCTA/CCTA, that's the way things stand. So, the provinces can be a source of relief. However, it may not come as quickly as some may like.
 
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