ARCHIVED - Telecom Order CRTC 2004-307

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Telecom Order CRTC 2004-307

  Ottawa, 9 September 2004

Complaint against Bell Canada concerning termination charges and collection practices

  Reference: 4734-068 and 4764-116
  Following the early cancellation of a one year contract for Local Link business telephone service (Local Link service) the complainant alleged that he was misled by a Bell Canada sales agent as to the consequences of early termination. The Commission upholds the tariffed termination charge as applied by Bell Canada on the early termination of the one year contract for Local Link service.

The complaint


On 25 April 2003, a complaint was filed with the Commission that detailed a dispute with Bell Canada regarding the consequence of the early cancellation of a one year contract for the provision of Local Link business telephone service (Local Link service). The complainant alleged that he had only recently learned that the consequence of early cancellation was the payment of fifty per cent of the value of the monthly rate for the months remaining in the minimum contract period (MCP). The complainant claimed that he was misled as to this provision of the contract.


The complainant alleged that he was contacted by a telemarketer representing Bell Canada on 11 December 2002, and was offered monthly savings on his business telephone account in exchange for a commitment to a contract with a MCP of one year (the sales call). The contract would reduce the monthly cost of telephone service by approximately five dollars per month. The complainant asserted that he was not made aware at any time during the sales call of the true consequences for early cancellation of the agreement. He asserted that the sales agent told him of a termination charge for early cancellation only when the complainant asked. The complainant alleged that the sales agent informed him that the charge for cancellation was the repayment of the savings achieved during the elapsed contract period, or approximately five dollars per month of service under the contract. On 12 December 2002, Bell Canada began to charge the lower monthly rate payable under the contract.


The complainant stated that he cancelled the telephone service on 3 April 2003. On 10 April 2003, Bell Canada issued a final bill on the account that included a termination charge of approximately $170. In an addendum to his complaint filed on 21 May 2003, the complainant claimed that he had received intimidating treatment from a Bell Canada employee and that he had not received a response from Bell Canada to his complaint.

Reply from Bell Canada


In its response dated 28 May 2003, Bell Canada claimed that during the sales call the complainant demonstrated his consent to the terms and conditions of the Local Link service using the electronic confirmation component of the integrated voice response (IVR) system. Bell Canada explained that the IVR system is a computer to which a person can connect over a voice telephone line and manipulate using the keypad on a touch-tone phone.


Bell Canada asserted that the IVR system provided specific information about the consequences of early cancellation of the contract, and that consent was indicated by pressing the appropriate keys on a touch-tone phone. Bell Canada provided a copy of the electronic record reflecting the complainant's call in which he indicated his consent. In addition, Bell Canada stated that it mailed a paper copy of the terms and conditions of the contract to the customer in December 2002.

Subsequent correspondence


On 17 June 2003, the complainant wrote to express dissatisfaction with the way that his complaint had been handled to date and to state that he had not yet received any response from Bell Canada.


By letter dated 7 July 2003, Commission staff responded to the complainant. Commission staff provided a copy of Bell Canada's reply including a copy of the IVR confirmation and set out the view that Bell Canada had adequately responded to the complaint.


Still dissatisfied with the response to the complaint, on 1 August 2003, the complainant requested a full review of the matter. In a further letter dated 16 August 2003, the complainant expressed dissatisfaction, among other matters, with the fact that Bell Canada had pressed for collection of the amount even while the complaint was pending before the Commission.


On 28 August 2003, Bell Canada filed its response and stated that the complainant had paid the termination charges. Bell Canada asserted that the terms of the contract were made available to the complainant in a clear and understandable format and in particular, that the termination charges were clearly stated in the terms and conditions of the contract on the IVR, in the General Tariff and in the paper copy mailed to the complainant. Consequently, the complainant consented to the terms and conditions of the contract. In addition, Bell Canada asserted that its employees were not improper or harassing in their dealings with the complainant but simply engaged in normal collection activities.


On 29 August 2003, the complainant responded to Bell Canada's submissions. He maintained that the terms of the contract had been misrepresented and manipulated during the sales call. He maintained that he was treated improperly and he denied ever receiving the terms and conditions by mail. The complainant claimed that the telemarketer took control of every step of the electronic consent process and told him to press buttons to indicate his consent to the terms as explained to him by the telemarketer.

Analysis and determination


The Commission considers that the issue in this dispute is whether there was adherence to the regulatory requirements for obtaining informed customer consent for the contract. If there was informed customer consent, the Commission considers that the termination charges were properly applied.


The Commission notes that the IVR verification process used to obtain customer consent was mandated by the Commission in  Optel Communications Corporation vs. Bell Canada - CRTC clarifies contract requirements for local link service, Order CRTC 2000-250, 30 March 2000, in which the Commission directed that this method of consent be included in the General Tariff. As a result, it is listed in Bell Canada's General Tariff (the General Tariff) at item 680 (2)(a)(3). Customer consent is required in part because there are consequences to the early termination of the contract.


The Commission observes that the termination charge levied by Bell Canada conformed to the terms and conditions for Local Link service as set out in the General Tariff at item 680 (2)(b) and in the Terms of Service which constitute item 10 of the General Tariff.


The Commission notes that the complainant asserted that he was misled as to the consequences of early termination during the MCP by the telemarketer who not only misled him but also took control of the electronic consent process on the IVR system. The Commission further notes that Bell Canada provided a printed record reflecting the complainant's electronic confirmation of the terms and conditions of the contract on the IVR system.


The Commission takes note of Bell Canada's explanation that the IVR system gave the complainant an opportunity to hear the terms and conditions of the contract that he concluded with Bell Canada. This opportunity existed even though a sales representative may have guided the complainant through the electronic consent process. In order for the complainant not to have heard the recording about termination charges, the complainant would have had to consent to the contract without listening to the terms.


In addition, the Commission notes that the recording on the IVR system refers to the Terms of Service and item 680 of the General Tariff, which gives a customer listening to the recording an opportunity to verify the information regarding termination charges. The Commission further notes that the General Tariff, including the Terms of Service, is applicable to the provision of service in this situation and that the terms and conditions set out in the General Tariff are binding on both Bell Canada and the complainant.


The Commission considers that the complainant would have received the terms and conditions of the contract sent in the mail by Bell Canada in December 2002 following the contract agreement. There was no apparent problem in the delivery of bills, which suggests that the letter with the terms of the contract also arrived.


Given the above, the Commission concludes that Bell Canada met its regulatory requirements to obtain customer consent to the one year contract for Local Link service and that the termination charges were properly applied in this case.


Concerning the issue of account collection while the complaint was pending before the Commission, it is to be noted that in emergency situations, such as in the case of the threat of immediate disconnection, the Commission will often take measures to preserve basic service under section 56(5) of the CRTC Telecommunications Rules of Procedure. That was not the case in the present matter, since it was the complainant who initiated termination of the Local Link service. In such situations, where no emergency is involved, the Commission has, as a matter of practice, not normally interfered with account collection with the understanding that any amounts in dispute that are collected will be refunded with interest if a complaint is upheld.
  Secretary General
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Date Modified: 2004-09-09

Date modified: