CRTC probing mobile device financing plans for regulatory compliance

TORONTO — Canada’s telecommunications regulator is investigating mobile phone plans that allow customers to spread the cost of new devices over several years to determine if they comply with a mandatory limit on some contract terms.

A notice distributed by the Canadian Radio-television and Telecommunications Commission to various companies says providers offering the option must submit answers to more than a dozen questions by July 30.

The notice doesn’t allege the rules have been broken but the questions focus on how retail customers are treated.

CRTC’s Scott Hutton, chief of consumer, research and communications said the commission is aware that some wireless service providers (WSPs) are offering financing plans that are separate from the provision of wireless services.

“Commission staff is seeking information to better understand these device financing plans and how they are offered to customers,” Hutton writes in a commission letter posted publicly on Wednesday.

Among the specific questions: Can a customer enter into a financing plan with a $0 down payment? Which devices or types of devices are eligible for the financing plans you offer? Can a customer cancel their financing plan?

The CRTC’s notice, dated July 16, comes about a week after Rogers Communications announced a new 36-month device financing option as well as a 24-month device financing option.

That followed Telus’s July 9 announcement that it would become the first Canadian national carrier to offer device financing, although it didn’t offer a 36-month device financing option at the time.

The regulator’s wireless code essentially limits service contracts to 24 months in length or less, so the offer of a three-year financing option raised questions about whether they would be acceptable to the CRTC.

Although regional carrier Eastlink has offered a two-year financing option since November 2013, Canadian carriers more typically lower the up-front price of new hardware, fully or partially, with a one- or two-year service contract.

Rogers appears confident that the new device financing options comply with the code because they don’t charge interest or a cancellation fee, although outstanding balances may become due if the customer drops the service.

“Customers who choose device financing are on month-to-month service agreements with us. We’re doing what’s right for our customers and this is about offering them more choice and affordability,” Rogers said in a statement Wednesday.

Telus said “Jim Senko our President of Mobility Solutions commented (earlier this month) that a 36-month financing option is attractive for a certain segment of customers and will help make it more affordable for those customers to get the latest smartphones, which continue to increase in price, at a much lower monthly cost when spread out over a longer term.”

At one time, Canadian carriers also offered three-year service contracts but that changed after 2017 revisions to the CRTC’s wireless code has prevented them from charging an early cancellation fee after 24 months.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta legislature to resume with throne speech, tabling of blockade bill

EDMONTON — Alberta politicians are returning to the legislature with a promise… Continue reading

Drugmaker readies possible coronavirus vaccine for testing

Drugmaker Moderna has shipped its first batch of a possible coronavirus vaccine… Continue reading

Scotiabank reports $2.3B first-quarter profit, tops expectations by analysts

TORONTO — Bank of Nova Scotia is optimistic its international ventures are… Continue reading

A look at carbon prices across the country

OTTAWA — As of Jan. 1, every Canadian and all Canadian businesses… Continue reading

Your community calendar

Feb. 19 A Liberation of Holland event is being held at the… Continue reading

N.S. Liberal budget opens up spending taps as province faces slowing economy

HALIFAX — Nova Scotia’s Liberal government is opening the spending taps for… Continue reading

New rail blockades emerge as government talks continue

HAMILTON — Protesters in central Canada erected new rail blockades on Tuesday… Continue reading

Canadians in Iran ask for consular services in wake of coronavirus outbreak

OTTAWA — Canadians in Iran say they have no way to leave… Continue reading

Barrier repairs will impact QE11 Highway traffic

Weather permitting, crews will carry out cable barrier repairs on the QEII… Continue reading

People don’t want to be governed

Not so long ago, Canada was caught up in a conversation about… Continue reading

Kids under 12 banned from heading soccer balls in practice

LONDON — Children up to the age of 12 will be banned… Continue reading

Oilers among winners, Panthers losers at NHL trade deadline

Mired in a run of one playoff appearance in 13 seasons, the… Continue reading

Most Read