You win some… and lose some

May 30 2007 by Ellen Roseman

When the media get involved in customer service disputes, companies snap to attention. Suddenly, the lines of communication open up and the disputes get resolved.

In my Saturday column, On Your Side, I write about fights I’ve won on behalf of readers. But I only have room for a few of the many victories. You’ll find more details in this blog.

However, there’s one battle I usually lose. That’s when I go to bat for someone who signs a long-term contract and wants to get out early: Something comes up and there’s a need to switch. The company says too bad: You decided to sign and you’re stuck.

I’m reprinting a letter from a reader who wants to get out of his cellphone contract with Telus and the company’s response. Tell me what you think.

I signed a 2-year contract in January of 2007 and recently found out that I was awarded a job in Yellowknife and will be moving from PEI to Yellowknife this June. I called Telus to inquire about their services in Yellowknife and they told me that they simply have a roaming agreement with Northwestel. In order to have coverage up there, I would have to purchase a Canada-wide long distance plan and keep my PEI phone number.

They were unclear about the details, but this was not a desirable outcome since I will be living in Yellowknife indefinitely and don’t want to have to worry that local calls could be coming in as long distance. Not only would I lose all my current calling features and bonuses from my current contract renewal that I negotiated with Telus, but I will be forced to buy a plan that does not offer any of the features I rely on (call display, voicemail, etc).

I feel like this is unfair. My career is taking off and I’m moving to a new place, but Telus will not let me get out of a contract in which they cannot provide the proper service. Is there any way you can help me get out of my current Telus contract so that I am not forced against the ropes, so to speak?

Response from Julie Smithers, a Telus spokeswoman:

It will not be possible for TELUS to permit cancellation of the account without applying the full termination liability charge that is standard for cancellation of a term contract. As the customer indicates, he chose to sign a contract in January. This is entirely optional as clients can also choose to maintain service on a month to month basis, which allows them to cancel on 30 days’ notice without incurring penalty. For example, we do not encourage clients to sign contracts if they are in temporary living circumstances or actively looking for employment, which could include relocation, as it might make it difficult for them to commit to a contract term.

All clients have the option of transferring their contract to friends or family at their discretion. The client has also been informed of the termination liability charges that would result from cancelling the unit just months into the contract. Termination liability charges are clearly outlined in easily legible print on the front page of the contract he signed when selecting his service. Because of the two-year term commitment, he received his handset at a discounted rate. TELUS also incurs other up-front costs of bringing clients onto the network, including commissions to the sales force.

In TELUS’ Service Terms, which are presented to clients prior to activation, TELUS expressly points out that it does not guarantee uninterrupted service. It is important for clients considering relocation to discuss their potential coverage needs with TELUS’ client care staff either by contacting client care or visiting a retail location.

18 comments

  1. FourPillars

    May 30 2007

    I hate to say it but if you sign a contract, you’re responsible for it.

    It seems to me that usually the long term phone contracts usually come with a free phone? Not sure if that’s still true but that’s pretty much the payment for taking on the risk of the contract.

  2. George

    May 30 2007

    I don’t know why this should be such a big deal. A contract is an agreement between two parties, where each party agrees to the terms of the deal. If Telus agrees to give you a discount on a cell phone in exchange for a multi-year contract, then you’re also agreeing to the “multi-year” part of the contract.

    At least Telus is willing to allow the contract to be transferred – your reader could always “sell” the phone and contract, or pay somebody to take it over. If anything, he’d end up paying less that way than if he had to pay Telus’ cancellation fees.

  3. FinancialJungle.com

    May 31 2007

    This quote says it all:

    “Because of the two-year term commitment, he received his handset at a discounted rate. TELUS also incurs other up-front costs of bringing clients onto the network, including commissions to the sales force.”

    Telus isn’t in the charity business. If the customer walks away free and clear, he’s essentially stealing money from the shareholders’ pocket, my pocket.

  4. Recruiting Animal

    May 31 2007

    Sprint refused to cancel a dead man’s cell phone account until it was embarrassed into doing so by online publicity.
    —————————-
    http://consumerist.com/consumer/cancellations/update-sprint-will-cancel-dead-brothers-cellphone-231875.php

    UPDATE: Sprint Will Cancel Dead Brother’s Cellphone

    A Sprint PR rep contacted us regarding our post, “Sprint Refuses To Cancel Dead Brother’s Cellphone” and it seems they want to help.

    The PR rep \booted the issue up to JoAnn Stanford, a high-ranking Sprint Executive Customer Service rep. She wrote Matt:

    “Thank you for your response to my email. I’m sorry I was [not] on the line when you called. When you are able to, if you would send me the account info (I don’t even have his name at this time) I will take care of resolving this for you.

    “I am truly sorry for the level of customer service you experienced from our representatives.”

    Sounds like a happy ending is just around the corner.

    Thanks Sprint! All it took was 5150 Diggs and you did the right thing! — BEN POPKEN
    —————————-
    Here is the original story:

    http://72.14.205.104/search?q=cache:fX3XFzUle3UJ:consumerist.com/consumer/complaints/sprint-refuses-to-cancel-dead-brothers-cellphone-229520.php+dead+brother%27s+cell+phone+sprint&hl=en&ct=clnk&cd=1
    —————————-

  5. Kevin

    May 31 2007

    I have to side with Telus on this one. Customer gets a ‘free’ or discounted phone in exchange for agreeing to an extended service plan. If he cancels, Telus would not be able to recoup their loss on the phone.

    There should be some penalty for breaking the contract (i.e., at least the cost of the phone). However, I have heard stories where the penalties are a bit excessive.

  6. Mike

    May 31 2007

    I work in the leasing business (vehicles) and you see this same sort of behaviour from people all the time. They sign a contract and then change their minds a few months later and want out of the lease. By then, we’ve incurred significant sales expenses, financing expenses, and capital/depreciation costs in setting up and servicing the deal.

    Consumers need to accept their obligations under the terms of the contract. If you can’t commit to the terms, don’t sign the contract – it’s not that complicated.

    It sounds like TELUS offers month-to-month terms at the same rates as the contract rates so the only incentive for the contract appears to be a free (or cheaper phone).

    No sympathy from me for the guy moving to Yellowknife. If I was looking for a job up North, I wouldn’t have signed a multi year contract … sounds to me he like was trying to cheat TELUS out of a couple hundred bucks!

  7. Telly

    Jun 1 2007

    I’ve been a Telus customer for about 8 years now (2 phones) and I’m always so impressed by their service so I have to side with Telus here. 🙂

    I generally avoid companies that require you to sign a contract to get a good deal (i.e. a well known satellite company..) and don’t get sucked into signing 3 year contracts. Telus rings me up every 6-8 months asking me if I’d like to sign and get a new phone and various other extras. I’ve signed up for one year contracts here and there to get free evenings & weekends and that type of thing but only knowing that if I had to cancel for some unknown reason, I could afford the cancellation fees.

    Bottom line, don’t sign a contract if you can’t afford to break it based on the contract terms you knew upfront.

  8. Richard Avery

    Jun 5 2007

    You are, of course, absolutely correct in saying that people are obligated to honour contracts they sign. At the same time, the cellular phone companies are in some important ways little more than corporate pirates.

    Take Rogers, for example. It (and the other cellular phone companies) charges a monthly “network access fee.” This is nothing but a cash grab, pure and simple.

    The federal regulator just turns a blind eye to this and does nothing. It almost as though the federal government charged you a fee to pay your taxes. After all, somebody has to pay for running that vast “system.” This is blatant corporate piracy and nothing is being done about it.

    A few years ago, in a speech to the Pacific Telecommunications Council, Michael Janigan said: “In Canada, our Competition Bureau has been far more successful in rooting out competitive injurious conduct brought about by the conduct of multiple firms, rather than the problems of market dominance by a single firm.”

    I think he vastly overstated the case. Take the Canadian gasoline market, for example, which has numerous companies (mainly foreign-owned) operating in it. Every driver knows all the companies raise prices in lock step. Every driver knows the prices increase prior to weekends (especially in summer) and are lower late at night than in the morning when commuters head off to work. If the price of oil rises on international markets, Canadian gasoline prices rise immediately, even though the newly-increased price of oil refers to futures contracts that won’t be delivered for two or more months. On the rare occasion when the market price of crude declines, gasoline prices usually don’t budge for weeks — if at all.

    Yet through all of this, Canada’s Competition Bureau maintains that over several investigations, it could not find any evidence of collusion between the oil companies. It’s enough to make one question whether any of the Competition Bureau investigators actually drive motor vehicles.

    I believe we are seeing the same kind of thing in the cellular phone market. For better or for worse, the cellular phone (and offshoots such as the Blackberry) have become essential in 21st century Canadian life. Everybody agrees that System Access Fees (SAFs) are not government-mandated charges. Yet all the cellular providers charge them. Isn’t that collusion or price-fixing? And if it is, why won’t the Competition Bureau act on it?

    Charging SAFs is, in my humble opinion, price gouging pure and simple. And our governments stand by and let it happen. Is it any wonder Canadians have so little faith in governments, regardless of political stripe? The Competition Bureau is supposed to protect consumers. Instead, it in effect issues blank cheques to the cellular phone companies for SAFs.

  9. Jamin Naylor

    Aug 22 2007

    I am rather ticked off about a cell phone issue with Telus. I currently owe them $1,356 for literally 3.5 months of service. That’s $640 for an early cancellation fee and $740 in service fees, which works out to $380 for the months of service. If you ignore the early cancellation fee (which should be capped), it works to $211/mo ($45 for the plan, so according to them I was making $175 in long distance, totalling to 700 minutes in long distance billed a month on average). I don’t believe I talked that amount on all my calls total. And if for argument’s sake, I did, that means I would have been billed LD for every call I made.

    So one may argue that was a mistake on their part, right? We’ll bring up a few things here. First off, after reviewing the sealed contract they included in the cell bundle (the thing you don’t read and sign on, that very convenient one-sided piece of paper), it reads that if the bill is not disputed within 30 days after its date, the charges will commence. What kind of buiness practice is this? How can you legitimately say that you don’t have any rights if you didn’t happen to deal with the bill in that small period of time? That is robbery right there! Being charged for a service they did not provide.

    Secondly, when I owned my first cell from Telus (pay as you go), I was never charged long distance if I were calling a local number in any given location, regardless of whether or not it was in my original service area, but incoming calls were charged long distance. I believe this is called roaming. Apparently in the contract plan I signed, roaming was not included, so all my calls were long distance and since I moved to another calling area, it was likely all my calls were being charged LD. However, whenever a call was considered LD if I would call without a “1” before the #, then Telus would notify me that was a long distance # and to dial “1”. Well, when I was “roaming,” no such message came up. So there is definitely something fishy going on here.

    I had not been able to see my bills as I had moved around a few times from school to another location, so my bill had to stay at my parents’ house. When I finally got the bills, I had seen how much it really was and my jaw literally dropped! So there goes my 30 days clause.

    They also cancelled my contract without notifying me by phone or text….so there was no chance for my avoiding the cancellation fee and having an opportunity to redeem myself.

    On top of all this, they were hassling me and refusing to give me my calling info on the LD charges I had incurred to dispute them.

    The result was having my file sent to a credit collector. After they had it for one week, I finally got a call. When I talked to the rep, she says I have to pay in full by the next day by 1 pm or the file will be closed and sent back to Telus where they will take full legal action!!! I asked what she meant by full legal action and she said they will garnish my wages to the fullest extent. I said I am self-employed and not making any income right now, and she said that was even worse and that they will take 100% of my contract money!!! Now I can’t eat or prosper as a business, cuz i owe some major multi-million-dollar corporation a ridiculous amount of money totally overcharged while I am bordering on survival?!?!?!

    I asked about a payment plan and she replied there is no option and I have to get money off my friends, family and/or loan…..listen honey, how am I gonna get a loan when the reason I am talking to you in the first place is because I couldn’t afford $150/mo for a cell phone?

    Basically, I am a student who just finished school, I’m trying to start a business, haven’t found a f/t job to be able to do both, so money has been tight, and I can’t get a payment plan happening here?

    Some may argue that it is my fault for signing a contract. This is true, I understand and accept this. But there is a certain line that divides fairness and being taken advantage of, pouring salt on the wounds. As the argument has gone, siding with Telus, is that it cost the company $ for the phone and admin. OK, that’s fine…to an extent, but let’s evaluate. The value of my PC phone was approx $550-$600 retail, but there are 2 reasons I should not be paying even the amount to cover that. First, buying bulk…and I mean tens of thousands, there are obviously major discounts associated with that and they are way overcharging what they are worth to the company (min. 300%). Granted they should make some profit off that, but not grossly.

    Secondly, the next generation of the same model was fresh on the market so I was doing them a favor by getting rid of old stock and the value was certainly not $550 any more. Besides, I can buy a new computer for the price of that….desktop or laptop. A point to make about admin is that the amount of actual customer service time was minimal and yes, there is commission…but really, this is a cost that everyone incurs in all business. Maybe not commission, but that is just incentive, that isn’t really something to be hung up on unless these sales reps make $50 extra for each phone…yeah, right. The cost of having employees is a writeoff, not only in revenue to the tax man, but every person you pay just to be present at the store location equals major profits for the company. When I get big enough to have employees, that means I am doing really well and if I didn’t have them I would be not making all that much. What I pay out is basically a fee for having huge benefits.

    My product cost me $500 (dealer cost) and I sell for $750 to be competitive….and that’s per unit, something that will last for years and provides a function…I get a standard cell phone…talk for a few hours and I have incurred enough charges to pay for almost 2 of my products retail or close to 3 my cost!!!

    The small guy will never win. And I will never give my money to these companies again…no contracts with any cell phone provider and avoid loans except a mortgage. I firmly believe that no one should live beyond their means…ever. That’s cuz one wrong, innocent mistake can cost you severely. This whole situation has just brought more negativity into this world. It would be a different story if I was treated fairly.
    My two cents

  10. Nicole

    Aug 30 2007

    I replaced my phones under duress from my ex-partner. I had completed almost 3 years of a previous contract on the phones I needed to replace. My ex got physically abusive with me and broke all the landline phones and cell phones in the house while I was trying to call for help. To add insult to injury he forced me to replace the phones he destroyed.

    Long story short, I had a contract on 2 new phones which I couldn’t afford (I had just given birth to my son when I went into a domestic abuse shelter). My ex wouldn’t leave my home and Telus charged me early termination fees on both phones. I only had one phone in my possession, as my ex wouldn’t provide me with the second one so I could try to sell the phones and the contract.

    I now have to pay over $2,000 to Telus for a phone I never used. They were totally unsympathetic to my financial circumstances. They should have an option to hold the contract, with a clause to resume it at a later date. I would have been more than willing to honor my contract once I returned to the workforce. As far as I am concerned, the company is absolutely heartless. I will never sign a contract will any other service provider again. So in the long run, these companies will lose once the public begins to see how they operate.

  11. Catsmeow

    Sep 13 2007

    I was informed this morning (Sept. 13) that on Sept 17, my Telus Pay and Talk phone will no longer be usable. Telus said I would have to go on a monthly plan in order to have service. I bought the phone a short time ago because I wanted the Pay and Talk. I seldom use a cell phone and it’s not worth it for me to have a monthly plan.

    Are there any regulations governing cell phones? Shouldn’t they have to give a longer notification period for ending the service?

    I asked the Telus operator what’s happening to all the Pay and Talk phones still in the stores? She said Telus would not activate them. So, how can Telus get away with offering a Pay and Talk phone in the stores, but then not providing activation, thus forcing the consumer to pay for a monthly plan?

  12. Bell Employee

    Nov 3 2007

    First off, a lot of you are complaining about the same thing over and over and still don’t get the point.

    The Terms and Conditions: Read them. They are printed off to you along with the actual page you sign. On the paper you sign, it clearly states, “by signing the above, you agree to the terms and conditions.”

    So when you move to Yellowknife, have an abusive boyfriend, make some long distance calls, you won’t be surprised. If you don’t want to read them there at the store, read them online before going to the store. Just because something happens in your life where you can’t pay for the phone doesn’t make Telus a bad company because they won’t let you out of your contract, which you agreed to.

    [Catsmeow said: I asked the Telus operator what’s happening to all the Pay and Talk phones still in the stores? She said Telus would not activate them. So, how can Telus get away with offering a Pay and Talk phone in the stores, but then not providing activation, thus forcing the consumer to pay for a monthly plan?]

    Buy the phone at regular cost and call the activation line and activate with a rep on the phone.

    Nicole, it’s not the companies being heartless. They’re running a business. Next time, get a 30-day contract or go on prepaid. Cell phones cost consumers what tops $400 for a non-data device. The actual prices for these cell phone companies is $500-$800 a phone and that’s without programming fees.

  13. Rick Thompson

    Nov 11 2007

    There needs to a class action suit brought against Telus and other providers to change the way things are done.

    I can understand Providers needing to recover their costs for subsidizing the phones. I’m quiete certain that a court ruling would look at the fact that Telus more than just recovers the subsidy of phones, but is punishing any customer who wants to leave them.

    The costs of these phones are very much inflated as to the real cost to the companies. I can see a reasonable return on their investment should be warranted. Cell phones are used month to month and billed month to month, even if there is a contract in place.

    The fairest way to handle this would be to charge for the price of the phone if the contract isn’t finished to term.

    It was the Canadian Government that forced the cell providers through Local number portability to allow consumers to keep their phone numbers when they migrated. This was to allow us more freedom to choose the service provider that we wanted to deal with.

    The outrageous costs that Telus charges for cancelling are punitive, as they have no cap and add $20 a month to the end of the from leaving for a better option, or in this case a reasonable option.

    The government should be looking at this as Telus thumbing its nose at the idea of consumers having choice.

    What else is new? Telus fought hard and lost the battle to keep control of the telephone monoply that ity built by buying out smaller competitors.

    Transfering your telephone may seem reasonable to most. I would defintely read the fine print when it comes to Telus, to ensure you are not on the hook for future costs attached to the new phone user.

  14. SCott

    Nov 26 2007

    I have a similar problem with Telus and I will send some email shortly. Here’s the Coles Notes version.

    A year ago, I went into the local Telus store. I was outside of my contract, looking for a new phone, but really wanting to know when the BlackBerry was coming. “Roughly a year or so…” Great, I’ll wait around and see you then. No need, says the sales person, You can renew with us and after 6 months, you can switch phones to the BB if it becomes available, especially since it’s data. Splendid, I thought.

    Turns out the policy changed and Telus doesn’t have to let everyone know. I spoke to a great rep of Telus (service has ALWAYS been the pillar of this business) and while he agreed 100% that I wasn’t lied to, the policy has changed.

    So I’m stuck with 23 months left on this contract until I can “upgrade” to a the Pearl I was waiting for. I have a device credit that they will apply to it, but at full cost… yet they will take a new client at $129 over 3 years.

    I’ve been with Telus for around 8-10 years. I am so infuriated at being lied to that I plan to take my business elsewhere and pay the cancellation fee. I had no intentions of getting out of the contract until now. I simply wanted Telus to honour what was sold/promised to me by their store employees. The agent I spoke with, however, was great, and wanted to give me the offer I was originally promised, but his boss axed it as me wanting something “free.”

    I don’t want something free. In fact, I intend to increase my monthly billing by taking on the new device. What I want is for Telus to stop agreeing that “until 6 months ago, you could switch. Now you have to pay full price.”

    Telus is more committed to new clients than longstanding clients. I didn’t get an answer to that one, but terrible customer service. Ellen, I’m going to send you some mail. Do you think you could help? Can a company legally inform you of a change that you can have only to renege without any drawback? Terrible business practices. I don’t want to switch away, I enjoy Telus but I do not enjoy being lied to.

    As was stated to me, I can leave if I want. Unless Telus, or Julie, wants to make it right, I’m outta there.. I don’t care that the cancellation fee will cost me, it’s the principle. I have many more years of cellular services to pay for and it won’t be to Telus….

  15. Carol

    Feb 9 2009

    When was the last time anyone read all the fine print of a contact?

    My husband’s brother and sister-in-law actually missed a flight because she insisted on reading the entire contract on her paper ticket.

    I obtain consents for surgery from patients and advise them they do not have to read every single word of the consent form. The reason is because, according to the Canadian Medical Protective Association, a consent form is not a piece of paper. The written consent is merely tangible proof of a relationship and an understanding between the doctor providing the service and the patient receiving it.

    For example, the surgeon is not permitted to leave the patient lying on the operating table in the middle of surgery to go out to do personal banking (and yes, this has actually happened). This does not have to be stated in writing on the consent form.

    If the surgeon was able to obtain written consent from a patient permitting him to do this very thing, it would not stand up in a court of law. The reason is that society does not expect the patient to be an expert in medicine and therefore does not place the responsibility upon the patient to have detailed knowledge of what a responsible surgeon would do during surgery.

    In this constantly changing, high tech world in which we live, it is not reasonable to expect that we all become experts in every field. We rely on experts in government regulatory agencies to protect us from predatory practices.

    I am not an expert on cellular networks. I signed a contract in good faith assuming and trusting that Telus had every intention of providing me with reliable cellular phone and wireless service on my Blackberry.

    The fact that I lose more calls and do not reliably receive emails when at my home in West Vancouver, a mere 10 minutes from downtown Vancouver (not the Northwest Territories, for goodness sake), in my mind is a breach of an appropriately assumed exchange of fee for service between myself and Telus.

    I do not feel that Telus intended to breach our arrangement. However, by failing to provide what most of us in any urban centre have come to expect as appropriate service, it did so. I feel the appropriate action on Telus’s part is to release me without penalty from a contract that any reasonable person should admit they are not honouring on their end, no matter what the fine print says.

    By the way, my husband’s Rogers iPhone NEVER drops calls or wireless service.

  16. sybil

    Mar 10 2009

    how can i get rid of telus long distance and interner i never signed a contract ,

  17. Mike Arnold

    Sep 11 2010

    I am into month 6 of a 2 year contract with Telus for a mobile internet key. I pay 50$ a month for 2 GB.

    Videotron (a Quebec company) just launched their 3G+ service and is offering their internet key for 25$ per month for 3 GB.

    I contacted Telus earlier today and they told me that it will cost me 380$ to cancel my service. I will be saving a few bucks by cancelling and will be getting 1 extra GB per month.

    I say ‘to hell with Telus’. I won’t let the door hit my butt on the way out!!