During the current pandemic, access to quality telecommunications services is more vital than ever. However, such services are expensive and those who can’t afford them have to put up with inadequate, inconsistent measures.
According to the CRTC, Canadian consumers pay an average of $222.83 a month for telecommunications services. For people on low incomes, that’s an awful lot to pay. What happens when they can’t? Union des consommateurs (UC) took a close look at this issue in a study entitled: “Communication Services: Do we have sufficient recourse prior to disconnection?”
In its study, UC conducted a survey on 2,000 individuals. They were presented with a list of mechanisms for people likely to experience payment difficulties and asked whether they had ever had to resort to them. Almost half of the respondents said they had. “That’s huge,” says study co-author Anaïs Beaulieu-Laporte, who analyzes telecommunications, broadcasting, Internet, privacy and regulatory policies at Union des consommateurs.
A deposit, please
Anyone with a poor or less-than-spotless credit history is liable to be asked for a security deposit—25 per cent of participants surveyed said they had been asked for one; among 18-34 year olds, this proportion was 40 per cent. Many felt this amount to be too high. This comes as no surprise to Ms. Beaulieu-Laporte.
“There’s no cap for most services,” she says. “So when it’s too expensive, people just don’t subscribe. Or, because they’ve spent everything on the deposit, they can’t afford to pay for the service.”
Anaïs Beaulieu-Laporte, telecommunications, broadcasting, Internet and privacy analyst at Union des consommateurs
How long are those deposits kept? As long as the companies deem necessary to protect themselves. They are obliged, however, to check whether the deposit is still necessary—how often they do so depends on the service. For example, it’s every six months for residential telephone service and every 12 months for mobile telephone service. Strangely, there’s no such limit for TV service. “That means you could be asked to pay a security deposit for your TV service, and never know when you could expect to get your money back.”
UC noted other aberrations. For example, one company stated in its contract that people who had to provide a security deposit for a service could not bundle all their services on a single bill. However, bundling those services could have allowed them to obtain discounts! In another place, it stated that the deposit would not be returned to the consumer, but would be used to pay for the services. “But that money belongs to the consumer!” Beaulieu-Laporte says. It should be noted that 81% of the 111 complaints filed in 2017-2018 with the Commission for Complaints for Telecom-television Services (CCTTS) were about non-reimbursement of a deposit.
Treatment of unpaid bills
For those who fail to pay their bills on time, interest is charged, and it is high – up to 42.58% a year. In its study, UC notes that providers with the biggest share of the market are the greediest.
Theoretically, the free market provides adequate consumer protection. But it’s obvious that doesn’t apply to consumers who are struggling to pay their bills.”
One would expect the supplier to send a notice to delinquent payers and give them a certain amount of time to rectify the situation. However, such notices are not mandatory for all services and, when they are, the time allowed varies. “It’s tough to figure out.”
Delinquent payers are also at risk of having their credit score lowered. Telecom companies have the right to get their customers’ credit files annotated, provided that the latter gave prior consent. But is that what they did? Probably not. “At the time of signing the contract, the consumer authorizes the company to check his or her credit report,” says Beaulieu-Laporte. But the contracts don’t specify that, in the event of non-payment, a note could be put in the customer’s file or when this might happen.”
In cases of payment difficulty, arrangements can be made. But UC discovered that there are problems there too. For example, 43% of survey participants who had reached or attempted to reach an agreement felt that what they were offered was unrealistic—either the payments were too big or were required in too short a time.
According to Ms. Beaulieu-Laporte, who also studied the practices of Hydro-Québec and Hydro One (in Ontario), telecom service providers would do well to follow the example of the energy industry, whose agreements take into account the consumer’s ability to pay and who have set in place special rules for low-income subscribers. The rules are very detailed and the criteria are disclosed publicly,” she says. “So you know where you stand.”
Suspension or disconnection of services
Which consumers are most at risk of having their services suspended or disconnected? Here again, there is no consistency. For telephone (residential or wireless) and Internet customers, anyone who accumulates a $50 debt in two months can be cut off. For television customers, there is no set minimum payment or required payment date.
While the disparity between certain rules is sometimes a problem, there can also be a problem when other rules are too similar. $50 covers about two months of home telephone service,” Beaulieu-Laporte says. “But for Internet or wireless phone service, $50 buys far less time.” 40% of survey participants who saw their services suspended or disconnected said their late payment was for an “insignificant” amount.
Another problem: when several services are grouped together on the same bill, how is it possible to know which one is in default of payment or which rule applies? To simplify matters, Beaulieu-Laporte suggests that suppliers always follow whichever rule is most favourable to consumers.
Why so much inconsistency? Telephone services are managed by different CRTC codes, each one applying to a particular service that was adopted at a specific point in time, whether recently, or long ago. On top of that, several provincial laws have different provisions.
Ms. Beaulieu-Laporte believes that the CRTC should issue more consistent, more comprehensive rules, and that this should be done quickly. “My biggest surprise was to find that the rules in place today are so similar to the original CRTC rules from the 1980s. Yet the scale of telecommunications services is far greater than it was back then.”
L’Union des consommateurs conducted the study “Communication Services: Do we have sufficient recourse prior to disconnection?” in 2019. The aim was to document what happens when consumers are struggling to pay their telecom bill and whether the mechanisms in place provide adequate protections, rights and remedies. The study focuses mainly on security deposits, payment agreements, service suspensions and disconnections, as well as annotations that could potentially harm the consumer’s credit rating.
In pursuing this aim, the authors reviewed the history of protection measures for Canadian consumers experiencing payment difficulties as well as the codes of conduct and laws applicable in such cases. They looked at complaints reported to the Commission for Complaints for Telecommunications Services (CCTS) and reviewed the policies of Canada’s major telecom companies. They conducted a survey of 2,000 Canadians representing a cross-section of the population. They studied energy policies in Quebec and Ontario and telecommunications policies in the United States, Australia, France and Belgium. As a result, they were able to identify several gaps and inconsistencies, and go on to make recommendations to the CRTC.