Bogus Fees Comes Back to Bite Rogers, Bell, Telus
Lawsuit Over 'System Access Fee' Moves Forward
by Karl Bode 11:06AM Friday Jun 29 2012 Tipped by tmpchaos
Just like telcos in the States, Canadian incumbents charge a universe of bogus fees
that simply act to jack up the advertised price post sale. It technically should be a considered false advertising and a crime, but it's something regulators generally couldn't care less about. In Canada, one such fee has been the "system access fee," a fee of up to $9 a month -- charged for absolutely no valid reason. After criticism and lawsuits, some carriers phased out the fee -- only to replace it (like Rogers) with equally bogus "government regulatory recovery fee."
Now it appears that the fee has returned to bite Rogers, Telus and Bell on the digital posterior. Canada's Supreme Court this week refused an appeal by Rogers
to have a lawsuit over such fees scrapped, meaning a class action lawsuit over the fees begun in 2004 can finally proceed:
The decision means a class-action suit originally filed in a Saskatchewan court in 2004 can proceed — with 30,000 people already having joined the case, according to lawyer Tony Merchant. “The ultimate goal is, they were overcharging people, charging people wrongly and we want the money back,” said Mr. Merchant of Merchant Law Group and a lead lawyer in the action.
The fact it has taken eight years for anyone to do anything about these fees tells you plenty about just how serious government is about consumers getting ripped off by such junk fees. ISPs have simply changed the name of the junk fee to "regulatory recovery," claiming it directly offsets the nebulous costs inferred by regulation (ignoring the sweeping trend of deregulation
). The case lawyers point out such garbage fees are quite profitable: in 2004 alone Canadian incumbent ISPs collected $863-million in system access fees, compared with the $126-million estimated to have actually been paid to governments.
The problem of course that aside from buying a few lawyers a new boat, nothing will really change here and companies will continue to charge bogus below-the-line fees. This is really something any regulator worth its salt would address as false advertising, and bogus fees are a prime example of how many regulators are asleep at the telecommunications wheel.
Robbing Peter to pay Paul On the off-chance this lawsuit actually succeeds, the carriers will roll the cost right back onto the backs of current customers. How is this a win for anyone?
Re: What will be result if lawsuit successful? An honestly disclosed price is, to me, the goal. The companies can charge whatever the consumer is willing to pay, it's the advertising of one price and then charging another that's the problem.
Re: What will be result if lawsuit successful? The fact that other industries in Canada have moved to "all in pricing" (airline tickets come to mind as the big one) under the threat of legislation, should have been enough to convince Robellus to give it up.
Most have ironically, on new contracts anyways, which have a higher price monthly but none of this "below the line" nonsense.
However I believe that Rogers still does this via something they call "Government Recovery Regulatory Fee" (GRRF)
"Grrf" is what Rogers et all will be saying once they get smacked down for this deceptive practice.