CRTC launches review of cellphone financing plans

News release

Commission is concerned new industry marketing practices may erode protections Canadians have under the Wireless Code

August 30, 2019 – Ottawa–Gatineau – Canadian Radio-television and Telecommunications Commission (CRTC)

Today, the CRTC launched a review of the device financing plans that certain service providers recently introduced or plan to offer to their customers.

While the new financing plans may make cellphones more affordable for customers, the CRTC wants to ensure that Canadians continue to benefit from protections under the Wireless Code as well as take advantage of competitive offers in the marketplace.

In particular, the CRTC is concerned that when customers cancel their wireless service plan, the requirement to pay the remaining balance of their device financing plan could result in the imposition of a penalty or fee.

The CRTC is seeking views by October 15, 2019 on questions such as:

  • What are the benefits for customers of having access to wireless device financing plans that exceed 24 months?
  • How to ensure that device financing plans comply with the Wireless Code’s objectives of making it easier for Canadians to understand their mobile contracts and switch service providers, and of preventing bill shock?

Quotes

“The Wireless Code was introduced to address Canadians’ concerns with their wireless service providers. Although device financing plans may make cellphones more affordable, we want to ensure those benefits do not come at the expense of the protections offered to Canadians by the code. At the end of a two-year service contract, Canadians should have the ability to shop around and take advantage of competitive offers without barriers.’’

Ian Scott, Chairperson and Chief Executive Officer, CRTC

Quick facts

  • On August 2, the CRTC asked all wireless service providers to stop offering device financing plans on terms longer than 24 months until the Commission had an opportunity to complete a full review of the practice.

  • At the same time, the CRTC announced that it would initiate a full review of these new marketing practices.

  • The CRTC will consider whether device financing plans respect the Wireless Code and will take into consideration the principles set out in the government’s policy directions, including the promotion of competition, affordability, consumer interests and innovation.

  • If the CRTC determines that certain device financing plans, including those on terms longer than 24 months, are not compliant with the Wireless Code, it may issue a mandatory order prohibiting wireless service providers from offering these plans.

  • The CRTC also intends to provide direction and guidance to the Commission for Complaints for Telecom-television Services (CCTS) on how to address complaints related to device financing plans, including those on terms longer than 24 months.

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