Illegal Cancellation Fees Claimed in Telus Communications Class Action Lawsuit

A class action lawsuit alleges Telus Communications has charged illegal cancellation fees to customers who have terminated cell phone contracts. Customers who have paid for services in advance and have not received prorated refunds are seeking millions in damages to redeem their losses.

No Refunds, No Rebates After Cancelled Contracts

Plaintiff Marjorie Nelson had a monthly contract with Telus Communications Inc. for her personal and household use.

Nelson was billed the fifth of every month. In Nov. 2017, mid-month, she cancelled her Telus contract to switch to another communications provider. 

The illegal fees class action lawsuit claims Nelson received her final bill on Dec. 5, 2017, and the bill didn’t give her a rebate or refund for her November balance. The bill also did not mention a right to receive a refund. November’s bill was $90, paid in advance, and because Nelson cancelled her contract in the middle of the month, she should have received a prorated bill, according to the illegal cancellation fees class action lawsuit. In essence, Nelson paid for half a month’s worth of services she did not receive. 

According to the Telus illegal fees class action lawsuit, the company’s contract says it is entitled to keep monthly charges paid by customers before termination. 

The clause reads, “If you cancel your service or if TELUS cancels it for reasons justified under the Service Terms, you remain responsible for any applicable cancellation charges and for all amounts chargeable to your account up to the time the service is cancelled. Any recurring charges that were billed at the beginning of your billing cycle or any credit balance under five dollars will not be refunded when your service is cancelled.”

The Telus illegal fees class action lawsuit claims the company is breaching the Telecommunications Act for not giving Nelson and Class Members prorated rebates after the termination of contracts.

Telus Cancellation Fees Breach Canadian Laws

The Canadian Radio-television and Telecommunications Commission (“CRTC”) has established the guidelines of cellphone contracts under the Federal Telecommunications Act, which includes the Wireless Code, and the Ontario Wireless Services Agreements Act (WSAA).

The guidelines govern cancellation fees charged to customers and specifically, the Wireless Code stipulates how cancellation fees can be charged, when refunds must be paid, and when rebates are due if a customer cancels having already paid in advance.

According to the Telus illegal cancellation fees class action lawsuit, if a customer cancels a contract and has paid in advance, the customer is entitled to a pro-rated refund for the time services went unused. 

An example from the Telus illegal cancellation fees class action lawsuit explains that if a customer’s bill is $50 monthly and is paid in full, and they cancel a cell phone contract in the middle of a month, they will be owed $25. 

Early Cancellation Customers Are Entitled to Rebates

Cell phone providers used to bill customers at the end of the billing cycle but more recently, monthly agreements are billed in advance for the next month. This way, when customers cancel in the middle of the month, they are due a rebate for the balance they did not use, according to the Wireless Code. 

Sometimes, early cancellation fees are acceptable, such as in fixed contracts, but in all circumstances, pro-rated rebates for unused services are absolutely still applicable, the Telus illegal cancellation fees class action lawsuit argues. Even if a customer faces a legitimate cancellation fee, the rebate they are entitled to can balance out the fees owed. 

Per capita, cellphone service in Canada is some of the highest-priced in the developed world, says the class action lawsuit. The laws were put into place to amend high costs and regulate “double billing”, as in customers paying for terminated service and a new provider’s services at the same time. 

The Canadian cell phone fee laws were created to make it easy for customers to effortlessly switch providers. The laws are meant to stimulate competition, lower consumer costs, and improve consumers’ right to choose, says the Telus illegal cancellation fees class action lawsuit.

Telus Class Action Lawsuit Claims Illegal Fees

The language and guidance of the Canadian laws are clear according to the Telus illegal fees class action lawsuit. Even so, it is alleged that Telus regularly and illegally charged early cancellation fees. Reportedly, Telus has collected millions of dollars in illegal cancellation fees and did not attempt to refund money owed to customers. Furthermore, the customers allegedly did not receive any proclamation from Telus that they had a right to a refund when terminating a cell phone contract.

Telus’ failure to provide Nelson and Class Members with a prorated rebate after cancelling their contracts breaches Canadian cell phone laws.

The Telus Illegal Fees class action lawsuit states the Class Members are entitled to recoup their losses for the cell phone provider’s actions. The Class Members are seeking $10,000,000 in damages for illegal cancellation fees.

Have you ever been charged a fee for cancelling a contract with Telus early? Did you receive a rebate? Tell us your story in the comment section below! 

Nelson and Class Members are presented by Douglas Lennox of Klein Lawyers LLP.

The Telus Illegal Fees Class Action Lawsuit is Marjorie Nelson v. Telus Communications Inc., Case No. CV-1858951800CP, in the Superior Court of Justice, Ontario, Canada.

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