Another class action has just been filed against a telephone company. This time it is Telus, continued for its clauses imposing contract termination fees that the Court of Appeal of Quebec has just declared “clearly abusive”, forcing the company to refund a portion.
A judge initially dismissed the lawsuit in 2017, but the Court of Appeal has corrected the situation by welcoming it in part this week.
Only the fees paid on the termination of fixed-term contracts (for example, a three-year plan) for telephone services in Québec for contracts concluded before June 30, 2010 are covered.
One of the plaintiffs, Éric Masson, had paid $ 100 to terminate his wireless contract, approximately one month before the scheduled end, and the other, Claude Gauthier, had to pay $ 560 to terminate a contract to wired and Internet telephony. They represented two groups of customers who wanted to recover the money paid.
Telus Mobility (TM) and Telus Communications Company (STC) submitted that the fees charged are not unreasonable as they are less than the early termination of these contracts costs them. A judge of the Superior Court had proved them right and had rejected the class action.
But after reviewing the contracts, the Court of Appeal stated that the termination clauses are indeed “abusive”. These are prohibited by the Civil Code of Quebec and the Consumer Protection Act. A clause is abusive when it puts the consumer at a disadvantage in an excessive way, thus going against what is required by good faith.
A customer has the right to unilaterally terminate his contract, recalls the Court, and the assessment of the unfairness of the termination clause must take into account the economic balance between the parties, including the number of persons concerned, and disproportionate nature of this clause.
The Court of Appeal thus calculated that the average loss sustained by Telus Mobility in the event of termination of the pre-term contract was $ 226.71 – whereas it had invoiced its clients on average $ 338.41 – and that the average loss suffered by Telus Communications Company was $ 201.38, while it had billed an average of $ 278.24.
For example, Mr. Gauthier had to pay $559.87, which is $358 more than the average loss suffered by Telus Communications Company.
“The termination clauses are clearly abusive. They allow TM and STC to claim cancellation fees that substantially exceed the damages suffered as a result of the early termination of the contracts. They disadvantage the consumer in an excessive and unreasonable way. For TM, the clause allows it to claim about 49% more than the damage suffered, and for STC, the surplus is about 38%,” writes the Court of Appeal in its judgment.
But since not all clients paid the same fees – some did not even pay any – the Court of Appeal decided to refer the file to a judge for the terms and conditions of the members’ repayment. have paid termination fees in excess of $226.71 in the case of TM and greater than $201.38 in the case of STC.
Contacted Thursday by S4Tips Telus said it was analyzing the decision of the Court of Appeal.
“We have always been transparent about termination fees and how they were calculated, both in our advertising and in our customer billing information and in our conversations with them,” the company said in an email.
In the past, other telecommunications companies such as Bell Mobility and Rogers have also been ordered to reimburse customers for termination charges on their cell phone contract deemed excessive.
The Consumer Protection Act was amended on June 30, 2010 to set the fees applicable when the contract was terminated, which was not the case before, the Court recalls in its judgment.
