The Competition Bureau Friday sued Canada’s three largest wireless carriers and a telecoms industry association, seeking a total of $31 million in customer refunds and administrative penalties for allegedly misleading advertising.
The consumer watchdog said it was taking legal action after a five-month investigation into the companies’ advertising of premium texting services. The allegations have yet to be tested by a court or tribunal.
The federal agency is seeking $10 million each from Bell (TSX:BCE), Telus (TSX:T) and Rogers (TSX:RCI.B). It is also seeking $1 million from the Canadian Wireless Telecommunications Association (CWTA), the industry’s main lobby group.
“Our investigation revealed that consumers were under the false impression that certain texts and apps were free,” said Competition Commissioner Melanie Aitken.
“Unfortunately, in far too many cases, consumers only became aware of unexpected and unauthorized charges on their mobile phone bills.”
The telecoms companies were not immediately available for comment.
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In a statement, the CWTA blasted the watchdog saying the “bureau is choosing to pursue a costly adversarial path that will ultimately yield no net benefit to consumers.”
“Wireless carriers do not make or control the text messaging services,” but “manage the billing” for such services, the CWTA said. The body said it was an “unprecedented demand that CWTA and wireless carriers accept liability for third-party advertisers.”
Both Bell and Rogers faced similar charges in suits filed by the Competition Bureau in 2010. Bell agreed to pay the $10-million penalty, while Rogers is pursuing an appeal through the courts.
About the author
Joyanta Acharjee has worked for over 10 years as a financial journalist in the UK for Dow Jones, AFX News and Thomson Reuters and joins from BNN – Canada’s Business News Network. He has covered corporate news and was a correspondent following the hedge fund industry in Europe and the UK. His work has appeared in The Wall Street Journal Europe, The UK’s Daily Telegraph and Fortean Times magazine. A British citizen, he is based in Toronto.