You are dealing with a company offering telephone services in order to obtain a plan allowing you to enjoy unlimited data for a period of two years. Over the past year, the company informs you that from now on, you will only be entitled to 10G only that a fee will be charged when the limit is exceeded. You are also offered the option of terminating the contract, provided that you pay a compensation fee.
Does the telephone company have the right to do so by claiming higher costs than those initially provided for in the contract?
Mr. Lambert looks into this issue and explains your rights as a consumer using clear examples from case law.
Unilateral rate increase in a fixed-term contract
The Civil Code contains several provisions to protect buyers when they enter into a contract, especially in cases where it is a consumer or membership contract. These actions seek, for example, to annul any terms that the court considers to be unfair to the consumer or the member.
It should be understood that in this type of contract, it is rare that both parties have the chance to negotiate. Rather, it happens that the buyer submits to the conditions issued by the seller, who finds himself in a more advantageous position than his co-contractor. This explains the legislator’s protective attitude towards the consumer and justifies the adoption of measures to balance the relationship between the consumer and the merchant.
It is obviously with this goal in mind that the Consumer Protection Act was adopted. This law guarantees more rights to consumers than the Civil Code and imposes stricter obligations on traders that they must respect if they are not sanctioned.
In particular, article 12 of that law prohibits the merchant from claiming additional costs if the price has not been clearly and precisely mentioned in the contract at the time of its formation. That is to say, a clause notifying the consumer of a possible tariff increase must mention not only the amount of the increase, but also the frequency with which it will occur.
It is also interesting to know the existence of section 40 of the same Act when dealing with this issue, since it requires the merchant to offer a good or service in accordance with the description made in the contract.
In order to illustrate these rules of law and to make some clarifications, we will discuss cases similar to the example mentioned earlier in the article.
Telus Class Action
In a 2014 case, Telus decided to start charging $0.15 per incoming text message when previously concluded contracts guaranteed unlimited texting. The company defended itself by stating that users had been notified 30 days in advance of the service change, in accordance with the clause in the contract that allowed rates to be increased provided they had informed by notice. However, the Court decided that this clause was unlawful as it contravened section 12 of the Act.
Indeed, the Office de la protection du consommateur explained that the purpose of this provision of the Act is to enable consumers to fully understand the scope of the contract and the sums they will have to pay in order to obtain the good or service in question. However, with a clause as vague as that found in Telus’ contract, this was not possible, since neither the frequency nor the amount was specified.
In the same case, Telus gave customers who did not wish to continue with the new terms and conditions the opportunity to terminate the contract on condition that they paid the compensation fee of up to $700. This provision was equally illegal since the law provides that in situations where the tariff is increased unilaterally, the consumer must have the option of being able to terminate the contract free of charge.
The Court then compelled Telus to make amends for the damage that this pricing policy caused to the class members by reimbursing the fees collected illegally.
Promotion period
It is also possible that merchants, through promotional or trial periods, may be subject to illegal withdrawals from consumers.
Indeed, it often happens that for promotional purposes, a retailer or merchant lets you try a product for free or at a reduced rate for a set period of time. At the end of this period, you must then make the decision to obtain the product at the current price or not to do so.
This is a popular method with entertainment service platforms such as Netflix or Spotify that offers you, for example, 1 to 3 months of free trials. There is no problem with this policy from the point of view of the law. However, at the end of the allotted period, the merchant must respect his commitment and terminate the contract.
Section 230 (c) of the Act prohibits a merchant from requiring the consumer to give notice that the consumer does not wish to obtain the product in question. In other words, the seller or supplier does not have the right to start direct debits once the trial or promotion period has ended, unless the consumer expresses a positive interest in continuing the contract. The merchant cannot interpret the customer’s silence as a clear manifestation of his consent, which is an essential element in the formation of a contract.
Your recourse as a consumer
Article 272 of the law offers several remedies to consumers who have not had their rights respected by traders. Among other things, it is possible to cancel the contract or terminate it free of charge in addition to claiming damages if damage has been caused by the illegal practice of a trader.
For more information on your rights, do not hesitate to contact our firm. In some cases, class action may be possible.
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