The Competition Bureau (the "Bureau") announced on
March 16, 2015, that Rogers Communications Inc.
("Rogers") has agreed to pay $5.42 million in refunds to
consumers in connection with "premium text messaging"
charges on their wireless phone bills. This settlement was made in
connection with proceedings brought by the Bureau regarding whether
the fees for the services in question had been adequately disclosed
In September 2012, following a five-month investigation, the
Bureau commenced legal proceedings against Bell Canada
("Bell"), Rogers, TELUS Corporation ("Telus")
and the Canadian Wireless Telecommunications Association
("CWTA"), alleging that they had engaged in misleading
advertising associated with for fee "premium texting
services." The remedies sought by the Bureau included both
full customer refunds and administrative monetary penalties
("AMPs") of $10 million each from Bell, Rogers and Telus,
and $1 million from the CWTA.
According to the Bureau, Bell, Rogers and Telus, in conjunction
with the CWTA, facilitated the sale to their own customers of
premium-rate digital content (e.g., trivia questions and ringtones)
without properly disclosing the fees for these services –
specifically that customers were mislead into believing that these
services were free (the services at issue cost up to $10 per
transaction and up to $40 for a monthly subscription above standard
rate plans). As a result, the Bureau alleged that wireless
customers had incurred fees for services that they did not intend
to purchase and for which they had not agreed to pay. The Bureau
also took the view that an aggravating factor was that Bell,
Rogers, Telus and the CWTA led customers to believe that measures
were in place to prevent these unauthorized charges.
Overview of Settlement
Under the terms of the settlement with Rogers, the Bureau has
agreed to discontinue the legal proceedings against Rogers. The
proceedings against Bell, Telus and the CWTA remain ongoing.
The $5.42 million in refunds will apply to Rogers and Fido (a
discount wireless service operated by Rogers) customers who
incurred charges for certain premium text messaging services
between January 1, 2011 and August 31, 2013. Further, Rogers has
agreed to cease billing for premium text messaging services unless
the customer has approved the charges.
Rogers has also agreed to:
Create a Consumer Awareness Campaign
to educate its customers about how charges can be incurred on their
wireless devices and the steps that can be taken to avoid unwanted
charges, including safety tips for online purchases; and
Strengthen its corporate compliance
program with respect to billing customers on behalf of third
This case is noteworthy for several reasons. First, it clearly
shows that misleading advertising continues to be a priority
enforcement area for the Bureau and comes a week after the Bureau
commenced legal proceedings against Aviscar, Budget and their
parent company, Avis Budget Group Inc. for allegedly engaging in
misleading advertising (
click here for our blog post on this topic). Second, as
evidenced from the settlement amount agreed to by Rogers, the cost
for businesses having engaged in misleading advertising can be
significant (in addition to reputational harm). Third, businesses
need to ensure that the pricing information disclosed to consumers
is clear and accurate, including with respect to any fees charged
by third parties through their service. Finally, it signals the
Bureau's ongoing consumer protection focus in the
telecommunications sector, and with respect to digital/mobile
In light of this announcement and recent enforcement action by
the Bureau in the area of misleading advertising, businesses should
be careful on how they advertise their services and those of any
third parties using their service/platform. In particular, it
emphasizes the need for companies to properly disclose fees and to
ensure that the disclosure is appropriate to the platform on which
consumers are likely to make purchases.
For a link of the Bureau's press release, please click here.
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