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How to calculate your cancellation fees with your wireless provider

how-to-calculate-your-cancellation-fees-with-your-wireless-provider

The CRTC’s wireless code came into effect on December 2, 2013. The Code limits the early cancellation fees that wireless service providers can charge. The following questions will help you better understand these fees and how they may affect you.

1. Did you get a new device or sign a new wireless contract on or after December 2, 2013?

If you signed your contract before December 2, 2013 and have not changed it (by upgrading your device, or by renewing or extending your service), the Code will apply as soon as you amend your contract or sign a new one. The Code will also apply to all contracts as of June 3, 2015.

2. Did you receive a phone or other device at a reduced upfront price?

Service providers often charge less upfront for a phone when you sign up for a contract. This is commonly known as a device subsidy.

If you did not receive a device subsidy, proceed to question 4.

3. If you received a device subsidy, how long is your contract term?

Fixed-term contracts are usually offered for 1, 2 or 3-year terms. Indeterminate contracts have no set duration.

For fixed term contracts, the Code limits early cancellation fees as follows:

  • the fee cannot be greater than the amount of your device subsidy;
  • the fee must reduce each month and reach $0 by the end of your contract.

If you want to cancel before the end of your term, the fee will be based on the time remaining on your contract.

For example, if you signed a 2-year contract, received a $300 rebate on your smartphone, and have 12 months remaining on your contract, your cancellation fee cannot exceed: $300 x 12/24 = $150

Your contract should explain how to calculate this amount. If you don’t know the exact fee you would pay to cancel today, contact your service provider.

For indeterminate contracts, The Code limits the early cancellation fee as follows:

  • the fee cannot be greater than the amount of your device subsidy;
  • the fee must reduce each month, and reach $0 within 24 months.

Your fee will be based on the time since you signed your contract. However, your cancellation fee may decrease in different ways.

  • By an amount equal to a percentage of your bill (commonly known as a “tab”).
  • By an equal amount each month.

Your contract should explain how to calculate this amount. If you don’t know the exact fee you would pay to cancel today, contact your service provider.

4. If you did not receive a device subsidy, how long is your contract term?

Fixed-term contracts are usually offered for 1, 2 or 3-year terms. Indeterminate contracts have no set duration.

For fixed-term contracts, the Code limits your cancellation fee to $50 or 10% of the remaining monthly charges under your contract.

Your early cancellation fee cannot exceed the lesser of these two amounts. Once you reach the end of the contract, you cannot be charged any cancellation fee.

For indeterminate contracts, your service provider cannot charge you an early cancellation fee.

Do you have other questions about your wireless service? Contact ProfitPoint Communications – we can help.

How to calculate your cancellation fees with your wireless provider was last modified: December 18th, 2015 by Josh Laur

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