The Competition Bureau is suing Canadas three biggest wireless carriers and an industry association for allegedly misleading consumers about the cost of premium texting services.
The watchdog accuses Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T), along with the industry group that represents them, of enabling third parties to sell trivia questions, ringtones and other services without adequately disclosing the cost.
Those can cost up to $10 per transaction and up to $40 for a monthly subscription over and above standard texting plans, the bureau said in a release Friday.
Our investigation revealed that consumers were under the false impression that certain texts and apps were free, said bureau commissioner Melanie Aitken.
Unfortunately, in far too many cases, consumers only became aware of unexpected and unauthorized charges on their mobile phone bills.
The bureau is seeking $10 million in penalties from each of the companies, and $1 million from the Canadian Wireless Telecommunications Association.
It also wants full refunds for customers, a stop to advertisements that dont clearly disclose the price of the premium-rate digital content and a corrective notice informing the public about any order issued against them.
The suit, which follows a five-year investigation, is before the Ontario Superior Court of Justice. The allegations have yet to be tested by a court or tribunal.
The wireless carriers dont make or control the text messaging services in question, but manage the billing on behalf of third-party creators and operators, the CWTA said in a release.
The group said it had approached the Competition Bureau a year ago to seek guidance on how to make sure third-party advertisers are being honest with consumers.
We were therefore extremely disappointed to receive an ultimatum to either enter into a specific settlement agreement or face immediate litigation, the release said.
The Competition Bureau is choosing to pursue a costly adversarial path that will ultimately yield no net benefit to consumers, while at the same time is refusing to pursue those advertisers who make the statements at issue and who are legally responsible for them.
The CWTA says some of the premium text services that are valuable to consumers, such as weather alerts and sports scores, and charitable donations are at risk of being disrupted.
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