Rogers contracts push the envelope, lawyer says

Some of the conditions that Rogers Communications imposes on customers in fixed-term contracts are legally questionable, according to an expert at the University of Ottawa.

At issue is the company's practice of boosting service rates for things such as high-speed internet, home phone and cable TV, leaving some customers in fixed-term contracts in the unenviable position of either accepting the new prices or paying expensive fees to end their contract.

That "pushes the line of what is allowed legally," said Anthony Daimsis, a lawyer who specializes in Canadian contract law.

He told CBC's Marketplace that in terms of consumer protection, "it should simply not be allowed — it's what the law would call an unconscionable term."

Rogers stands by the practice, saying in a statement that "provisions allowing us to make changes to rates in our Terms of Service are fair to customers, are clearly disclosed and are in compliance with all applicable consumer protection legislation."

The company also says that customers who sign up for fixed-rate contracts are guaranteed a constant price for the duration of the term.

But customers who are on fixed discount contracts are liable to see their costs increase, if the overall rate Rogers charges for a particular service becomes more expensive.

Many Rogers customers within the latter group were recently hit with a rate hike of $1 to $4 per month for each service they had signed up for. With home phone, cable TV and internet, together the increase could amount to an additional $96 per year.

The price hike has upset people like Barry Cook, who received a letter in the mail stating the price of his Rogers high-speed internet service was rising by $2 a month.

When the Toronto man, who had signed up for a year-long contract offering a 30 per cent discount, called to complain about the price increase he was told he would have to pay $180 to cancel his service.

"Normally when you sign a contract you pay a fee over the course of the contract," he said. "If both parties aren't subject to the same rules, you're kind of screwed really."

Daimsis said the problem is that long-term contracts are supposed to provide certainty about the amount a customer has to pay, but that certainty is "destroyed" if Rogers can change its rates. Yet unhappy customers are unable to leave without paying hefty fees.

Bell and Telus also recently raised their rates by between $1 and $5 per month, but both firms told Marketplace they don't charge a cancellation fee to customers who choose to leave as a result.

Daimsis said that Rogers' fixed discount contracts could be targeted in a class-action lawsuit, which are designed "to give a little more power back to the weaker party — in this case the consumer."