Black market dealers reveal secret to super cheap cellphone plans

Some black market dealers have spilled their secrets to CBC News, revealing how they can offer Canadians cellphone plans at almost half the regular price in many provinces.

"It's pretty easy," says third-party dealer Jamie Walker in Toronto. "I say anybody could do it if they're good with technology."

Walker offers any Canadian a Koodo or Fido cellular deal with unlimited Canada-wide calling, texting and a big 5 GB data package for just $48 a month. The cost of those plans is $90 to $95 a month in most provinces.

However, both companies charge only $48 for the same deal in Saskatchewan and Manitoba, where there's more competition among cellular providers.

Walker admits what industry experts have long suspected — that dealers like him switch over people's phone plans in other provinces to Saskatchewan or Manitoba so they can access the cheaper rates.

He charges a one-time fee of $100 to do the deed.

Gaming the system

"You can do it all within a day," claims Walker, about obtaining the $48 deal with Koodo, a discount brand owned by Telus.

This is how it typically works: he has a customer — say in Toronto — keep her current cellular deal and also sign up for the $90 Koodo plan offered in Ontario.

Then, on Koodo's website, Walker requests for the customer a Manitoba or Saskatchewan phone number. He says that qualifies the person for the lower $48 price for the same plan offered only in the Prairie provinces.

Walker then makes a request for Koodo to port or transfer the customer's Toronto phone number from the person's original phone plan. That process cancels the customer's initial cellular deal.

So, according to Walker, the person winds up keeping her original Toronto phone number, but now it's attached to a $48- a-month Koodo plan that should actually cost $90 a month — savings of $504 a year.

Walker says the process is so simple, people can do it themselves on Koodo's website. But he claims many customers still choose to pay him to do the job.

"Some people just don't want to do it because they're lazy. Some people are scared they're going to mess it up."

Third-party Edmonton dealer Raphael Mlynarski says he has a steady flow of customers coming to him for the $48 Koodo deal. He recently set up his service, Stop Getting Screwed! Cellular, and charges a one-time fee of $100.

Mlynarski, who is based in Edmonton, is open about the process on his company website.

He calls what he offers an "inter-province phone plan," describing it as a "Saskatchewan or Manitoba plan with a B.C., Ontario, or Alberta number."

"The lack of competition in some Canadian provinces makes reasonably priced plans difficult to obtain," Mlynarski tells CBC News. "The fact that this pricing isn't consistent across Canada leads to opportunities for people to save money."

Another Toronto-based dealer, whom we'll call John, claims that the business of connecting people with the $48 Koodo deal has become so lucrative for him that he's considering quitting his day job. John asked us to conceal his identity because he currently works for one of the big three telcos.

On the side, John runs his business, Cell Savings Canada, and charges a flat fee of $85. He suggests Telus hasn't cracked down on the black market industry because it's good for business.

"They're probably letting it continue because they're getting a lot of new customers that way," says John. "I'm bringing them business from the other providers."

When CBC News first reported on the black market cellular industry last year, Koodo's owner, Telus, told us that it was "looking into the practice."

CBC News asked Telus why, one year later, third-party dealers claim they're still facing no roadblocks with the company.

The company did not respond to our repeated requests for comment.

Rogers cracks down?

Walker says getting customers the $48 Fido deal is similar to the Koodo process.

However, he claims that about two months ago, Rogers — the telco that owns the discount brand — started cracking down on black market dealers. He says the company is preventing customers from getting a phone number outside the province where they got their phone plan.

"It's a lot harder with Rogers," admits Walker. However, he claims he's found a workaround to still get any Canadian the cheaper Fido deal. He wouldn't provide details on how he does it.

When asked for comment, Rogers told CBC News that nothing about how it validates its phone plans has changed.

"Our customers' plans are based on their home address and we urge them to use caution" when exploring third-party offers, said Rogers spokesman Andrew Garas in an email.

"Sharing personal information can result in fraud."

Walker believes warnings from the telcos won't stop the black market business. He suggests the only foolproof way would be for phone providers to offer more affordable cellular plans in all provinces.

According to a recent CRTC-commissioned report, Canadians still pay some of the highest rates for wireless services in the industrialized world.

"People are always looking for ways to get their cellphone bill down," says Walker. "If the prices were definitely lower, I'd definitely be out of business and with good reason."