Do you own a cell phone? Then you may be in for a refund. At least you could be if a class action lawsuit certified in Saskatchewan this week pays off down the road. It centres on an old practice of collecting "access fees" that all the major providers charge customers. The fees, which can range from $6-$8 or more per month, were originally applied when the mobile phone business was just getting started to help pay for building their networks.
Over the years the need for the charge ended but customers are still paying it, with many being told it's part of a government requirement. That's what sent lawyer
Tony Merchant on the warpath, and a court finally certified the suit on behalf of consumers after he originally started it three years ago.
Published reports indicate the cell phone companies are raking in more than a billion dollars a year from the supposedly discontinued charge, and all of that is coming from the pockets of subscribers. The companies insist the money is going to upgrade and maintain their networks, but Merchant complains it's not reflected on their bills and some owners aren't even aware they're paying it, while others are being told the government requires them to.
"Being granted "certification" is a substantial milestone, and our firm will continue to vigorously prosecute litigation on this issue on behalf of all Canadians who have been made to pay the system access fee (and similarly described fees)," Merchant writes on his website. "We intend to establish that Canadians were generally misled to believe that access fees were collected as a government tax or CRTC levy."
The companies named in the suit - including
Bell Mobility,
Telus and
Rogers - all maintain they've done nothing wrong and don't believe the case should be allowed to proceed. At least one of them, Rogers, intends to appeal the ruling that allowed the class action to go through.
Some experts suggest that if the firms named don't manage to stop the suit through appeals, they may be forced to settle before the case ever reaches court, because there are simply so many cell phone owners that would have to be paid off in a judgment that it could be financially disastrous. Merchant alleges the companies collected at least $12 billion - plus interest - over the years that they weren't entitled to.
But while certification of such a legal move is a major step forward, it doesn't mean the case will proceed or that you're in for a large windfall. In many instances, those that do pay off return a small amount to each consumer who takes part, while the lawyers often wind up getting the biggest chunk of change.
Merchant is no stranger to these kinds of things. The Regina-based lawyer has launched dozens of similar suits in the past, including cases aimed at
Winners and Home Sense over their alleged failure to protect credit card information and at
Conrad Black back in 2004 - before his infamous legal troubles - over what were then allegations he defrauded Hollinger investors and stockholders.
Some of his more recent cases involve a suit against
Fisher Price for the lead paint found in some of its more popular toys, and action against
pet food companies whose products resulted in the death of some dogs and cats.
How to join the cell phone suit
Read the court decision here (.pdf file)
What is a class action lawsuit?