Bill 35 - Cellular Phone Contracts Act

BILL 35

Cellular Phone Contracts Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

INTERPRETATION AND APPLICATION

Definitions

1 The following definitions apply in this Act.

“cancellation fee” means a cancellation fee referred to in paragraph 18(b). (frais de résiliation)

“cell phone services” means, subject to the regulations, wireless communication services or functions that are accessed from a cell phone, including, without limitation, receiving or transmitting telephone calls, electronic data, e-mail or text messages. (services de téléphonie cellulaire)

“contract”, except where the context otherwise requires, means a contract to which this Act applies. (contrat)

“customer” means a person who enters into a contract with a supplier for cell phone services. (client)

“inspector” means a person employed by the government and authorized by the Minister to ensure compliance under this Act. (inspecteur)

“indeterminate contract” means a contract without a fixed term. (contrat à durée indéterminée)

“Minister” means Minister of Justice. (ministre)

“supplier” means a person who enters into a contract with a customer to provide cell phone services to the customer. (fournisseur)

Application of this Act

2(1) Subject to the regulations, this Act applies to every contract for cell phone services entered into on or after the day that this section came into force between a supplier and a customer primarily for personal, family or household purposes.

Application to existing contracts that are extended or renewed

2(2) Subject to the regulations, this Act applies to a contract for cell phone services entered into before the day that this section came into force between a supplier and a customer primarily for personal, family or household purposes, but only if the contract is extended or renewed on or after the day that this section came into force.

Exception - prepaid cell phone services

2(3) Despite subsections (1) and (2), this Act does not apply to a contract for prepaid cell phone services.

Interpretation - amendment of a contract

3 For greater certainty, and for all purposes under this Act, the amendment of a term or provision of a contract

(a) does not constitute consent by either party to the contract to any other amendment of the contract;

(b) does not terminate the amended contract; and

CONTRACT REQUIREMENTS

Contract must be in writing

4(1) A contract must be in writing.

Copy of contract to be given to customer before contract is made

4(2) A supplier shall, before a contract is made and at no additional cost to a prospective customer,

(a) give copies of all documents that compose the contract to the prospective customer; and

(b) give the prospective customer reasonable time to review the documents and ask questions before requesting that the customer sign the contract.

Copy of contract to be given to customer after contract is made

4(3) A supplier shall give to each customer, at no additional cost to the customer, copies of all documents that compose the contract immediately after the contract is made.

Exception - contracts not made in person

4(4) The requirements of subsections (1) to (3) do not apply to a contract that is not made in person.

Definition of “minimum monthly cost”

5(1) In this section and in sections 6 and 7, “minimum monthly cost” means the minimum amount that a customer will become liable to pay under the contract - including all fees, charges, penalties, interest and other amounts or consideration, but not including any municipal, provincial or federal government taxes, fees or levies - in a one-month period regardless of the customer’s usage of the cell phone services available under the contract.

Minimum monthly cost to be expressed on a monthly basis

5(2) The minimum monthly cost is to be expressed on a monthly basis, even if the costs under the contract are calculated on a basis other than a monthly basis, or the billing period is not a monthly period.

Information to be set out clearly and prominently at the beginning of the contract

6(1) A supplier shall ensure that the following information is set out prominently and in a clear and understandable manner, satisfactory to the Minister, on the beginning page or pages of a contract:

(a) the supplier’s business name, business and mailing addresses, telephone number, fax number, e-mail address and, if the supplier has a website, its website address;

(b) the customer’s name and address;

(d) the term of the contract expressed in days, weeks, months or years, and its expiry date;

(e) the minimum monthly cost of the contract;

(f) an itemized list of all costs included in the minimum monthly cost;

(g) a description of the cell phone services provided for in the minimum monthly cost (“the base services”) including, where applicable,

(i) a statement of the maximum usage of any of the base services before the customer will become liable for costs not included in the minimum monthly cost (“additional use charges”),

(ii) a description of any restrictions on the base services - including, without limitation, restrictions relating to time of day, day of week or geography - that will result in the customer becoming liable for costs not included in the minimum monthly cost, and

(iii) the manner in which the customer can obtain further details on the base services and their costs and restrictions;

(h) rates for any additional use charges referred to in subparagraph (g)(i) - which may include, without limitation, rates for additional minutes or additional data usage - and information on how the customer can obtain further details on these rates;

(i) a description of any cell phone services available under the contract that the customer may opt to use, but that are not included in the calculation of the minimum monthly cost (“optional services”), including, without limitation,

(i) an explanation as to how the cost of each optional service will be calculated,

(ii) a description of any restrictions on the optional services that will result in an increase in cost to the customer for the use of these services, and

(iii) the manner in which the customer can obtain further details on the optional services and their costs and restrictions;

(j) a description - including, without limitation, the amount or how the amount is calculated - of any one-time or irregularly occurring fees, charges, penalties, interest or other amounts or consideration payable by the customer under the contract, including, without limitation, system activation fees;

(k) a description of any temporarily reduced or waived charges for cell phone services, including, without limitation, a reduced rate or waiver of all charges for one or more cell phone services for an initial period;

(l) a description of any cell phone provided by the supplier to the customer for free or by sale to the customer - whether or not at a reduced cost - along with a statement as to

(i) whether the cell phone is new or reconditioned, and

(ii) whether the cell phone is locked;

(m) a description, consistent with sections 17 to 20 and the regulations, of

(i) how the customer may cancel the contract, and

(ii) how any cancellation fee will be calculated;

(n) if a cell phone was provided by the supplier to the customer for free or by sale at a reduced cost, a statement of the amount that will be used in calculating the cancellation fee, which must not exceed

(i) in the case of a free phone, the value of the phone, and

(ii) in the case of a phone sold at a reduced cost, the value of the phone less the amount that the customer paid for it;

(o) a description of any manufacturer’s warranty or other warranty that automatically applies, at no additional cost, to a cell phone provided for free or by sale - whether or not at a reduced cost - to the customer, including

(i) what is covered under the manufacturer’s warranty or other warranty or, if applicable, under each warranty,

(ii) the duration of the manufacturer’s warranty or other warranty or, if applicable, the duration of each warranty, and

(iii) how the customer can make a claim under the manufacturer’s warranty or other warranty or, if applicable, under each warranty;

(p) the manner in which the customer can contact the supplier for customer service;

(q) any other information as may be required by the regulations.

Minimum monthly cost must not reflect temporarily reduced amounts

6(2) The minimum monthly cost, and any rates or costs stated in the contract under paragraphs (1)(h) and (i), shall not reflect any temporarily reduced or waived rates or costs, including, without limitation, a reduced rate or a waiver of all costs for one or more cell phone services for an initial period.

ADVERTISING IN RELATION TO CONTRACTS

Advertised price must include the minimum monthly cost

7(1) The price advertised by a supplier for cell phone services under a contract shall include the minimum monthly cost under the contract.

Advertisement must emphasize the minimum monthly cost

7(2) An advertisement by a supplier shall

(a) prominently disclose the minimum monthly cost; and

(b) place more emphasis on the minimum monthly cost than on the amounts that make up the minimum monthly cost.

ADDITIONAL OR EXTENDED WARRANTIES - INFORMATION TO BE PROVIDED IN ADVANCE

Information supplier must provide before offering additional or extended warranty

8 Before offering to sell a customer an additional warranty or an extended warranty on a cell phone, the supplier shall

(a) inform the customer orally of the existence of any manufacturer’s warranty or other warranty that automatically applies, at no additional cost, to the cell phone, and explain

(i) what is covered under the manufacturer’s warranty or other warranty or, if applicable, under each warranty,

(ii) the duration of the manufacturer’s warranty or other warranty or, if applicable, the duration of each warranty, and

(iii) how the customer can make a claim under the manufacturer’s warranty or other warranty or, if applicable, under each warranty; and

(b) at the customer’s request, explain to the customer how to obtain details of the manufacturer’s warranty or other warranty or, if applicable, details of each warranty.

UNILATERAL AMENDMENT OF A CONTRACT

Definitions

9 The following definitions apply in this section and in sections 10 to 15.

“material term or provision”, in relation to a contract, means, subject to the regulations, a term or provision that is required to be set out in the contract under paragraphs 6(1)(d) to (k). (clause importante)

“non-material term or provision”, in relation to a contract, means a term or provision that is not a material term or provision. (clause non importante)

“negative option marketing” means a practice in which a supplier

(a) provides goods or services to a consumer - including an enhancement to a service that the consumer is already receiving - that the consumer did not request; and

(b) requires the consumer to pay for the goods or services unless the consumer informs the supplier that the consumer does not want them. (commercialisation par abonnement par défaut)

Supplier cannot unilaterally amend a material term or provision of a contract

10 A term or provision of a contract that authorizes or purports to authorize a supplier to unilaterally amend a material term or provision of the contract

(a) is prohibited; and

(b) is void and of no effect.

Limits on unilateral amendment of a non-material term or provision

11(1) Unless it complies with the requirements of subsection (2), a term or provision of a contract that authorizes or purports to authorize a supplier to unilaterally amend a non-material term or provision of the contract

(a) is prohibited; and

(b) is void and of no effect.

Requirements - unilateral amendment of a non-material term or provision

11(2) A term or provision of a contract that authorizes a supplier to unilaterally amend a non-material term or provision of the contract shall provide that the supplier send to the customer, at least 30 days before the amendment comes into force, a written notice in a form satisfactory to the inspector, setting out

(a) the new term or provision, or the amended term or provision as it reads at present and how it will read as amended;

(b) the date the amendment will come into force; and

Amendment is not negative option marketing

11(3) The unilateral amendment of a contract under this section does not constitute negative option marketing.

Customer may cancel contract without penalty if material term or provision unilaterally amended

12(1) If a supplier unilaterally amends a material term or provision of a contract, or purports to do so,

(a) the amendment, or purported amendment, is void and of no effect;

(b) the customer may cancel the contract; and

(c) the supplier shall not charge the customer a cancellation fee or any other charge, fee, penalty, interest or other amount or consideration - other than the cost of any unpaid cell phone services that have been provided to the customer calculated at the rate provided in the contract - as a result of the customer cancelling the contract.

Customer may cancel contract without penalty - unilateral amendment of a non-material term or provision

12(2) If a supplier unilaterally amends a non-material term or provision of a contract, or purports to do so, and

(a) the contract does not contain a term or provision that meets the requirements of subsection 11(2); or

(b) the notice requirements set out in paragraphs 11(2)(a) to (c) have not been met in respect of the amendment or purported amendment;

paragraphs (1)(a) to (c) apply.

Exception - amendments required by law

13 Sections 10 to 12 do not apply to amendments that are required by any federal, provincial or municipal law or by an order of a court, board or tribunal.

Exception - indeterminate contracts

14(1) Sections 10 to 12 do not apply to amendments made to an indeterminate contract.

Requirements for indeterminate contracts

14(2) Despite subsection (1),

(a) the requirements of subsection 11(2) apply, with the necessary modifications, to the unilateral amendment of an indeterminate contract; and

(b) paragraphs 12(1)(a) to (c) apply to the unilateral amendment, or purported unilateral amendment, of an indeterminate contract that does not meet the notice requirements set out in paragraphs 11(2)(a) to (c).

Subsection applies to both material and non-material amendments of an indeterminate contract

14(3) For greater certainty, subsection (2) applies to any unilateral amendment of an indeterminate contract, without regard to whether the amendment is of a material term or provision or of a non-material term or provision.

Exception - contract authorizes unilateral amendment that benefits customer

15(1) Sections 10 and 11 do not apply to a term or provision of a contract that authorizes a supplier to unilaterally amend

(a) a material term or provision of the contract where the amendment will benefit the customer and will not increase the customer’s obligations under the contract; or

(b) a non-material term or provision of the contract where the amendment will not increase the customer’s obligations or decrease the supplier’s obligations under the contract.

Exception - unilateral amendment that benefits customer

15(2) Section 12 and subsections 14(2) and (3) do not apply to

(a) a unilateral amendment of a material term or provision of a contract where the amendment benefits the customer and does not increase the customer’s obligations under the contract; or

(b) a unilateral amendment of a non-material term or provision of a contract where the amendment does not increase the customer’s obligations or decrease the supplier’s obligations under the contract.

Notice to customer of amendment

15(3) Within 30 days after making a unilateral amendment described in subsection (2), the supplier shall give notice of the amendment to the customer.

Acceptance of amendment is not consent to other changes

16 For greater certainty, if a customer accepts an amendment under paragraph 11(2)(c), that acceptance does not constitute consent by the customer

(a) to any other amendment of the contract;

(b) to renew or extend the contract; or

CANCELLATION OF CONTRACT BY CUSTOMER

Customer may cancel contract at any time

17(1) A customer may, at any time, cancel a contract by giving notice to that effect to the supplier, and the cancellation takes effect on the day that the notice is given, or on a later date that may be specified in the notice.

Cancellation rights in addition to other rights

17(2) The cancellation rights under this section are in addition to, and do not affect, any other right or remedy that the customer has under the contract or at law.

Limits on charges when customer cancels contract

18 Upon the cancellation of a contract under subsection 17(1), the supplier shall not charge the customer any fee, charge, penalty, interest or other amount or consideration, other than

(a) the cost of any unpaid cell phone services that have been provided to the customer calculated at the rate provided in the contract; and

(b) any cancellation fee that may be authorized under section 19 or 20 or by a regulation made under paragraph 32(1)(i).

Cancellation fees for contracts with a fixed term

19(1) Subject to the regulations, this section applies to the cancellation of a contract with a fixed term.

Fixed term contract - cell phone provided

19(2) If

(a) a cell phone was provided by the supplier to the customer for free or by sale at a reduced cost; and

(b) an amount was stated in the contract under paragraph 6(1)(n) for the purpose of calculating the cancellation fee;

the supplier may charge a cancellation fee of not greater than the amount stated in the contract under paragraph 6(1)(n), prorated by the length of time remaining in the contract’s term.

Fixed term contract - no cell phone provided

19(3) If a cell phone was not provided by the supplier to the customer for free or by sale at a reduced cost, or if subsection (2) does not apply for any other reason, the supplier may charge a cancellation fee not to exceed the lesser of

(a) $50; and

(b) the amount determined by the following formula:

Amount = 10% × M × N

In this formula,

M is the minimum monthly cost, as defined in subsection 5(1);

N is the length of the remaining term of the contract, expressed in months.

Cancellation fees for indeterminate contracts

20(1) Subject to the regulations, this section applies to the cancellation of an indeterminate contract.

Indeterminate contract - cell phone provided

20(2) If

(a) a cell phone was provided by the supplier to the customer for free or by sale at a reduced cost; and

(b) an amount was stated in the contract under paragraph 6(1)(n) for the purpose of calculating the cancellation fee;

the supplier may charge a cancellation fee of not greater than the amount stated in the contract under paragraph 6(1)(n), less the amount calculated in accordance with the regulations.

Indeterminate contract - no cell phone provided

20(3) For greater certainty, if a cell phone was not provided by the supplier to the customer for free or by sale at a reduced cost, or if subsection (2) does not apply for any other reason, the supplier shall not charge a cancellation fee.

CONTRACT EXPIRY AND EXTENSION

Customer to be notified contract expiry date is near

21(1) The supplier shall, between 60 and 90 days before the expiry date of a contract, give a written notice to the customer, in a form satisfactory to the Minister, setting out

(a) the date that the contract is set to expire, and that the notice is written notice that the contract will terminate on that date; or

(b) the date that the contract is set to expire, but that it will be automatically extended, on a monthly basis - on the same terms as at present - until either the customer or the supplier gives notice to the other that the contract is not to be further extended.

Exceptions

21(2) Subsection (1) does not apply to

(a) a contract with a term of less than 60 days; or

(b) an indeterminate contract.

Automatic monthly extensions

22(1) On the expiry date of a contract,

(a) if a notice has been given to the customer under paragraph 21(1)(b), and

(b) if neither the supplier nor the customer has given notice to the other that the contract is not to be extended,

the contract is automatically extended - on the same terms - for an additional one-month term, and in such a case, the supplier must continue to automatically extend the contract, for additional one-month terms, until either the supplier or the customer gives notice to the other that the contract is not to be further extended.

All fees, charges prohibited

22(2) No supplier shall charge a customer a contract extension fee or any other fee, charge, penalty, interest or other amount or consideration for a contract extension under this section.

Contract extension is not negative option marketing

22(3) The extension of a contract under this section does not constitute negative option marketing as that term is defined in section 9.

SECURITY DEPOSITS

Contract not to be cancelled if security deposit exceeds amount of debt

23(1) If a customer has paid a security deposit, the supplier shall not cancel the contract for failure to pay outstanding amounts under the contract when they become due for as long as the amounts due do not exceed the amount of the deposit.

Supplier to notify customer on using security deposit

23(2) A supplier shall notify the customer in writing when it uses all or part of the security deposit to satisfy amounts not paid when they became due.

Return of security deposit

24 A supplier shall return to the customer any security deposit paid by the customer - minus any amounts used to pay outstanding amounts due under the contract - with interest at the prescribed rate, within 30 days after the day on which the contract expires if it is not renewed or extended or the day on which the contract is cancelled.

EQUIPMENT REPAIRS

No payment for services not received due to equipment repair

25(1) No supplier shall demand, request or accept payment for cell phone services of which the customer was deprived during the repair of equipment or other goods supplied free of charge, sold, or rented to the customer on the making of the contract or during the term of the contract, if

(a) the goods were given to the supplier for repair while still under warranty and the supplier did not provide a replacement free of charge; and

(b) the goods are necessary for the use of cell phone services provided for under the contract.

Exception if damage caused by customer

25(2) Subsection (1) does not apply if the damage to the equipment or other goods under repair was caused by the customer.

PAPER BILLS

Paper bills at customer’s request

26 A supplier shall, at the customer’s request and subject to the regulations, provide bills in paper form to the customer.

RECORDS

Records to be kept

27 A supplier shall, in accordance with the regulations, make and maintain records of all contracts into which it enters.

Officials may require information

28(1) An inspector may require a supplier to provide records or copies of records it is required to make and maintain under section 27, for the purpose of

(a) determining compliance with this Act or the regulations;

(b) verifying the accuracy or completeness of a record or of other information provided to the inspector; or

(c) performing any other duty or function that the inspector considers necessary or advisable in the administration or enforcement of this Act or the regulations.

Duty to provide information

28(2) A supplier required to provide records or copies of records under subsection (1) shall do so.

OTHER MATTERS

Information must be clear, understandable and prominently displayed

29(1) Information that a supplier is required to include in a notice or other document under this Act or the regulations shall be clear and understandable, and the required information shall be prominently displayed.

Interpretation of ambiguous statement

29(2) If a term, provision or statement in a notice or other document provided to a customer under this Act or the regulations is ambiguous, it shall be construed in favour of the customer.

Attempt to affect jurisdiction void and of no effect

30 Any term or provision of a contract purporting to restrict the application of the law of New Brunswick or to restrict jurisdiction or venue to a forum outside New Brunswick is void and of no effect.

GUIDELINES, REGULATIONS AND REVIEW

Guidelines for contracts and other documents

31 To assist in the preparation of contracts, notices and other documents that are clear and understandable, the Minister may issue guidelines about the form or content of such documents.

Regulations

32(1) The Lieutenant-Governor in Council may make regulations

(a) exempting any contract or class of contracts or any person or class of persons from the application of this Act or any provision of this Act;

(b) extending, modifying or limiting the meaning of “cell phone services” for the purposes of this Act or any provision of this Act;

(c) extending, modifying or limiting the application of any provision of this Act in relation to indeterminate contracts;

(d) respecting the manner of giving, sending or serving any notice or other document that is required to be given, sent or served;

(e) respecting requirements for contracts not made in person, including, without limitation,

(i) whether the contract must be in writing,

(ii) documents or information that must be given or made available to the prospective customer before the contract is made, and

(iii) documents or information that must be given or made available to the customer after the contract is made;

(f) respecting methods for determining the maximum amount that may be stated in a contract under paragraph 6(1)(n), and setting the maximum amount;

(g) for the purpose of paragraph 6(1)(q), specifying other information required to be set out prominently and in a clear and understandable manner, satisfactory to the Minister, on the beginning page or pages of a contract;

(h) for the purpose of the definition “material term or provision” in section 9,

(i) extending, modifying or limiting the meaning of that term for the purposes of this Act or any provision of this Act, or

(ii) specifying other classes of terms or provisions that are material terms or provisions;

(i) for the purpose of section 18, authorizing other cancellation fees, and respecting circumstances in which such fees apply and methods of calculating them;

(j) for the purpose of subsection 19(2), respecting the determination of the maximum amount of the cancellation fee, including, without limitation, the method of determining the prorated value of a cell phone;

(k) for the purpose of subsection 20(2), specifying how to calculate the amount that is to be subtracted from the amount stated in the contract under paragraph 6(1)(n);

(l) for the purpose of subsection 22(1), respecting the manner of giving notice that the contract is not to be extended or further extended, which may include oral notice and, when notice is provided by the customer, how it must be acknowledged by the supplier;

(m) for the purpose of section 24, prescribing the rate of interest, or the method of determining the rate of interest, payable on the return of a security deposit;

(n) respecting the providing of bills in paper form to a customer, including prescribing the maximum amount that a supplier can charge a customer for a paper bill;

(o) for the purpose of section 27, respecting records of contracts to be made and maintained by a supplier, including the length of time for which and the location at which records must be retained;

(p) respecting Internet cell phone contracts;

(q) respecting cell phone contracts made, in whole or in part, by telephone, including, without limitation, contracts made by a combination of telephone and Internet communications;

(r) respecting the form of a contract or of any document or information required or provided for under this Act, which may include, without limitation, requiring specified fonts or font sizes;

(s) defining any word or phrase used but not defined in this Act, including “cell phone” and “prepaid cell phone services”;

(t) respecting any other matter the Lieutenant--Governor in Council considers necessary or advisable for the administration of this Act.

Regulations about Internet cell phone contracts

32(2) Without limiting paragraph (1)(p), a regulation made under that paragraph may do one or more of the following:

(a) define the term “Internet cell phone contract”;

(b) designate another jurisdiction as a reciprocating jurisdiction if, in the opinion of the Lieutenant--Governor in Council, it has similar law for the regulation of Internet cell phone contracts;

(c) authorize the Minister, on behalf of the government, to enter into an agreement with the government of a reciprocating jurisdiction designated under paragraph (b) respecting the application, administration or enforcement of this Act or the law of that jurisdiction in respect of Internet cell phone contracts;

(d) in accordance with any agreement made under paragraph (c), specify which law applies or does not apply when both this Act and the law of the reciprocating jurisdiction purport to apply to an Internet cell phone contract;

(e) extend, modify or limit the application of any provision of this Act in relation to Internet cell phone contracts.

Scope and application of regulation

32(3) A regulation under subsection (1) or (2)

(a) may be general or particular in its application; and

(b) may establish one or more classes of contracts, suppliers or customers and may apply differently to different classes.

Commencement

33 This Act or any provision of it comes into force on a day or days to be fixed by proclamation.