Competition Bureau sues Canada’s 3 wireless giants over texting advertising

The Competition Bureau is suing Canada’s three biggest wireless carriers and an industry association for allegedly misleading consumers about the cost of premium texting services. The watchdog accuses Bell, Rogers and Telus, along with the industry group that represents them, of enabling third parties to sell trivia questions, ringtones and other services without adequately disclosing […]

The Competition Bureau is suing Canada’s three biggest wireless carriers and an industry association for allegedly misleading consumers about the cost of premium texting services.

The watchdog accuses Bell, Rogers and Telus, 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 don’t 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 investigation, is before the Ontario Superior Court of Justice. The allegations have yet to be tested by a court or tribunal.

The wireless carriers don’t 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.

Brands Articles

CMOs want the “brand” back in branded content

At IAB Engage, marketers for Molson, Kraft, Cara Foods talk branded content strategy

Airbnb signs deal to sponsor 2016 Rio Olympic Games

Online community is the Games' first alternative accommodations sponsor

Grey Canada gets a shot at Tequila Herradura

Brown-Forman brand awards digital CRM and below-the-line duties to WPP shop

Metro pairs fashion with food

Grocer partners with fashion magazine Flare on food-focused marketing campaign

Activia kicks off campaign with world record attempt

Yogurt brand positions itself as a "lifestyle partner" through Rogers Media partnership

HBO Canada gives fans a chance to sit on the Iron Throne

Selection of Game of Thrones products available at Toronto pop-up shop

Frank & Oak push pop-up competition in the U.S.

Montreal-based retailer is giving consumers the power to pick temporary locations

How to create an engaging flyer

Expert Patrick Rodmell shares five best practices that apply to all retail sectors

What the Heinz-Kraft merger could mean for Canada

Experts say deal will likely lead to layoffs as the two companies find ways to share costs