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Consumer Protection –
Consumer Protection Office |
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Under Manitoba’s new consumer protection legislation regarding cell phone contracts, consumers can cancel their contracts at any time. A company can charge a reasonable cancellation fee, as follows:
If you were given a phone for no cost or at a reduced rate when you signed up for a fixed term contract, the cancellation fee will be based on the value of the phone, pro-rated over the remaining term of the contract.
For example:
You receive a $300 phone at no cost when you signed a three-year (36 month) contract. You cancel the contract after one year (12 months). The maximum cancellation fee is $200: $300- ($300x12/36) = $200
If you were given a phone for no cost or at a reduced rate when you signed an indeterminate contract (no fixed term), the maximum cancellation fee is also prorated, based on a 48 month time period.
For example:
You receive a $300 phone at no cost when you sign a no-term contract. You cancel the contract after 12 months. The maximum cancellation fee is $225: $300 – ($300 x 12 / 48) = $225.
If you were not given a phone as an incentive for signing a contract (you may have used a phone you already had or bought a phone to use), the maximum cancellation fee is $50 or 10 per cent of the remaining cost of the contract, whichever is less.
