Law Times

Page 8 June 6, 2016 • Law Times www.lawtimesnews.com Phone card credit battle headed to top court? BY MICHAEL MCKIERNAN For Law Times C onsumers who lost mil- lions in unused prepaid phone card credits are considering a trip to the nation's top court in their class action fight over funds seized by Bell Mobility Inc. The $200-million class ac- tion, certified back in 2013, cen- tres on when Bell was entitled to claim the unused balance of users who failed to top up their account during the active period of their prepaid accounts. In April, the Court of Appeal for Ontario upheld a superior court judge's decision to dismiss the action after granting Bell's motion for summary judgment. Louis Sokolov, a partner in the litigation department at Sotos LLP in Toronto, acted for the class, and tells Law Times the group has yet to decide whether to seek leave to appeal the appeal court decision to the Supreme Court of Canada. "It was obviously very dis- appointing for our client and for us. There were more than a million class members affected, many of whom lost money as a result of Bell's forfeiture practic- es, which we believe were unfair and contrary to the contract," Sokolov says. "We were hoping for a better result for them, but unfortunate- ly the court of appeal disagreed with our submissions." Lead plaintiff Celia Sankar, an author and speaker from El- liot Lake, Ont., lost around $58 when Bell seized her credits the day after the end of her card's ac- tive period. "I must say this is a huge dis- appointment," Sankar said in a statement following the dismiss- al of the appeal. Bell's prepaid top-ups were offered to customers under their Virgin Mobile, Solo Mobile, and Bell Mobility brand names, with active periods lasting for be- tween 30 and 365 days and cost- ing between $15 and $200. When customers failed to top up again before the end of the active period, the telecommu- nications giant would claim any unused funds still in the account the day after it ended. For example, if the final day of a particular top-up period fell on Sept. 30, Bell would claim the funds on Oct. 1. However, Sankar and others claimed they should have waited an extra day before absorbing the unused money, since in this example, reminder texts to cus- tomers and subscriber account information would list Oct. 1 as the "expiry date." However, the appeal court sided with Bell, ruling that the lower court judge got it right when he found that there was no breach of the contract between Bell and its customers, because it provided for the prepaid card to expire at the end of the last day of the active period, not the day after. "Bell was therefore entitled to collect the unused balance after the last day of the active period," wrote Ontario's Chief Justice George Strathy on behalf of a unanimous three-judge panel of the province's appeal court. The reminder text messages did not have to be taken into consideration as part of the anal- ysis because they had nothing to do with the formation of the contract, the appeal court ruled. "As the motion judge noted, the appellant's real complaint, and the real complaint in this class action, is that Bell's sub- sequent communications to its customers — made after they had purchased their top-ups and as the top-up was about to expire — were misleading. That is because they may have created the impression that subscribers had an additional day after the end of the active period to 'top up' before their funds expired," Strathy wrote. "I agree with the motion judge that this was essentially a claim for misrepresentation or promissory estoppel, neither of which was before him, because neither was held to be amenable to resolution as a common issue in the class proceeding." Wendy Sun, a lawyer with Af- f leck Greene McMurtry LLP in Toronto, says the decision leaves individual members of the class with legal options, even with the class action's dismissal. "There may be some indi- vidual customers who can prove negligent misrepresentation; that door is still left open," she says. Despite Bell's victory, Sun says the decision serves as a warning to phone companies to tighten up their post-contrac- tual communications with cus- tomers. "They will want to make sure that communications from the company and its employees are correct and consistent with writ- ten agreements," she says. "It can be frustrating when you call in to representatives and are told different information." The appeal court panel also rejected Sankar's argument that the phone cards should be sub- ject to provincial regulations that ban the expiry of gift cards, since there were no time limits on when the prepaid card could be activated. The prohibition only applies to the gift card itself, "and not on the goods or services purchased with that gift card," Strathy not- ed. "To hold otherwise would mean that Bell was required to keep the wireless service and number available to the custom- er indefinitely, a patently un- reasonable outcome," the judge wrote. The appeal court decision empathized with the situation the ruling could put consum- ers in, acknowledging they may end up "on a merry-go-round they cannot get off, because they must constantly top up an ac- count with a credit balance," to avoid losing unused credits. "Depending on one's per- spective, that may be unfair or it may be part of the price paid for the f lexibility of a prepaid phone card," Strathy added. Since November 2013, Bell has updated its agreement to in- clude a seven-day grace period following the end of an active period, giving customers extra time to refill their prepaid ac- counts before losing their bal- ance. The change was mandated industry-wide by the Canadian Radio-television and Telecom- munications Commission's Wireless Code following a raft of complaints to the regulator over the issue. LT FOCUS ON MOBILE TECHNOLOGY Focus Wendy Sun says a recent decision serves as a warning to phone companies to tighten up their post-contractual communications with customers. REACH ONE OF THE LARGEST LEGAL AND BUSINESS MARKETS IN CANADA! AVAILABLE ONLINE AND IN PRINT With more than 300,500 page views and 100,000 unique visitors monthly canadianlawlist.com captures your market. FOR MORE INFORMATION CONTACT Colleen Austin T: 416.649.9327 | E: colleen.austin@thomsonreuters.com www.canadianlawlist.com Get noticed by the lawyers, judges, corporate counsel, fi nance professionals and other blue chip cilents and prospects who fi nd the contacts they need for Canadian legal expertise at canadianlawlist.com with an annual Gold or Silver Enhanced listing package. ENCHANCE YOUR LISTING TODAY! Untitled-5 1 2016-05-25 4:09 PM

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