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Investigation finds Fido agents knowingly signed underage students to cellphone contracts

By in Features

The Ubyssey (University of British Columbia)

VANCOUVER (CUP) — An investigation by the Ubyssey, the University of British Columbia student newspaper, has discovered evidence of salespeople from Fido Mobile compelling underage students to sign cellphone contracts using false ages.

Asking 18-year-old students to fudge an extra year onto their ages may be a common practice for dealers at the cellphone service provider.

“We’re just going to make [you] one year older,” a Fido saleswoman in the Student Union Building at UBC told a Ubyssey reporter inquiring as a potential underage customer.

B.C. law prevents minors under the age of 19 from being legally bound by contracts.

Additionally, law professors interviewed about Fido’s practices argue that this practice could possibly constitute fraud. Presently, no governmental agency has taken responsiblity for enforcing the behaviour of cellphone providers.

Fido paid $5,000 for the exclusive sponsorship of two events during Jump Start, a two-week orientation event for first-year international students at UBC in August.

At a parents’ reception and a student dinner in mid-August, Fido signed students up for their first Canadian cellphone plans. Fido also had a table in the SUB during the first week of classes and Skynet Wireless, a Fido-authorized dealer, had booths in the first-year residences during the first week of school.

At all of these locations, salespeople reportedly offered to let 18-year-olds enter into multi-year contracts.

T, an 18-year-old arts student from Wisconsin who the Ubyssey will identify only by the first letter of her name to avoid putting her contract in jeopardy or exposing her to legal liability, said she visited the Fido store located in Vancouver’s Broadway area with her mother. T assumed her mother would need to sign the contract for her.

T described standing at the counter while a Fido salesperson read off her passport, activating her account over the phone.

“They were reading it off and they said April 22… 1993,” said T, whose passport attests that she was actually born in 1994.

“My mom and I both jumped up and we were like, ‘What? That’s not my birthday.’ And the person behind the counter told us, ‘Stop, let it go.’ ”

T said the salesperson later offered to correct her birthday but discouraged it — saying that doing so would make things more difficult.

A legal grey area

According to UBC law professor Bruce MacDougall, B.C.’s Infants Act declares that any contract signed by a minor is unenforceable on the minor, at least until he or she reaches the age of majority. In some cases, this can mean the contract remains unenforceable even after that minor’s 19th birthday.

MacDougall said that even though an 18-year-old signing a cellphone contract isn’t actually bound by its terms, many such minors feel compelled to follow them anyway.

“A lot of people actually abide by contracts that aren’t actually binding,” MacDougall said. “There are all sorts of contracts that you don’t have to abide by, but people do because they’re led to believe that somehow they’re binding.”

As well as believing they are locked into a cellphone plan’s monthly fees, underage students who have signed up with Fido run the risk of having their credit damaged, MacDougall explained.

Many questions about the legality of Fido’s practices, and who is in charge of enforcing those laws, remain fuzzy. There is little regulation in the Canadian cellphone market, and it’s unlikely that the company would face any consequences for signing up underage customers unless the customers themselves complain.

In 1996, the federal telecommunications regulator, the Canadian Radio-television Telecommunications Commission, decided that there was enough competition in the cellphone market that federal oversight was no longer needed.

“From that point onwards, wireless providers did not have to get the CRTC to approve their rates, terms and conditions of service,” said Kirsten Embree, a part-time professor at the University of Ottawa and former legal counsel at AT&T Canada. AT&T Canada previously held an ownership stake in Rogers Wireless, which has been Fido’s parent company since 2004.

“The CRTC has never really focused specifically on the age at which contracts are entered into,” Embree continued. “I think there’s an implicit assumption that contracts will be with individuals who are over the age of majority.”

First-time buyers

When the Ubyssey went undercover to the Fido authorized dealer and began the process of signing up for a new cellphone plan, they discovered that the rules were easy to flout.

“Legally, it’s 19,” said a salesperson at the Broadway store when asked if someone who is 18 years old can still hold a regular cellphone plan. “But I can make it work.”

She indicated that she would be using a false age when entering the account information into a Fido database. When asked why it was necessary to put down a false age, she explained, “It’s just with Canada…. Once you sign up, they want you to take responsibility of the account. So they want you to be older.”

Recording a customer’s age incorrectly as 19 doesn’t make the contract enforceable, but it does make it look like salespeople are complying with Fido’s corporate policy when they aren’t.

Sara Holland, a spokesperson from Fido’s parent company, Rogers, said that the company’s policy was to only allow people who are 19 years and older to hold contract-based cellphone plans.

“Students may have different experiences going through [authorized dealers] when it comes to price,” Holland wrote in an email. “What should be consistent across the board, however, is our policy on age and account activation.”

Rogers’ policy states that proof of age must be provided when a customer opens an account.

“Customers under age of majority are not eligible to act as a financially responsible party [i.e. account holder],” Holland wrote.

While Holland said Rogers does not disclose employee compensation, several online sources, including a job description on the Rogers website, indicate Fido salespeople are expected to meet sales goals.

On Glassdoor, a website where employees post reviews of the companies they work for, a Rogers employee in Ottawa said commissions were tied to “impossible targets.”

The pressure of sales goals would provide an incentive to violate corporate policy and sign up underage customers.

In 2008, the Toronto Star reported that Fido was shifting its business model from “one focused on attracting young urban professionals to one targeting price-conscious first-time buyers.”

“Price-conscious first-time buyers” might describe the 700 or so international students at Jump Start, most of whom were under 19, as well as many of the UBC students encountering Fido’s tables in the SUB and at campus residences during the first week of school.

Holland said Fido’s strategy during Jump Start was to sign up 18-year-olds for contract-free prepaid plans, and to restrict contract-based plans, which usually cost less on a per-minute or per-megabyte basis, to those 19 years and older.

She added that the goal of the Jump Start sponsorship was to attract international students in general, not specifically first-year students, though the Jump Start program is exclusively for first-year students.

Tightening the leash

Rogers spokeswoman Holland said Rogers would be investigating these incidents, and that they would take steps to ensure this doesn’t keep happening. “It is hugely concerning to us if students are being signed up in violation of our policy or being encouraged to be dishonest about their ages,” she wrote in an email.

With an eye toward providing more oversight of cellphone companies, Ontario, Manitoba and Nova Scotia have all passed legislation regulating cellphone contracts’ terms and conditions over the past year. Frustrated by the piecemeal nature of these new provincial regulations, Rogers and Telus have petitioned the CRTC to create a national consumer code regulating cellphone contracts, with Rogers going as far as to submit an actual code to the CRTC for consideration.

“Everybody seems to play a little bit of a different role,” said Manjit Bains, the Consumer Protection B.C. spokeswoman. “There’s definitely room for strengthening the oversight of cellphone contracts.”

Illustration: Indiana Joel/The Ubyssey

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