Companies would ‘do well’ to read warning regarding unregulated services in Telus credit card decision: CRTC chair

CRTC chair Ian Scott is firing a warning at Canada’s telecommunications company, after Telus Corp. unsuccessfully tried to hand off credit card payment fees to its consumers for its regulated services in Alberta and British Columbia through a tariff application. “Should the practice of charging additional fees for the processing of credit card payments continue or be extended to unregulated services, by either TCI or other TSPs , the commission is prepared to explore all available regulatory options in the near future,” the Thursday decision states. Scott told the Wire Report in an interview that it would be inappropriate to discuss what specific measures the CRTC would be prepared to undertake if the practice continues. “I'm not going to outline the sections of the act that could be used, or the approaches. That would be inappropriate – that's not what was in front of us,” he said. “What are we going to do about it? … We can't say now, but we're making it very clear that we don't believe that kind of surcharge is in the public interest. So companies would do well to read that short, but very clear, decision carefully.” In August, Telus filed an application proposing changes to its general tariff for its regulated service. The incumbent proposed the introduction of a credit card processing fee of 1.5 per cent plus applicable taxes for its regulated services in Alberta and British Columbia. In October Telus began to add the charge to clients paying by credit card in areas where services are not regulated by the CRTC, which includes its wireless and internet customers outside of Quebec. (Quebec’s Consumer Protection Act prevents credit card processing surcharges). The additional fees received a lot of national attention from consumers and the CRTC subsequently received 3,918 interventions regarding Telus’ application, the majority of which were submitted by individuals who opposed the application. “Many interveners raised concerns with the potential anti-consumer implications of TCI’s application, the affordability of telecommunications services in Canada, the already high profits of TCI and other TSPs in general, and the broader economic context (inflation, pandemic recovery, etc.),” the decision states. “Interveners also commented on the potential for TCI’s proposed fee to disproportionately affect certain groups of customers, as well as the potential for double billing, and the argument that credit card costs are an established cost of doing business was raised in many interventions.” Interveners also raised concern that if the commission approved the changes it would set a bad precedent with respect to unregulated and forborne services, such as wireless and internet services. Telus argued that customers can avoid paying by credit card if they wish to avoid the fee. Telus further stated that the percentage-based charges it incurs everytime it accepts a credit card payment is unavoidable.The company cited the Supreme Court of Canada, which stated that the ability of a regulated utility to recover its operating and capital costs through rates is a key principle in Canadian regulatory law. The commission, in its analysis, noted that “some” customers could avoid the fee through alternate payment methods, however, “there are valid reasons” for other customers to prefer credit card payments such as increased fraud protection or financial flexibility. “The proposed fee could have a disproportionate impact on some lower-income Canadians who cannot practically avoid such a fee,” the CRTC noted. The commission also found that the rates were not just or reasonable because it would impact “the most vulnerable consumers, especially as Canadians are currently contending with price increases for many essential goods and services due to high inflation.” The Public Interest Advocacy Centre (PIAC) and the National Pensioners Federation (NPF), which opposed Telus' application, hailed the decision as a huge win for consumers in a Thursday release. PIAC executive director and general counsel, John Lawford stated that the decision “is a bellwether across consumer markets apart from telecommunications. This decision says to business: ‘just don’t do this.’” – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Companies would ‘do well’ to read warning regarding unregulated services in Telus credit card decision: CRTC chair

News | December 8, 2022

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Companies would ‘do well’ to read warning regarding unregulated services in Telus credit card decision: CRTC chair

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