The Ontario Minister of Consumer Services introduced the Wireless Services Agreements Act, 2012 on May 3, 2012.

The Bill only applies to agreements with consumers.  Consumers are those acting for personal, family or household purposes. Accordingly, the Act will not apply to those who are self-employed and purchase smart phones for business use. The proposed legislation will only apply prospectively to agreements entered into after the date the legislation comes into force where either the consumer or the person entering into the agreement with the consumer is located in Ontario.

Here are some of the highlights:

- The legislation will apply to wireless agreements, which are agreements with a consumer in which the supplier agrees to provide wireless services that the consumer is able to access from a mobile device such as a smart phone or cell phone.

- The legislation will apply even if the supplier does not sell the consumer the mobile device.

- Advertising must show all-inclusive costs, which must be the most prominent cost information in the advertising.

- Wireless services agreement must meet the prescribed disclosure obligations or they will not be enforceable. Among the disclosure obligations are: 

- Minimum cost obligations described on a periodic basis (e.g. monthly); 

- Maximum usage of each service before the consumer will trigger additional costs not  included in the minimum cost obligations; and 

- Cost of optional services and any restrictions that will cause those costs to increase.

- Suppliers of wireless services must provide advance notice to the consumer if the consumer accesses a service that will result in additional costs.

- Consumers may cancel an agreement at any time for any reason.

- There are limits on cancellation fees based on prorating the economic inducements (such as discounted handsets) over the term of the contract or, for agreements of no fixed term, 48 months. 

Tim Banks is a partner in FMC's Toronto office. He assists in developing strategies to fix or to manage the risk of litigious or potentially litigious matters involving complex or novel issues.