If you concluded an open-ended home phone service contract on or after June 30, 2010, the service provider is subject to rules that limit the cancellation fees that can be charged. These rules provide that, with certain exceptions, the service provider cannot charge cancellation fees.

Exception: cancellation charges permitted

Providers can charge cancellation fees when they accept that:

• when you sign the contract, you pay less than the total price of a device related to your home phone service subscription (for example, a VoIP modem);
• and that the outstanding amount decreases progressively as each month of the contract elapses.

The later you cancel your contract, the lower the fees will be.

Calculating cancellation fees

Here is the formula to calculate the maximum cancellation fees that you can be charged if the exception applies.

[Amount of the unpaid portion of the sales price of the product when the contract was signed] - [1/48 x Amount of the unpaid portion of the sales price of the product when the contract was signed x Number of months elapsed on the contract] = Maximum cancellation fee

Sample calculation of the maximum cancellation fees

When you concluded your contract, the merchant provided you a phone worth $150. You did not pay this amount. Each month, the service provider reduces the sum of $150 by a certain amount. You decide to cancel your contract in the 22^nd month.

To calculate the maximum fees that you can be charged, the service provider must apply the following formula.

$150 - [1/48 x $150 x 22], simplified as $150 - $68.75 = $81.25

The maximum cancellation fee is $81.25.

Failure to respect the maximum cancellation fees

If your service provider has charged cancellation fees greater than what is permitted, you can dispute the fees charged. You can also file a complaint with the Office de la protection du consommateur. See Contact us to find out how to reach us.