Bell beats class action over prepaid cards
A certified class action against Bell Mobility for taking money left on inactive prepaid cellphone cards has foundered on the shoals of Ontario’s top court.
The ruling likely puts an end to the $200-million lawsuit involving as many as one million Canadians who saw cash on their expired Bell Mobility, Solo Mobile and Virgin Mobile cards disappear into Bell’s pockets.
Bell was entitled to the money, even though consumers might not like the situation, the Court of Appeal said in its decision.
“(Consumers) may find themselves in a situation where their phone cards expire before they have had a chance to use all their prepaid credits,” the ruling states. “They may also find themselves on a merry-go-round they cannot get off, because they must constantly top up an account with a credit balance, because they have not used up all their credits from the previous active period.”
While this may seem unfair, the court said, it may be “part of the price paid for the flexibility of a prepaid phone card.”
In May 2012, Celia Sankar, of Elliot Lake, Ont., launched a class action on behalf of people who bought phone cards between May 4, 2010, and Dec. 16, 2013. Consumers were required either to use the funds or top up the balance during an activation period ranging from 30 to 365 days.
In Sanka’s case, Bell took the cash — about $58 — a day after her card’s activation ended. The suit alleged the phone giant had grabbed the funds improperly. Sanka argued that Bell had either taken the money too quickly or had run afoul of an Ontario law that bars expiry dates on gift cards.
Sankar’s claim related to breach of contract came down to whether the prepaid card expired at the end of the last day of the active period or the day after.
In February last year, a lower court dismissed the action, saying Bell had not breached its contract and that the Ontario gift card law did not apply. Sankar turned to the Appeal Court, which this week threw out the suit.
For one thing, the Appeal Court said, the “plain meaning” of the language Bell used was that a consumer’s ability to use the money expired at the end of the relevant active period and that any balance after the expiry date was “forfeited and non-refundable.”
The Appeal Court also found that prepaid phone cards could be activated at any time after purchase — and only then did they have to be used within a certain period — and so didn’t run afoul of Ontario’s gift-card laws.
Sankar called the ruling was a “huge disappointment for consumers.”
Responding to complaints on the issue, the Canadian Radio-televi- sion and Telecommunications Commission forced cellphone companies several years ago to keep prepaid card accounts open for seven days after expiry of the activation period to give holders time to top up their accounts. The CRTC also refused to force providers to allow indefinite carry-over of unused money.
Bell changed its terms of service in November 2013 to reflect the CRTC decision.