Myth or fact?
- Myth
- Fact
Moving out of the country? Want to take advantage of another cellphone provider’s offer? Whatever your reason, sometimes you may want to cancel your phone contract before the contract period is up. Learn what your cancellation rights are.
What you should know
The national Wireless Code is a mandatory code of conduct for cellphone service providers. It contains protections for every Canadian with a cellphone plan.
Under the Code, when you sign a cellphone contract you have a 15-day trial period to see whether the service meets your needs. During this period, you can cancel the contract — for any reason — without having to pay any penalty or early cancellation fee.
To cancel the contract during the trial period, you can’t have used more than half of your monthly usage limits. You must return the device in near-new condition, including the original packaging.
For persons with disabilities, the trial period is 30 days, and the usage limits are doubled.
The trial period starts when your service begins
The trial period starts on the date on which your service begins. Contact the provider while you're still in the trial period, and say you want to cancel the contract. It's best to follow-up in writing.
After the trial period, you can cancel your phone contract at any time but you have to pay an early cancellation fee. Your cancellation takes effect on the day that the service provider receives notice of the cancellation.
If you did not receive a discounted or free phone on signing the contract, the early cancellation fee can be no more than $50.
The Wireless Code sets out a formula for calculating the early cancellation fee. The fee is the lesser of:
$50, or
10% of your minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months.
Your service provider cannot charge you any fee or penalty other than the early cancellation fee.
See below under "Work out the problem" for an example of how to calculate the early cancellation fee.
If you got a free or discounted phone as part of signing your cellphone contract, you have to pay for the phone if you cancel early.
In giving you a free or discounted phone, your provider gave you what’s called a device subsidy. They effectively built payments for the phone into the contract. If you cancel early, you’ll have to pay off any remaining device subsidy.
The Wireless Code sets out how the early cancellation fee is calculated when there is a subsidized device. The device subsidy is the retail price of the phone minus the amount you paid for the phone on signing the contract. The early cancellation fee must be reduced by an equal amount each month, such that it is reduced to $0 by the end of the contract.
See below under "Work out the problem" for how to calculate the early cancellation fee when there is a device subsidy still owing.
“My cellphone contract included unlimited data. After the first year, my provider notified me that they were putting me on a 5GB data plan. They told me data was an 'add-on' feature of my contract, which allowed to them to change the data service by giving me 30 days’ notice. I complained. I argued data was a 'key term' of my contract and they had no right to change it without my consent. The wireless complaints agency agreed with me.”
– Carmen, Vancouver, BC
Under the Wireless Code, a service provider can change a key term or condition of your cellphone contract in one of two ways:
If the change clearly benefits you. The benefit can be by reducing your rate for a service or increasing your usage allowance for a service.
If you are informed of the change and agree to it. If you don’t agree to it, you may refuse the change. If the provider insists on making the change, you can cancel the contract without penalty.
Key contract terms and conditions are:
the voice, text and data services included in the contract
any limits on the use of those services that could trigger overage charges or additional fees
the minimum monthly charge for services included in the contract
the commitment period, including the end date of the contract
any early cancellation fees, how much they decrease each month, and when a cancellation fee no longer applies
if you received a free or discounted phone on signing the contract, the retail price of the phone and the amount you paid for the phone
A change to a related document may have the effect of changing the key contract terms and conditions. If it does, the provider needs your informed and express consent to the change. For example, a provider might make changes to its fair use policy that effectively place limits on your services that trigger additional fees. If so, the provider would need your consent to the change in the fair use policy.
If the provider wishes to change other contract terms and conditions or the related documents, it must provide you with at least 30 days’ notice. The notice must explain the change and when it will take effect.
If you choose to upgrade or change your phone, your phone provider must clearly inform you in the written contract if this will extend your contract or change any part of your contract.
If the provider offers you a phone upgrade, they must clearly explain any changes to the existing contract terms. The explanation must include whether accepting the upgrade will extend your commitment period.
Under the Wireless Code, when a fixed-term phone contract runs out, the provider may automatically extend it on a month-to-month basis.
However, if a provider wants to extend the contract:
The original contract must say whether the contract will be extended automatically on a month-to-month basis when it expires. The contract must say on what date the extension will start.
The provider must give at least 90 days' notice of the extension before the contract runs out. The provider’s extension notice must inform you that as of the date the contract is set to expire, you can switch plans, change service providers or cancel your service without penalty. As well, the notice must explain whether the contract will be be extended with the same rates and terms, or whether the provider proposes a new minimum monthly charge for service going forward.
Avoid transitioning to a month-to-month contract
If you want to end your contract and prevent it from rolling over into a month-to-month contract, you can give written notice to your provider 30 days before the contract expires. In your notice, say you want to end your service at the end of your contract.
Under BC law, if a business enters into a contract with a person under age 19, the minor isn't responsible for keeping up his or her end of the bargain. The contract is unenforceable against the minor. The exceptions are:
if the minor affirms or partially performs the contract on reaching age 19, or
the contract provides the minor with the “necessaries” of life — services that are vital to the minor’s health or welfare.
If you are under 19 and you want out of a phone contract, you can cancel it without penalty (unless having a phone was “vital to your health or welfare”). Make sure that you return the cellphone to the retailer. Also, be sure to send a letter to the cellphone provider stating your understanding that they'll close the account. Keep a copy for your files.
Work out the problem
If you decide to cancel your phone contract, calculate your cancellation costs. Your cancellation costs will depend on when you signed your contract and whether you received a free or discounted phone.
If you cancel during the trial period
If you cancel within 15 days of signing a phone contract (during the trial period), you can cancel without paying any penalty or early cancellation fee.
If you did not get a free or discounted phone
If you cancel after the trial period and you did not receive a free or discounted phone on signing the contract, the early cancellation fee can be no more than $50. The cancellation fee is the lesser of:
$50, or
10% of your minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months.
See below for an example of the cancellation fee calculation.
If you got a free or discounted phone
If you cancel after the trial period and you did receive a free or discounted phone on signing the contract, the early cancellation fee is to pay off any remaining device subsidy.
The device subsidy represents the discount that was given to you off of the retail price of your phone for signing a contract. The retail price is the lesser of the manufacturer’s suggested retail price and the price the service provider charges for the device without a contract.
In calculating the early cancellation fee, the device subsidy must be reduced by an equal amount each month, so that it is reduced to $0 by the end of your contract.
Calculating the early cancellation fee
In calculating the early cancellation fee, a month that has partially elapsed at the time of cancellation is considered a month completely elapsed.
If you did not receive a discounted or free phone on signing the contract, the early cancellation fee is the lesser of $50 or 10% of your minimum monthly charge for the remaining months of the contract, up to a maximum of 24 months.
For example, let’s say your minimum monthly charge is $70, and you have four months left on your contract.
The early cancellation fee calculation is:
10% of $70 = $7
$7 x 4 months remaining = $28
Because $28 is less than $50, $28 is the early cancellation fee
If you did receive a free or discounted phone on signing the contract, the early cancellation fee is to pay off any remaining device subsidy.
For example, let’s say the retail price of the phone was $695, you paid $95 for the phone on signing the contract, and you’re now in month 16 of a two-year contract.
The early cancellation fee calculation is:
$695 - $95 = $600 device subsidy
$600 divided by 24 months = $25 per month
$25 x 16 months = $400 that you have paid towards the device subsidy
$600 - $400 = $200 is remaining on the device subsidy, and therefore is the early cancellation fee
You should be able to view your remaining device subsidy by logging into your account on your phone provider’s website.
To cancel your contract, typically you would phone, email or send regular mail to notify your service provider of the cancellation. Check your contract to see if there is a specific way they want you to cancel.
If you phone, you may be transferred to another department that will make you an offer in order to entice you to stay. For example, they may offer a special monthly plan price or to reduce an early upgrade fee. As long as you are firm and repeat your desire to cancel, they will eventually process your request.
Your cancellation takes effect on the day that the service provider receives notice of the cancellation (unless you specify a later cancellation date). In other words, you don’t need to provide 30 days' notice.
You're entitled to have your phone unlocked
If your phone is locked to your provider’s network, you will have to get your phone unlocked in order to use your phone with another provider. You have a legal right to have your phone unlocked, at no charge, upon request. Make sure you tell the customer service representative that you want to unlock your phone before they cancel your account.
Common questions
Yes. You can transfer your number to a new service provider at any time. (You will need to pay any early cancellation fees.) Do not cancel your current service; only active telephone numbers are eligible to be transferred to a new service provider. Contact the service provider you want to switch to first. The new service provider will contact your old service provider to transfer your phone number.
No. If you use a prepaid service such as a prepaid phone card or pay-as-you-go service, the service provider does not have to notify you of changes to the phone plan.
Be aware that some prepaid plans are functionally very similar to postpaid plans. For example, in some “pay-in-advance” plans, a customer can deplete their prepaid balance and continue to use the service. The provider then includes overage charges on the customer’s next bill. Plans like this are treated as postpaid service contracts under the Wireless Code. In that case, the provider does need to notify you of changes to the phone plan.
Prepaid versus postpaid service plans
The test for whether a cellphone plan is a prepaid service or a postpaid service is: Can the service provider bill you for some or all charges after use? If the answer is yes, the plan is a postpaid service plan.
Who can help
Commission for Complaints for Telecom-television Services
