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Cancelling a Phone Contract - Understand your legal rights

Understand your legal rights

If you signed up less than 15 days ago

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 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. 

If you cancel after the trial period

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 "Deal with the problem" for an example of how to calculate the early cancellation fee. 

If you got a free phone

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 "Deal with the problem" for how to calculate the early cancellation fee when there is a device subsidy still owing.

If the provider changes the contract

"My cellphone contract included unlimited data. After the first year, my provider notified me that they were putting me on a 3GB 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

Under the Wireless Code, a service provider can change a key term or condition of your cellphone contract in one of two ways: 

  1. 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.
  2. 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 upgrade or change your phone

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.

If your contract is running out

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:

  1. 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.
  2. 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.

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.

If you're under age 19

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.