Mobile Plan Theft
Several months ago I needed phone access, and my previous solutions stopped working. So I went to No Name Mobile and bought a top-up card for $25 and a SIM card for $5.
No Name is one of the bargain basement brands of cellphone providers. They offer a $19/month plan that includes calling, texting, and 1GB of data. There are several other brands (Public Mobile, Lucky Mobile, SpeakOut, Petro-Canada Wireless) but I decided upon No-Name because it offered some data and because I could conduct all transactions in cash. (Like all the other providers, No Name wants me to connect a credit card so it can deduct money every month, but I very specifically did not want this.)
The No Name advertising promises no "long-term contracts" or "hidden fees".
Both of these claims are false. It is true that you are not bound into an explicit long-term contract at No Name Mobile, but there are several dark patterns the company uses you to encourage you to signing up for what is effectively a contract. For those of us who conduct business by cash, there are in fact hidden fees; if my math is correct, in order to avoid these fees you must stay subscribed for at least fifteen months. Staying subscribed to a service for fifteen months is either a contract or a hidden fee.
I am not yet destitute, but I do not have the budget for an expensive phone plan each month. I had hoped for some short-term phone access, and was once again reminded of how predatory cellphone practices in Canada are.
Hidden Fees
To top up a No Name cellphone with cash, one has to go a participating retailer (No Frills and Zehrs both work) and purchase a "top-up card", which is actually just a PIN number on a receipt.
After activation, the monthly charges for the two lowest price plans on No Name Mobile are $19 and $24 per month. The No Name terms of service state that if you have any extra in your account it will disappear after 37 or 67 days, depending on the denomination you purchase (see Section 35):
Prepaid funds are valid for a specified number of days starting from the time on the day they are added to your account (“Active Period”). Unused funds will expire at the end of the Active Period. Expired Prepaid funds will be restored if you Top Up your account within 7 calendar days of their expiry.
The Activity Period for the $15 top-up is 30 days, and the Period for the $25 top-up is 60 days.
Of course, No Name plays sneaky tricks with prime numbers to make sure that people who purchase top-up cards almost always have a surplus in their accounts. The cheapest plans cost $19 and $24 per month, but they only sell top-ups in denominations of $15, $25 and $100. The least common multiple of 19 (a prime!) and 15 is 19 * 15, or 285. That means in order to zero out the balance on your account, you have to stay with No Name for 15 months. Otherwise there will be a surplus in your account. (Purchasing $25 or $100 dtop-up denominations does not speed this up.)
I claim that this is a hidden fee. Stated more strongly, I view it as theft. It is clearly a dark pattern, and it is clearly unnecessary. As I stated, these "top-up" cards are not cards, but PIN numbers printed on receipts. It would be easy for No Frills/Zehrs to sell top ups of $19 and $24 instead of (or in addition to) $15 and $25. But they choose not to, because they want people to have surplus money in their accounts at the end of each month, which incentivizes people to stay with the plan so they don't lose the money. For somebody like me who wants phone access for one month, this means I am paying $25 (at least) for a $19 phone plan, costing me $6 extra that No Name Mobility steals from me. This is theft. It is legal because of Section 35 above, but it is still theft: I am losing $6 for services I did not purchase.
The problem is that this is theft for people who use cheap phone plans, who (on average) tend to be people without the disposable income to afford $50+ each month, and these tend to be the kinds of people who do not have the means to launch class action lawsuits for theft. No Name Mobile is preying on the financially insecure.
SIM Cards
The story, of course, gets worse. In order to sign up with No Name Mobile I had to spend $5 on a SIM card (which is a good price -- most other brands charge $10). This SIM card ought to be associated with my account so that I can get phone service.
Sure enough, several months ago I bought a SIM card, and sure enough I set up an account. Then (because No Name is supposedly No Contract) I stopped paying for phone service, and as expected my phone service stopped. All is well so far, other than the $6 in my account that was going to evaporate.
But when I wanted phone service again, I could not connect to the No Name server while on mobile to add funds. The phone said the SIM card was not registered. So I went on the No Name Mobility website and tried to reregister the SIM, except that said the SIM card was registered. So I called customer support. They confirmed my name and postal code and then told me my account was deactivated, and that the only way I could get access again would be to purchase a new SIM card.
This point is subtle, but it's very important: No Name Wireless still has an account associated with the old SIM card. That account is in my name. Apparently, that account in my name is going to be kept in No Name Mobility's database forever, making it a juicy target for data breaches. Reactivating my account so I could use my existing SIM card boils down to flipping a boolean variable in some database.
Meanwhile, the same people who can verify that I once had a SIM card registered with No Name Mobility tell me that it is impossible to reactivate that SIM so I can add funds to it. Instead I am supposed to purchase a brand new SIM card and make a second account for No Name Mobility to store forever. This is theft. They are holding my data hostage. Either they should erase my old account so it is not in their records, or somebody should be able to flip the variable that reactivates my account. It is entirely within the power of No Name Mobility to do this, but they won't do so, because they want me to spend the extra money on a SIM card, even though I already have a SIM card and an associated database record in their system.
I understand why No Name is doing this. They want me to keep paying them month after month, and this is yet another dark pattern to keep me a paying customer. It is reprehensible. It cost the company more money to take my customer support phone call than it would have to allow me to reactivate that SIM card so I could give them fresh money in my account. It is another hidden fee. It is another implicit contract. It is theft, and as usual it preys upon the most financially insecure phone users. At the end of the day I am paying $30 for a $19 phone plan unless I extend my contractless contract over multiple months.
Collusion and Oligopolies
The bargain-basement brands offer various features for their lowest-price plans, but they only come in two denominations: $15 (for Telus and 7-Eleven SpeakOut), and $19 (for everybody else). Given that the CRTC mandated that the major carriers offer $15 postpaid occasional-use plans, this is doubly curious.
Firstly it is curious that Telus is the only major carrier offering a $15 plan now, and unlike the CRTC directive mandates, you don't get 250MB of data unless you give them an auto-pay option.
Meanwhile Bell:
and Rogers:
have both mysteriously discontinued their $15 plans within months of each other. Surely there is no collusion here? Surely oligopolies provide enough competition to give consumers proper choice?
I am also sure that the consolidation of brands used to obscure the oligopolies in this space are also perfectly fine:
- Bell runs Bell and Lucky Mobile. Virgin, PC Mobility, and No Name all use this network.
- Rogers runs Rogers, Fido.
- Telus runs Telus, Koodo, Public Mobile.
Freedom Mobile exists and has a $15 plan. That is not much competition but at least it is something. Maybe there are other players, but there are not too many.
To be perfectly clear: the CRTC had to step in to mandate the mobile wireless oligopolies to offer cheap prepaid plans. If it had not made this mandate would the fierce marketplace competition have provided cheap cellphone plans for occasional users? No. No it wouldn't have, and apparently now that the CRTC decision no longer applies those providers are withdrawing the cheap plans.
Other Alternatives
There are a couple of Rogers resellers (Good2Go/Petro-Canada and SpeakOut) that might provide cheaper cellphone connectivity with very expensive per-minute rates.
VoIP calling (for example with voip.ms) is another option, but that is difficult without a credit card, and it won't work when I actually need cellular connectivity.
Edge Case
I understand that most people are not in my situation. Most people are happy to pay $50+ per month for cellphone service, and most people want/need lots of data on their phones. Furthermore very few people avoid credit and debit cards the way I do. So I don't expect anybody will have sympathy for my situation. However, it is not out of the question that others who are on limited budgets will be similarly affected.
It is getting more and more difficult to exist without having a phone. I do not like having a phone number (and having a cellphone number is downright irritating given all the spam calls) but it makes me angry that it is so difficult to have sporadic phone service without spending a lot of money.
If there was justice in the world we would see that these are predatory practices enabled by oligopoly, and we would put an end to them. But even the small amount of justice doled out by the CRTC has been subverted, and with a new "free-enterprise" government on its way I expect there will be no justice in my lifetime.