New class action suit challenges Bell’s interest rate hike on unpaid bills

A Quebec law firm has filed a class action suit against Bell Canada asking the company to reduce its interest rates on late bill payments. On June 1, 2010, Bell increased its monthly interest rate from two to three per cent. But when compounded for the year, the increase brings the company’s annual interest rate to 42.58 per cent, up from the previous 26.82 per cent. “What we’re claiming is a reduction—for people who have paid late fees since June 1 of this year of the 42.58 charge--back to 26.82,” John Gadler, a partner with Paquette Gadler, the law firm that filed the suit, told The Wire Report. “We’re also claiming $100 per member of the group for moral damages and $200 for punitive damages. There could be a lot of people in this group.” The suit was filed on Oct. 28 with the Quebec Superior Court on behalf of plaintiff Louis Aka-Trudel, a Montreal, Que. resident who says Bell’s yearly interest rates are excessive. Under Quebec’s civil code and the Consumer Protection Act, a single plaintiff is required to file a class action suit. Other plaintiffs can later join the case. Gadler said he expects a large number of Bell customers to add their names to the suit. In Quebec, an interest rate of 60 per cent or higher qualifies as a criminal offense. Gadler said his firm will argue that Bell’s interest rates qualify as excessive. “At some point in time, some courts will have to decide what is an excessive rate of interest,” Gadler said. “Where will they draw the line?” But Bell spokeswoman Jacqueline Michelis told The Wire Report in an email that the annual interest rate only applies to customers who haven’t paid their bills for an entire year. “The interest charge of 42.58% would only apply if a customer did not pay their bill for an entire year. The monthly late payment fees are 3%,” Michelis wrote. Michael Janigan, executive director of the Public Interest Advocacy Centre (PIAC), said in an interview that Quebec has taken a lead on consumer rights issues. “It’s an interesting kind of phenomenon that is taking place, whereby the provincial regulators are jumping into the gaps associated with federal supervision,” Janigan said. Anthony Hémand, a telecom analyst with the Quebec consumer group Union des consommateurs, said in an interview that Bell’s Quebec competitors charge lower annual interest rates for late payments. Videotron Ltd. charges 19.56 per cent, Cogeco Cable Inc. charges 24 per cent, and Rogers Communications Inc. and Telus Corp. both have an annual interest rate of 26.82 per cent. Bell has previously said it raised its interest rates to cover increased costs associated with collecting payments. Gadler said he hopes to have the class action suit authorized by the court within the next 12 to 18 months. jmigneault@thewirereport.ca

New class action suit challenges Bell’s interest rate hike on unpaid bills

News | November 5, 2010

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