A B.C. dad is accusing Rogers of price gouging, after his 11-year-old son mistakenly racked up $22,000 worth of data charges on his father's phone, during a family trip to Mexico.
"When I heard $22,000 and my son happened to hear $22,000, he went into a fetal position and was crying. It was just mind boggling for him," said Matt Buie, who has an account with Fido, which is owned by Rogers.
Buie is a financial planner from Burnaby, who said he is paranoid about roaming charges. Before his family went on vacation in January, he said Apple store representatives advised him to switch his iPhone to 'airplane mode' to prevent roaming.
However, in Mexico, his son got a sunburn and was allowed to spend time playing video games in the family's hotel room over the course of three days. He had games installed on the phone, but also streamed several hours of video.
Matt Buie said he is willing to pay a reasonable amount for his son's data use in Mexico, but he thinks what Rogers charges is outrageous. (CBC) "I made a mistake here — as his father — and he made a mistake. He turned off the airplane mode and was watching YouTube videos," Buie said. "I should have taken the SIM card out… or not let him use the phone. That's guilt that I have to live with. I clearly should have known better."
Buie got a text message from Fido, saying his phone was being shut down "for security reasons" because of "excessively high" data charges.
12 hours of streaming
11-year-old Mike Buie mistakenly racked up thousands of dollars in roaming charges, streaming YouTube videos while on vacation with his family. (CBC) The company later told him his son had used $22,000 worth, approximately 700 megabytes. According to Rogers website, that's about 12 hours of YouTube video streaming.
"And I say, 'How much?' At this point I am wondering, how did this happen? I was on airplane mode. We got no messages, other than when you shut my phone down after the fact."
Fido immediately said it would cut the bill to $2,200. However, Buie has been negotiating since to get a better deal. He believes the company is using the "shock factor" of the huge initial charge, to get him to settle for a bill that's still too high.
"It is gouging," said Buie. "It is $20 in Mexico [for domestic customers] to get the same amount of data [700 MB] from their carrier and it is $40 to get the same amount of data while in Canada."
It turns out, Rogers charges much more than both other major Canadian carriers, for pay-per-use video streaming in Mexico.
Rates several times higher
Rogers (and Fido) charges $30 per MB for streaming one minute of YouTube video in Mexico. By contrast, Telus charges $5 for the same thing, while Bell charges $8. (CBC) Rogers' (and Fido's) pay-per-use charge is $30 to stream one minute (one MB) of YouTube video. That's six times more than its competitor Telus, which charges $5 for the same thing. Bell charges $8.
"I don't think many Canadians would actually escalate this to the degree that I am doing here, but one of the reasons I am doing this is, this is just wrong and unfair business practices," said Buie.
Currently, the only way for a customer to access data outside the country for less — through their carrier — is to buy a roaming package, before leaving.
Rogers' packages for roaming in Mexico are also more expensive than its competitors — as much as five times more.
"It's simply a way for these companies to make significant amounts of money," said Buie, who said he didn't buy a package because he didn't plan to use any data on vacation.
He said what upsets him most is Fido didn't send a message to his phone until three days of charges had piled up. If he were a Telus customer, its system would have cut off data access when the bill reached $200.
"I would rather be cut off," said Buie. "If Fido was just reasonable about it, I would pay the amount and that would be the end of it."
Rogers cuts bill
Janet Lo of the Public Interest Advocacy Centre said she believes carriers use the threat of bill shock to push customers to buy data roaming packages before they go on vacation. (CBC) Buie said he is willing to pay $200, equivalent to the cutoff point for Telus customers. He said Fido has now agreed to slash the bill to $500.
"It's very unfortunate this customer had this experience," said a statement from Rogers spokesperson Jennifer Kett.
"When this type of situation happens, we have internal processes in place to identify these customers and their usage prior to their bill being sent out and then we proactively work with them towards a resolution."
The Canadian Radio-television and Telecommunications Commission has heard from many Canadians upset about roaming charges and it has proposed capping those fees at $50, as part of a new mandatory code of conduct for wireless providers.
The major carriers told CRTC hearings mandated caps would be technically difficult, if not impossible to administer. New rules are expected this summer.
The Public Interest Advocacy Centre (PIAC) said Rogers is particularly uncompetitive in this area. Janet Lo said Mexican carriers likely charge the company a small fraction of what it charges customers.
Prices not justified
The Mexico data usage is calculated on Matt Buie's bill, for the first two days of his son's video streaming. February 1 data use will show on the next bill. (CBC) "There is a very large range of data roaming rates and Rogers is one of the largest carriers in Canada, so they should be able to negotiate better prices for their consumers based on the subscribers that they have," said Lo.
Canada has the highest rates for international data roaming of any Organization for Economic Co-operation and Development country. PIAC estimates Canadian telecoms made $4 billion in 2010 from data fees, one quarter of their total revenue.
"Certainly I think consumers are justified in being a little skeptical of the rates they are being charged," said Lo.
Rogers did not explain why it charges four to six times more than its competitors for the same service in Mexico, despite repeated questions from Go Public. It also refused to disclose the rate it pays its Mexican partner.
"We sign agreements with individual carriers in countries around the world. We wouldn't disclose the terms of those agreements," said Rogers.
Since most customers who want to use data buy set packages before they travel, the company said those rates don't usually apply.
"In addition to pay-per-use services, Rogers offers and proactively markets a range of roaming passes (data) to allow customers to make the right choice when they travel," said the statement.
Like Buie, Lo believes carriers use the threat of 'bill shock' to sell those packages.
"It's a little unfair to put the burden on the consumer to estimate how much data they are going to use before they go abroad," she said.
Buie said he is now taking his complaint to Fido's ombudsman and also wants his contract cancelled without penalty.
"It's certainly taken me weeks to get over this, and I've talked to a number of people about it," said Buie. "At least every second person talks about roaming charge bill shock ... as far as I'm concerned these companies are purposely doing this."
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