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Telecommunications company accused of improper collection and use of personal information

PIPEDA Case Summary #2003-186

[Principle 4.3]


An individual complained when he received a bill for long distance charges from a company he did not know.

Summary of Investigation

The company in question is a "rebiller," meaning it resells long distance telephone minutes that it buys from large companies. At the time of the complaint, another company (the "supplier") provided the rebiller with technical support for its billing system. As part of these services, the supplier would provide confirmation to the rebiller when telephone service was disconnected or connected via code.

The complainant initially stated that he had never heard of the rebiller. On the invoice that prompted his complaint, it indicated that the amount due would be processed on a credit card that he had with a particular store. The complainant, however, had cancelled his card a year earlier and had had no dealings with the store during that time.

The rebiller denied improperly collecting and using the complainant's personal information and provided an application form, completed by the complainant's wife, in support of its position. According to the CRTC, authorization to switch phone companies can come from any member of a household over the age of 18.

The complainant remembered his wife signing up for the long distance program, but he had assumed that it was the store that ran the program, not the rebiller. This explained his initial statement that he did not know who the rebilling company was.

Representatives of the rebilling company customarily read the terms and conditions of service to new subscribers. In this case, it also sent a copy of the terms and conditions, as well as a welcome letter, both on company letterhead, to the complainant shortly after his wife signed him up. Invoices also indicated that payments were to be made to the rebiller.

The complainant paid his long distance service account in full in May 2001, and cancelled his store credit card the following month. Prior to this, he also started using another long distance service provider. However, neither the complainant, nor the supplier, which ordinarily would have sent the rebiller a disconnect code or disconnect date number, informed the rebiller. The complainant's account with the rebiller therefore remained open, but inactive. The rebiller indicates that it does not assume that a customer has disconnected simply because there has been no activity on the account.

In April 2002, the supplier moved the rebiller's customers to a new billing system. Although the complainant's account was inactive, it had never been disconnected, and the move inadvertently caused it to be reactivated. Accordingly, the rebiller sent him two invoices. The supplier took responsibility for the error. The complainant contacted the rebiller, which then disconnected him, issued him a credit for all charges and closed his account.

The rebiller states that there was no intention to switch the complainant's line from his new long distance service provider back to the rebiller without his authorization. The complainant disagreed, and felt that the rebiller should have cancelled his telephone service when he cancelled his store credit card. However, the rebiller and store do not share a customer database. The telephone service and credit card service are separate, and the store does not tell the rebiller if an individual has cancelled his or her credit card.

Commissioner's Findings

Issued July 10, 2003

Jurisdiction: As of January 1, 2001, the Personal Information Protection and Electronic Documents Act (the Act) applies to any federal work, undertaking, or business. The Commissioner had jurisdiction in this case because a telecommunications company is a federal work, undertaking or business as defined in the Act.

Application: Principle 4.3 states that the knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate.

Since filing the complaint, the complainant confirmed that his wife enrolled him for long distance service with the rebiller with his knowledge and consent. While the Commissioner noted his argument that he withdrew his consent when he cancelled his credit card, he observed that the complainant in fact withdrew his consent when he signed with a new provider. The rebiller, however, had no way of reasonably knowing this since neither the complainant nor the supplier had informed it otherwise. The rebiller continued to operate on the assumption that it still had the complainant's consent.

The Commissioner was satisfied that the reactivation of the complainant's account was a mistake for which the rebiller was not responsible and that when it became aware that the complainant was no longer using its services, it took appropriate action to disconnect the service and close his account. He therefore found that the rebiller was not in contravention of Principle 4.3.

The Commissioner therefore concluded that the complaint was not well-founded.

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