Bell Canada Modem Highjacking

Recent Developments

PURSUANT TO THE ORDER OF THE HONOURABLE MR. JUSTICE CRANE, DATED MARCH 1, 2007, THIS PROPOSED CLASS PROCEEDING HAS BEEN DISCONTINUED AND IS NOT BEING PURSUED FURTHER.

Order of Crane, J.

URGENT NOTICE EFFECTIVE JANUARY 29, 2007

Urgent Notice

Overview of Claim

A Statement of Claim was issued in the Ontario Superior Court of Justice on July 22, 2004 against Bell Canada alleging for damages and reimbursement of all fraudulent long distance telephone charges paid by customers to Bell Canada as a result of modem hijacking scams.

This action is brought under the Class Proceedings Act, 1992, on behalf of a class consisting of any person in Canada, who paid Bell Canada for fraudulent long distance telephone charges for calls to foreign locations such as Sao Tome, the Cook Islands, Nauru, Guyana, Guinea-Bissau, Tuvalu and Tokelau.

Modem Hijacking, also known as “Internet dumping”, can affect anyone with an Internet telephone line connection who unknowingly downloads programs from certain Internet websites or pop-up windows.

Modem Hijacking results in a downloaded file accessing software on a user’s computer and causes the modem to dial phone numbers in foreign countries resulting in long distance telephone charges. This occurs without the knowledge or consent of the user.

This constitutes fraud and results in long distance telephone charges being accrued where the victims of the fraud did not initiate or place the long distance telephone calls in question.

The Statement of Claim, which contains allegations which have yet to be proven in Court, alleges that Bell Canada has known or ought to have known about these modem hijacking scams since at least January 1, 2002. Modem hijacking scams have increased significantly in Canada in recent years.

The Statement of Claim alleges that Bell Canada has been aware or ought to have been aware that modem hijacking could occur and was in fact occurring and ought to have warned its customers in that regard.

The Claim further alleges that Bell Canada was in a position to prevent the fraud by withholding settlement payments to other telephone carriers for completing customer long distance telephone calls in those locations.

The Statement of Claim further alleges that Bell Canada, as the largest telecommunication company in Canada, was uniquely positioned to monitor, become aware of, investigate and take proactive steps to prevent such fraudulent schemes.

The Statement of Claim furthermore alleges that the telephone calls charged for were not in fact completed to the destination locations for which Bell Canada charged and collected monies. The calls were “short-stopped” — short-terminated at other locations for which the permanent rates were comparatively much lower.

The Statement of Claim alleges that Bell Canada has been aware or ought to have been aware that modem hijacked telephone calls were not actually completed to the destination locations for which Bell Canada charged and collected monies from customers.

The plaintiff alleges that Bell Canada was in a position to withhold settlement payments to telephone carriers where it knew or ought to have known that the calls were not completed to the stated destination locations.

The Statement of Claim alleges that Bell Canada is in breach of its own terms of service in levying long distance telephone charges for modem hijacked calls where Bell Canada knew or ought to have known that the charges are excessive, improper and inaccurate in that the calls were actually completed to locations for which per-minute rates were comparatively much lower than the stated and billed for foreign locations.

The Representative Plaintiff was hit with close to $1,000.00 of long distance charges on her phone bills earlier this year for calls that she did not make and that were initiated only as a result of modem hijacking.

The Representative Plaintiff vigorously complained to Bell, however, after all her complaining, all Bell did was reduce the amount owing giving her the best rate on the calls but maintaining that she was responsible for payment. The Representative Plaintiff made payment of the bill since Bell threatened to cut-off her phone service if she did not pay.

According to CRTC rulings, Bell Canada cannot suspend or terminate local telephone service for failure to make payment of disputed long distance telephone charges as long as the customer makes payment of the legitimate local charges due and owing.

Bell Canada is the largest provider of wireline service and Internet access in Canada. It has 26 million telephone connections and 2.5 million Internet connections.

The Representative Plaintiff has served materials in support of Certification of the action as a class action. Bell is formulating its response. It is anticipated that the Certification Motion will proceed to argument before the Court in mid 2006.

Press Release

Amended Statement of Claim