A 'black market' for wireless cell service has popped up in Canada

Some Canadians are apparently taking advantage of pricing discrepancies in different regions to get cheaper cellphone service.

Canada cell service black market Koodo
Credit: Thinkstock

Two articles at iPhoneInCanada.ca and AlphaBeatic.com tell the story of one enterprising Canadian who takes advantage of a loophole to provide substantially cheaper wireless cell service for a one-time $100 payment.

How exactly he does it appears to be unclear, but it involves pricing discrepancies in Canada, where lower-populated provinces like Manitoba and Saskatchewan see much cheaper cell service. Basically, the scheme involves signing up for an account in one of these regions, where Canadian wireless service provider Koodo offers a 5GB monthly data plan for $48, then selling the account to people who live in more populated regions of the country, where the same plan typically costs at least $90, according to the reports.

The report at AlphaBeatic.com cites a source who says one provider, who refers to himself online as "Tony," sets up the $48 plans in Manitoba and ships the SIM cards to his customers, who then access the internet by roaming on the other wireless service providers' networks in those areas. "Tony" takes a one-time $100 fee, and those who pay for it supposedly see their monthly wireless bill nearly cut in half.

Tony, however, has refuted these claims on the post on Kijiji (an online classified site) where he offers the service. Acknowledging the articles about his venture, "Tony" said he does not ship SIM cards and that the customer never has to change their address, phone number, or area code. So it's unclear if this is actually how "Tony" carries out this scheme and he just doesn't want everyone to know how he does it, or if he executes it some other way.

The listing asks for a $100 payment for a $48 monthly plan with unlimited calling and texting and 5GB of data with "no zone restrictions." For what it's worth, Tony also shares screenshots that he claims are reviews from satisfied customers.

This loophole has apparently been around for a while, with both of the aforementioned articles pointing to a forum conversation started in 2008 on a site called RedFlagDeals.com. This post showed a $55 monthly plan (available for $49.50 if you sign up with your own device) that offers unlimited calling, texting, and 5GB of data. The forum's moderators, however, posted an update five years after the discussion was started warning that "any discussion regarding getting this deal outside of Manitoba or Saskatchewan will no longer be allowed."

The article at iPhoneInCanada.ca also says other people offer similar services on Craigslist.

That article also mentions that Koodo audits its customers' accounts to look for those who might be exploiting this loophole and takes away their cheaper service away. One commenter on the article claims this happened to him. It's not exactly clear, but it sounds like the company simply increases the monthly cost so it is in line with what other customers pay in that region.

This all seems pretty difficult to pull off, especially considering that even "Tony" admits in his post that a lot of people offering the same deal will simply keep the money people send them without doing anything in return. But considering that the people who pay $100 to get in on it make that money back in two months of cellphone bills, it's probably a profitable venture, for as long as it lasts.

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