Searching for a reliable roofer

April 2 2014 by Ellen Roseman

Our home insurance company called to cancel our coverage for leaks coming through the roof. The reason? We hadn’t replaced the roof since 1986.

If we sprung for a new roof, we were told, the insurance company would consider reinstating our coverage.

Of course, this would save money for the insurer, since it would lower the risk of roof leaks and costly claims.

The idea of getting roof repairs scares me. I often hear stories from readers about defective shingles and worthless warranties. CBC Marketplace did a story on this in 2010.

Nevertheless, I’m looking for quotes from companies I find online. Not an easy job with a proliferation of firms.

First, I went to Homestars,which is well known for customer reviews of contractors. With hundreds of Toronto roofers listed, I looked for those with ratings of 9.5 to 10 (out of 10) and the owner’s name clearly visible.

I also went to Trusted Pros, which lets you search for contractors and find what their customers think of them. But there weren’t many reviews of Toronto roofers. Most were not yet rated.

What I did like was the site’s helpful articles, such as, “How to avoid a libel lawsuit when critiquing your contractor.”

Then, I ran across something called Smart Reno, which acts as a matchmaker for customers and contractors. I described the job and left my email address and phone number. Now I’m getting contractors calling me to see if they can inspect the roof and give quotes.

The final stop was the Better Business Bureau, which lists helps you screen out contractors to avoid (those with ratings of D or F). I checked out City Wide Roofing, which called me after I went to Smart Reno. They had an A+ rating.

Now I know why I waited so long to replace the roof. It’s an expensive job and requires an informed decision. Any advice is welcome. Wish me luck.

How to improve quality of financial advice

March 9 2014 by Ellen Roseman

CBC Marketplace recently tested advice given by 10 banks and investment firms. Using hidden cameras, it showed what happened when a potential client walked into each firm and said she had a $50,000 inheritance to invest.

While some firms performed well, others gave advice that Marketplace’s expert Preet Banerjee described as atrocious. Here are highlights:

In some cases, information was incorrect or misleading — even in response to direct questions, such as how fees are calculated.

Some gave unrealistic promises about returns, including one adviser who said that a $50,000 investment should increase by $10,000, $15,000 or $20,000 in one year.

Others failed to adequately assess the customer’s risk profile, which advisers are supposed to use to ascertain the suitability of investment products they recommend to a person.

I have my own story to tell about Maddy (not her real name), who works at the Toronto Star and told me of her dilemma.

Nine years ago, she met a friend of a friend who sold mutual funds. At the adviser’s urging, she took out a $50,000 line of credit to invest.

She was losing sleep because she hadn’t repaid any of the $50,000 — and she hadn’t gained much ground with the mutual funds purchased on her behalf.

Maddy didn’t understand the strategy, but did trust the adviser. She only started questioning things when her adviser quit the firm.

She decided to pay off the line of credit. But this wasn’t easy to do.

The adviser had invested the money in a dividend mutual fund. Each distribution was used to buy more mutual funds inside her RRSP.

Maddy had to pay deferred sales charges (DSCs) on the dividend fund. While DSCs disappear after seven years and she held the fund for nine years, each distribution started the clock running again.

Since she couldn’t sell her RRSP funds without incurring a big tax bill, she decided to transfer the portfolio to another adviser.

As a result, she could repay the line of credit only by contributing more money. The DSCs reduced her initial capital and the modest growth didn’t offset them. Meanwhile, she spent thousands on interest over the years.

Borrowing to invest rarely makes sense, except for sophisticated investors who can hold securities for years without being tempted to sell. Maddy was inexperienced and agreed to a leverage strategy when pushed to do so by her adviser.

The Investment Industry Regulatory Organization of Canada recently put out an investor bulletin on borrowing to invest. I don’t think it goes far enough.

Here’s a comment by Lindsay Speed, legal counsel and corporate secretary of FAIR Canada, an investor advocacy group. (I’m chair of the board.)

In my view, the warning language should be stronger. We have been advocating for regulators to take the position that leverage is only suitable for the most sophisticated investors.

This seems to suggest that the suitability onus is on the investor, not the adviser. And there is no mention of why an adviser would be motivated to recommend leverage.

FAIR’s recent work on leverage is shown here and here. It believes borrowing to invest is promoted by advisers hoping to increase their assets and earn more commissions and trailer fees.

If you pay for advice separately from products, you get better recommendations. Look for a fee-based adviser if you want a plan suited to your needs.

Otherwise, you can become a victim of incentives that put the advisers’ interests ahead of your own.

How does this appliance repair firm stay in business?

March 2 2014 by Ellen Roseman

Has your fridge stopped working? Has your dishwasher broken down?

Appliance Repair Guys. Service4Appliances. If you see these names, think twice about making an appointment.

Both names are used by a Toronto-area company with a reputation for unreliable repairs, high prices and unfriendly, even rude, customer service.

Check my Star column for links to the Better Business Bureau’s consumer alerts, plus Homestar’s low ratings by customers.

When I contacted owner Dan Vidoser, he refused to let me quote him because he didn’t like a previous article in the Hamilton Spectator.

Here’s a story from Marsha, who paid Appliance Repair Guys to fix her dryer, which was making a squeaky noise. The technician “fixed” it and charged $320. Two days later, the machine was making a different noise.

The technician came back, did something else and charged $80 for the service call (after saying there would be no charge because she’d filled out a warranty form).

The machine sounded even worse afterward. But all she got was a runaround.

“At the end of multiple calls, the company refused to do anything,” Marsha says. “I’m out $400 and I can’t get my money back.”

She initially paid with a debit card after being told no credit cards were allowed. She was allowed to use a credit card for the second visit, since she was out of town.

However, CIBC Visa would not give her a refund for the $80 service call, telling her she had to pursue her dispute directly with the company.

After posting a review at Yelp, where you can also find other customer laments, she tells me she’s shocked to see what happened.

“This company has ZERO accountability. How can they get away with this, other than saying that we seem to be stupid consumers?”

Here’s what I’d say. When you can’t wash or dry your laundry, keep your food cold or cook it at high heat, you’re anxious to get your appliances working again.

You find an attractive website for a repair firm that promises same-day service and has a few testimonials from anonymous customers. You’re too rushed to do any research and assume you’ll be treated fairly if your appliance can’t be fixed.

Next time, ask your friends for referrals. Check with the manufacturer to find authorized repair firms. Go to the BBB, Homestars and Yelp to find consumer complaints.

When you let technicians into your home, you’re at their mercy. They can take your machines apart and quote outrageous prices to put them back together again.

Don’t let up your guard, since the consequences can be costly.

How to be taken seriously when you complain

February 23 2014 by Ellen Roseman

I get emails every day from people who have been wronged. They want an apology, a refund, compensation — and sometimes, they want revenge.

I help them reach the right executives at a company who will listen, take action and find answers. This usually ends in a settlement.

Here’s my frustration. Some people aren’t good at advocating for themselves. They commit self-sabotage.

I have some tips on how to get better results.

Be professional and businesslike.

You’re talking to busy executives, so don’t waste their time. Cut to the chase. Summarize the problem and say what you want the company to do for you.

Many of the complaints I receive are WAY TOO LONG. People spend a lot of time talking about what happened and when. That’s tedious.

You’re not writing a book. One to two pages is enough.

Don’t get angry or use insults.

Be calm and courteous. Start by saying how much you like doing business with the company. Get the executives on your side and they’ll pay more attention.

Even when you’re frustrated, try not to let it show. Never use threats. Don’t swear.

Finally, accusations aren’t helpful. Avoid using words like fraud, theft and deception. You may end up with a legal letter telling you to cease and desist.

Focus on your priorities.

Don’t talk about every little thing that went wrong during a bad trip or home renovation. Edit yourself. Pick the top two or three issues and ignore the rest.

I’ve seen some people write lists, pinpointing as many as 15 things they want fixed. That’s overkill. Five should be the absolute maximum.

Make sure to give your contact information.

If you send an email, don’t just give your email address. Companies want to see your home address and phone number, with details on how to reach you during the day. They often prefer to call you back, rather than write to you.

Use short paragraphs.

When I forward emails from readers to companies, I break them up, using a sentence or two at a time. That’s easier to read than long paragraphs.

Bullet points work well in making your points. So does bold print. Always leave some white space on the page.

This advice will improve your chances of getting what you want. I wish you success in your communication campaigns.

Protect your car from diminished value after accident

February 14 2014 by Ellen Roseman

I wrote a Toronto Star column about problems getting the full resale value for a car that has been repaired after an accident.

In the column, I said that Viraf Baliwalla of the Automall Network in Toronto had come up with a diminished value calculator that could help you decide whether to sue the other driver for your loss.

Until now, there have been no court cases in Ontario to test this approach. But Baliwalla told me about one of my readers, for whom he acted as expert witness in court. Here’s how he described it in his blog.

Mary bought a demo SUV in 2010 from a new car dealer. The vehicle was a manufacturer’s executive-driven vehicle for approximately 15,434 km before the dealer bought it for sale. Since then, the dealer added about 1,300 km.

Mary used her vehicle for work, as well as carting her kids from place to place. She was adamant the vehicle be accident-free. The salesperson assured her it was.

She didn’t feel the need to have the salesperson’s assurance put in writing, nor have it inspected independently. The bill of sale said the balance of factory warranty was in place.

After driving it for two years, Mary noticed rust developing on one of the body panels. When she took it in for repair at a different dealer, she was told the warranty would not apply because the vehicle had been in a previous accident.

She contacted the original dealer to lodge a complaint, but felt she was not getting much satisfaction. She took the vehicle to a body shop to identify the damage and started a small claims court claim against the dealer.

The dealer said the accident must have happened while the car was in Mary’s possession. Mary said neither she nor her husband had ever been involved in an accident.

Further, the vehicle’s history report showed no claims, estimates or accident repairs against the vehicle, meaning it would have been fixed “on the sly” without reporting it to the insurance company or police.

The judge felt both sides were genuine in their belief they did not cause the accident. He suggested the dealer repair it at an estimated cost of $2,239.

The dealer obliged and fixed the car. Mary attempted to settle with the dealer for diminished value as well, but the dealer was not willing to entertain her request.

At the hearing on diminished value, Mary had a paralegal representing her. I was her expert witness to discuss how much less the vehicle was actually worth when she purchased it.

The judge said Mary had sustained diminished value. He felt both sides were innocent and the vehicle was probably involved in an accident before the dealership received it.

He awarded Mary $2,750 in diminished value and $600 in costs. But when her legal fees were factored in, she more or less broke even.

Mary pushed this issue to the limit out of principle. Thanks to her efforts, there is now a court case in Ontario where a judge has accepted the notion of diminished value and awarded accordingly.

After a long break, I’m back

February 11 2014 by Ellen Roseman

I gave a speech last September to a group of personal finance bloggers. I said having a blog was like feeding a hungry bear that never got satiated. Then, I took a rest from feeding the bear.

Though I stopped posting new material, I never stopped moderating comments at my blog. I want to let readers know they’re not alone with their complaints.

I’ll try to keep the momentum going in the future. Meanwhile, you can always send messages through my website and get a response.

February is a busy time. I’ll be speaking at four Toronto libraries this month, so please drop by if you can.

There’s the Barbara Frum branch on Feb. 19 (at 2 pm), Richview on Feb. 20 (7 pm), Don Mills on Feb. 26 (6.30 pm) and St. Lawrence on March 1 (2 pm).

How NOT to sell a car or get a free credit report

September 17 2013 by Ellen Roseman

In my job, I’m always hearing cautionary stories about consumers falling into traps they didn’t expect. It’s hard to do research about every pitfall that might exist.

John Pettitt, for example, ignored one vital step when selling his car privately. He didn’t insist on proof that the new owner had changed the ownership papers.

As a result, he was hit with towing and storage charges for the vehicle long after the sale. The bill he was asked to pay ($798) was equal to the sale proceeds.

I wrote about his dilemma and followed up with a second column after the towing company agreed to waive the bill.

Automotive writer Jil McIntosh covered this issue here. She added a warning about personal safety when selling a car privately.

Earlier this year, an Ontario man was murdered when he advertised his truck online and took it to a potential buyer.

If you agree to meet someone, make sure you’re going to a busy public place and never go alone. Ask for the person’s name and phone number beforehand and then call back to see if the number is accurate.

It’s not ideal to have a buyer come to your house, but if it must happen, don’t be on your own. Have a friend or family member there with you.

Close your garage door so no one can see inside, and if possible, find another place to park other cars you own.

Ask to see identification when you meet the person and look at his driver’s license, including the expiry date, if you’re going to let him test-drive the car. Honest buyers shouldn’t have any issues with proving they’re legitimate.

As for credit reports, readers often think they have to pay to get one. While Equifax and TransUnion sell instant online access to credit reports, mail delivery is always free.

Access to credit scores, however, is never free. The credit score is a profit centre for the reporting agencies, as is the sale of monthly credit monitoring services.

A reader named Ian signed up for Equifax’s Complete Advantage credit monitoring plan at $15 a month, since he could get his credit report and credit score included at no charge.

More than 18 months after trying to cancel, he’s still paying for the service and asked me for help getting rid of it. I’m sure that Equifax will release him shortly.

You can find Ian’s story below. It’s a compelling yarn about the company’s bureaucratic practices and disdain for personal privacy in a dispute.

How about a course on Investing for Beginners?

August 9 2013 by Ellen Roseman

You’re unhappy with the investing advice you get from your bank or broker, but you don’t feel confident about your knowledge and skills. Maybe it’s time to take an introductory course.

Learning about investing can help you become a do-it-yourself investor with an online brokerage account. You can start buying individual stocks and signing up for dividend reinvestment plans.

When you know more about investing, you can also have better conversations with financial advisers. It helps to understand the lingo and be able to describe exactly what you want.

My nine-week course at the University of Toronto campus starts on Sept. 12. Here’s a link for those who want to register or recommend it to others.

It’s the eighth year I’ve taught the course. We had more than 80 students enrolled last fall, a record number, in a big theatre-style classroom. There’s always room for more people.

You’ll learn about markets, products, advisers and regulators with me and interesting guest speakers. Mary Anne Wiley, head of iShares Canada, is booked for this fall. Doug Melville, head of OBSI (Ombudsman for Banking Services and Investments), may appear again as he has in recent years.

Each week, I prepare detailed handouts for students and send emails with interesting links. And I’m always ready to answer your questions.

There are no exams or written essays, but a few hands-on learning projects are assigned each week for those who want to try them.

Here’s what John, a student in last year’s class, had to say at the end:

Ellen, I’ve enjoyed your lectures very much; I know I’ll miss my Thursday evenings learning about investing and taking control of my investment portfolio.

I’ve expected my broker to look after my stuff. Truth is, they care more about their MERs.

It is somewhat scary to take over the portfolio, but certainly I think that I, like any interested and responsible investor, must overcome “the fear” and start looking at the portfolio on a regular basis and ask questions.

And those MERs? Oh yes, they are in my cross-hairs! I’ve got a meeting
with my broker next week.

John is referring to the Management-Expense Ratio, a shorthand term for the cost of investing in mutual funds. MERs are fairly high in Canada, attracting the attention of regulators.

Here’s a link to a discussion paper on mutual fund fees. And here’s my column on the need for change.

Competition Tribunal releasing surcharge decision July 23

July 17 2013 by Ellen Roseman

Canadian retailers would like to make customers pay surcharges on some credit card transactions. They told the Competition Bureau that credit card issuers were jacking up the fees that merchants had to pay for premium credit cards.

After several years of study, the Competition Tribunal will release its decision next week. I published a blog post in May, giving both sides of the story.

The Canadian Bankers’ Association (CBA), which represents credit card issuers, is trying to spin the story in its favour. Here are comments from media relations director Maura Drew-Lytle, sent to me in case I planned to cover the release.


The federal Competition Tribunal is considering whether or not to eliminate two credit card rules which currently benefit consumers. We have now been told that this long-awaited decision will be released publicly on Tuesday, July 23, 2013.

Here is some background information that may be helpful if you decide to cover the Competition Tribunal’s decision. The outcome could have a profound impact on our well-functioning credit card system in Canada, how and where Canadians use their cards and the rewards programs they have come to value.

Background on Competition Tribunal Hearings
In December of 2010, the Competition Bureau announced that it had filed an application with the Competition Tribunal to strike down two credit card rules as anti-competitive.

The first, the honour-all-cards rule, requires that if a merchant says it accepts a Visa or a MasterCard branded credit card, then it must accept all credit cards of that brand.

The second is the no-surcharging rule, which prohibits merchants from adding an extra charge – a “retail checkout fee” – to customers paying with a Visa or MasterCard credit card.

The Competition Bureau filed an application with the Competition Tribunal to strike down these rules, which it calls “restrictive and anti-competitive rules imposed on merchants who accept their credit cards.”

The Competition Tribunal, made up of three independent panel members, heard the case in the spring of 2012, taking testimony from a witness list that included merchants, credit card companies, economic experts and the banking industry. The CBA was an intervener in the case on behalf of credit card issuers.

The banking industry believes that these rules are important protections for consumers when they use credit cards and overturning these rules could have a very negative impact on how consumers use their credit cards.

Honour-All-Cards Rule
Let’s assume for a moment that the honour-all-cards rule is struck down.

You’ve taken your family out for dinner and when you pull out your Visa card to pay, you’re told that while the restaurant has a sign in the window showing they accept Visa, they don’t accept the kind of Visa card you have.

Or you could be in the grocery store with a cart full of groceries. You wait patiently in the checkout line but, when you offer your MasterCard as payment, you’re told that the store accepts some MasterCards but not yours.

Eliminating this rule would cause a great deal of uncertainty and frustration for consumers, because they may not know whether their credit card would be accepted until they finish their shopping and try to pay for their purchases.

On top of all that, the card that consumers use most to accumulate rewards points may not be accepted as much any more.

Eliminating the honour-all-cards rule could also hurt retailers. The Consumers’ Association of Canada did public opinion research and found that if retailers began accepting only certain types of Visa and MasterCard credit cards, 79 per cent of Canadians would simply go to a different retailer.

No-Surcharging Rule
Overturning the no-surcharging rule would allow retailers to add an extra charge, a “retail checkout fee,” to a purchase made with a Visa or MasterCard credit card.

Retailers are already allowed to offer a discount for other forms of payment, but very few do. The Consumers’ Association of Canada is strongly opposed to eliminating the no-surcharging rule, as are 84 per cent of Canadians according to their research.

Australia provides a good example of what can happen when surcharging on credit card purchases is allowed.

In 2003, Australian regulators allowed surcharging in the hopes that retailers would pass on the cost savings to consumers. But that hasn’t happened.

In fact, some retailers are imposing surcharges that are much higher than the cost of their credit card acceptance, sometimes double according to consumer groups in that country.

So Australians are paying twice for retailers to accept credit card payments.

Retailers Benefit from Credit Card Acceptance
There’s one thing that has been missing in the whole debate about the cost of credit card acceptance, and that’s the many benefits that credit cards give to retailers.

Credit cards provide retailers with fast, guaranteed payment that can reduce lines at the check-out. If every payment transaction took an extra 30 seconds, that would add another 27 million hours of staff time each year.

Retailers have many expenses that are part of their costs of doing business: rent, wages, utilities, supplies, technology and a fee to accept credit cards, to name a few.

But few people know that cash is one of the most expensive forms of payment for retailers, if you include time and effort spent handling, counting, reconciling and depositing cash every day, not to mention higher security costs, such as armoured transport and safety concerns for a store’s employees.

Credit card payments allow merchants to offer customers credit without taking on the risk. New payment options, such as contactless cards, also benefit merchants and make it easier and faster for customers to make purchases.

Canada has a very sophisticated credit card industry, with a lot of choice and competition for consumers. If either the rule on no-surcharging or on honour-all-cards is eliminated, the retail experience for Canadians could be drastically changed, and not for the better.

We will be commenting when the Competition Tribunal decision comes out and have spokespeople available for interviews then.

Thanks, Maura


Why did Aeroplan eliminate expiry date for points?

July 7 2013 by Ellen Roseman

The announcement took everyone by surprise. Aeroplan was killing its seven-year redemption deadline for points, scheduled to start on Jan. 1, 2014.

Aeroplan’s sponsor Aimia mentioned the cancellation of the harsh redemption policy in a June 27 news release. It also unveiled a new credit card partner (TD), but only if previous partner CIBC didn’t try to match the TD deal by Aug. 9.

Did Aeroplan decide not to date-stamp points because of a nationwide class action lawsuit by Merchant Law Group?

When I asked that question on Twitter, I heard from Aeroplan spokeswoman Christa Poole. She said members really disliked the deadline. The closer it came, the unhappier they were. The class action simply reflected that animosity.

A senior executive said the same thing to Star columnist Adam Mayers:

The unhappiness became clear during research into the current changes, says Kevin O’Brien, Aeroplan’s chief commercial officer.

“That one was huge,’ he says. “Aeroplan rewards play an aspirational role for members. They accumulate points to do something special and like to plan ahead. So the expiry thing was a big deal.”

However, there’s some bad news for Aeroplan members. They will need more points for business class and first class reward flights to Asia, North Africa, the Middle East, Australia and New Zealand.

The increase adds up to 20 per cent, coming on top of another increase in award redemption levels put in place in 2011, says The Points Guy website.

With a strong competitive market, it is about time Aeroplan cancels mileage expiration. Fortunately, more and more programs are going in the direction of “no mileage expiry.”

JetBlue just did the same thing and Delta doesn’t have mileage expiration either. However the 12-month expiry policy is still active. Members will have to continue to earn miles or redeem them each year in order not to lose their miles.

As an Aeroplan member, I’m glad I don’t have to make a mad dash to cash in my precious miles. But I’m not thrilled with the increase in redemption levels.

Like most collectors, I’m aspiring to take longer flights in more luxurious seats. This announcement means I’ll need more time to save more points than I needed before.