What should retailers do about errors?

December 30 2008 by Ellen Roseman

What if you spot a price that looks too good to be true and turns out to be a mistake that the retailer refuses to honour?

What if you have gone to considerable pains to buy the merchandise that’s falsely priced?

The federal competition bureau, which polices misleading advertising, lets companies off the hook in certain circumstances.

The Competition Act prohibits the sale or rent of a product at a price higher than its advertised price. The provision does not apply if the advertised price was a mistake and the error was immediately corrected.

What bugs my readers is finding an advertised price that is not immediately corrected. They want some compensation for their time and trouble (and related damages).

I’ve posted a few complaints below about Travelocity, Bell and Sears Canada.

What do you think? Should companies be forced to make good on their own errors?

Hard to find good news in 2008

December 23 2008 by Ellen Roseman

You read the newspapers every day and learn about many terrible things you didn’t even know were happening. That happens to me and I’m a journalist who follows the news pretty closely. There’s lots of uncertainty going into the new year.

How did a U.S. mortgage meltdown lead to a worldwide credit crisis? Will this instability end in 2009 or will it drag on longer?

How did a commodities boom go bust in just a few months, pushing down the price of oil from almost $150 U.S. a barrel to almost $30?

What happened to the Canadian dollar’s parity with the U.S. dollar? Why didn’t we travel more outside Canada when we could have enjoyed lower prices?

And how did Bernard Madoff, a New York money manager acting on his own, create the biggest Ponzi scheme in history, ensnaring many people and institutions that should have known better?

From my vantage point, the only good news is that people are paying attention to their personal finances. It’s a priority, in some cases an emergency, but no longer an issue that can simmer indefinitely on the back burner.

This means we journalists can get your attention with articles about the high cost of credit, the importance of getting good advice, the way your money is protected if an investment firm goes under and the need to stay safe.

I’m also happy to see companies recognize the importance of keeping customers happy, even in a bad economy and even if their business is in peril.

See the comment below from a Chrysler customer, whom I helped get reimbursed for the extended warranty she bought that was not explained properly to her.

What were they thinking?

December 15 2008 by Ellen Roseman

Here’s a new rule I’ve developed. The more quickly a consumer complaint is resolved, the more embarrassed a company is about how it behaved — and the more anxious it is to avoid getting anything into the newspaper.

How else can I explain the one-day wonders, the cases where customers beat their heads against a brick wall for months and get instant answers once they contact me?

So today, I’m starting a new feature in the blog. These are complaints so outlandish that you can’t imagine how companies can ignore them for as long as they do.

In other words, what were they thinking?

Canadian banks slow to pass on rate cuts (2)

December 12 2008 by Ellen Roseman

The banks used to pass along rate cuts by the Bank of Canada right away. But lately, they’ve been dragging their feet. I wrote about this last October.

Central banks are slashing interest rates to encourage banks to do more lending. When banks come up with excuses why they can’t pass along the full rate cut, the whole exercise is counter-productive.

This week, a couple of Manulife One mortgage customers told me they’re furious at what they think is deceptive advertising. Dan sent me his email correspondence with Manulife.

Bottom line is Manulife sold M1 to all clients, including us, as a “prime rate” product, and your marketing materials, advertising, and advisors presented it as such. You have conveniently changed your practices due to market conditions.

Until October 2008, M1 rate at prime.

From October to December 2008, M1 rate at prime plus 0.5%.

After Dec. 9, 2008, M1 rate at prime plus 0.75%.

There is absolutely no protection for an M1 customer. Manulife can, and is obviously prepared to, set the rate wherever you see fit.

To state that the M1 rate is “not linked in any way” to prime is an outright lie. The M1 rate followed prime from the time you introduced the program!!

Dan was responding to an email from a customer service rep who said the following:

It’s a common misperception that the Bank of Canada supplies the funds for Canada’s banks to lend out. The Bank of Canada rate is used within the banking industry for a number of purposes but funds are not actually available from the Bank of Canada at that rate.

A bank uses the deposits it receives to fund loans and mortgages. With the Bank of Canada’s recent efforts to lower borrowing rates, enormous pressure has been placed on banks regarding rate setting decisions in light of the squeeze between what they pay out for deposits and what they charge for loans and mortgages.

Once credit conditions do ease, it is true Manulife One rate will most likly have a closer relationship to Prime, although it is not linked in any way. Bank Of Canada officially announced yesterday that Canada is now in recession, clearly the market conditions are not improving and as a result rate changes are occurring as they are.

Since customers were pushing hard for rate cuts, Manulife One had to post a notice at its log-in page, explaining why this wasn’t going to happen.

As of October 10, 2008, we were unable to reduce the Manulife One Base Rate in unison with the Manulife Bank Prime Rate. We want to ensure that all Manulife Bank customers understand that the Manulife One Base Rate is no longer at the same level as the Manulife Bank Prime Rate. The Manulife One Base Rate is a distinct rate of interest, separate from the Manulife Bank Prime Rate and is based on competitive conditions in the marketplace, cost of funding Manulife One accounts, and the overall value of the product.

And here’s Dan’s response:

Bottom line is you have misled your customers and engaged in a “bait and switch” practice here. The Manulife One program was sold as following prime and ALWAYS did from the time it started. Your decision here puts Manulife in the same light the big banks that will “nickel and dime” or rip customers off wherever possible. If the rate drops again at next B of C meeting, and M1 stays the same, we will looking to move our business elsewhere.

Borrowers are a captive market, since they can’t move their mortgages elsewhere until the renewal date. Manulife One customers are even more tightly bound, since they do all their banking there and use the float in their accounts to pay off their mortgages more quickly.

All-in-one plans, such as those offered by Manulife and Canadian Tire Bank, offer flexibility and savings. But there’s a drawback: your mortgage has no finite term. It never expires, unless you or the bank decides to end it, and then you pay discharge fees.

You can find lots of discussion about Manulife One here at the Red Flag Deals forum. The product was introduced in 1999.

What will it take to get Canadian banks to pass on the central bank’s rate cuts to borrowers? If you have any suggestions, please let me know.

New cellphone or PDA not working?

December 8 2008 by Ellen Roseman

I’ve been telling people to hold onto their old appliances (see my latest CBC radio commentary). But does that apply to cellphones as well?

New York Times columnist David Pogue wrote a negative review of the BlackBerry Storm, which he says is by far the worst product that Research in Motion has ever produced. About 100 readers who bought the Storm told him they regretted it, he says here.

Today, I heard from Paul, who’s sorry he bought the Samsung Instinct cellphone. He tried to give it back to Bell Mobility, but was out of luck.

I called into Bell using my Instinct the day after I received it (don’t have a landline) and they told me that since I’d used the phone for more than 15 minutes they were not able to refund me. The only call I’d made was the call into support. As I waited to speak to them to complain, I used up my 15 minutes. Pretty sad, eh?

So, tell me about the new generation of cellphones and personal digital assistants. Have you upgraded yet? Would you recommend others do so? Or should we keep our old phones going for as long as we can?

You can find more from Paul in a comment below, which includes links to petitions from Samsung Instinct owners.

Thanks and no thanks

December 3 2008 by Ellen Roseman

Doing a consumer advocate’s job means getting lots of thank you notes. People are grateful, surprised and thrilled when they find someone who can help resolve their longstanding problems.

But some people refuse help. All they want to send companies a message — or send a message to other potential customers.

I got away last week and managed to enjoy time at the beach. That made me thankful. And I came back to the never-ending parade of thanks and no thanks.