Companies change their tune

Maybe in a recession, companies make more of an effort to hang onto customers. It costs more to recruit new clients than to keep the ones you have.

These days, I find the turnaround time is faster when I send complaints from readers to large firms. The complaints are often resolved within a day, which used to be unusual.

See comments below for recent cases where companies changed their tune and gave customers what they wanted, after denying and stonewalling such requests before.

All it takes is a little nudge from the media to get the wheels rolling.

Braaking news: TD Canada Trust has listened to customers and decided to cancel the $35 inactivity fee it was going to impose on those with unsecured lines of credit. I’m sure the comments at this blog helped play a role in that decision.

So what do you think of the budget?

The home renovation credit was one of the incentives handed to taxpayers yesterday. Ottawa hopes to stimulate local business and also lift home renovators out of the underground ecoomy.

You can get a 15 per cent tax saving on fix-up projects from $1.000 to $10,000 you do before next February, as long as you have receipts. You can also “double dip” by getting an ecoEnergy retrofit grant of up to $5,000 on the same project if it qualifies.

I commented on the budget in print and on video here. I also did a CBC radio commentary on three smaller announcements that didn’t make the papers. Now I’d like to hear what you think.

* The government thinks Canadians are not getting a fair deal on credit cards. It has a long list of what it wants credit card issuers to do, based on complaints received by the Financial Consumer Agency of Canada.

Federally regulated institutions that issue credit cards need to beef up their disclosure of terms and conditions, the budget says. They should set a minimum grace period on new purchases made with a credit card, provide clear and timely advance notice of changes in rates and fees and improve their debt collection practices.

* The government thinks Canadians aren’t getting a fair deal on mortgage insurance. You’re required to take out insurance, which protects the lender from default, if your mortgage is less than 20 per cent of the value of your house. It’s underwritten by Canada Mortgage and Housing Corp., as well as private sector insurers Genworth and AIG.

Mortgage insurance needs to be more transparent, understandable and affordable, the budget says. Also, consumers should not be charged more for mortgage insurance than the true cost of obtaining that insurance. This refers to commissions and referral fees paid by mortgage insurers to financial institutions.

* The government wants to raise the level of financial literacy among consumers. This means improving the ability to understand financial issues, applying that knowledge and assuming responsibility for one’s own financial decisions. Financial literacy is an important life skill. It’s not taught in schools and it’s often provided by the companies that get people into trouble with credit cards and mortgage insurance.

This spring, an independent task force will be established to make recommendations to the Finance Minister on a cohesive national strategy on financial literacy. The task force will include representatives of business, education, volunteer grous and academics and will be supported by a federal secretariat.

Hear, hear. I really like this idea of strengthening Canadians’ financial literacy. It’s hard to tell people to look after their best interests when they’re confronted constantly with advertising messages that send them in the other direction.

TD hits customers with fees for inactive credit lines

Here’s a new bank charge that is making people angry. I got three emails from TD Canada Trust customers today, complaining about the new inactivity fee.

Starting in March, if you have an unsecured line of credit and if you haven’t used it for a year, you will have to pay a $35 fee. There’s a cost to maintaining that credit line, you see, and TD has decided the customer has to absorb it.

Check comments below to see the indignation from clients getting the news and the TD response.

Good news for a change

I’m inspired by the spirit of optimism in the United States after the Obama inauguration. Maybe life will be better for ordinary citizens with a leader who really cares about their welfare.

For example, the new U.S. president specicially thanked the waitstaff at yesterday’s luncheon and said he was aware how difficult it must be to serve a room full of politicians.

Here are a few stories of large companies coming through for customers — with a little prodding from outside agitators.

The Home Depot case is about unreliable advice given by store staff. I wasn’t sure HD would agree to pay for the damage, but it eventually decided in favour of the customer.

The Miele case is about high-end kitchen appliances that failed to endure. I went to bat for the parents of a personal finance blogger, who expressed his gratitude here.

Questions, we get questions (2)

This is another instalment of a blog feature I started last May. Where does the time go?

Below you’ll find answers to two questions: Why does the prospectus for Barclays iShares exchange-traded funds talk about a 5 per cent redemption fee? And why does Rogers take such a hands-off approach to customers when they report that their iPhone is stolen?

I also want to mention that QuickTax offers eight returns in each copy of desktop software. Last year, customers felt they were shortchanged and weren’t given clear disclosure on the package. Some blog readers have already commented on QuickTax 2008 here.

“Canadians told us they want more value and we’ve delivered,” said Gene Lewis, general manager of Intuit’s Canada tax division. How’s that for corporate spin?

So, here’s my question. When a company makes a mistake and drives away loyal customers, can it get them back later by restoring the status quo? Or will it lose them to rivals that offer the same or better value?

Calling all readers

Do you love reading? Do you want to join a book club, even if just for a few weeks? Then check out the biography book club I’m leading at the University of Toronto School of Continuing Studies, starting on Jan. 22.

Biographies are hot these days. So are autobiographies, which often make headlines for not being exactly true. Poor Oprah, taken in again by another faux memoir.

Barack Obama has written two autobiographies, which dominate the non-fiction bestseller lists. Another publishing phenomenon is Three Cups of Tea about a mountain climber turned do-gooder, building schools in a dangerous part of the world.

People love reading about other people, the famous and not so famous. It’s an opportunity to learn about history, politics, psychology and sociology through the prism of individual lives. A well-written biography or autobiography can make you turn the pages as quickly as if it were a novel.

Over four Thursday evenings, come share your love of reading with others who care about good books and inspirational life stories. See you there.

Quick turnaround on complaints in the new year

Maybe it’s because people are full of energy and New Year’s resolutions. Maybe it’s because they shop and travel more during the holidays.

But I’ve seen a surge of complaints and I’ve also seen a number of them resolved quickly.

Here are highlights of my recent efforts to right the wrongs that consumers face.

The value of financial advisers

You trust the people who help manage your investments. You think they have your best interests at heart at all times. You hope they can foresee a stock market meltdown and get you out before you lose a big chunk of your money.

Then, you go through a terrible year like 2008 and you find your portfolio is in tatters. What happened?

Since I’ve been writing a Sunday series of columns about financial advisers, I’ve been hearing from many readers in this position. The money is gone, the trust is gone, the respect for financial advisers as professionals is gone.

With the destruction of their hard-earned savings, they’re asking questions. Should I be in better shape than I am now? Is it time to look for another adviser? Is it time to manage my own money?

Finally, they ask: Why did my adviser continue to maintain a buy-and-hold strategy as the markets melted down? Didn’t they listen and write down what I said about not being able to handle big losses, given my age and stage of life, my past experience, my future goals? Why didn’t they sell all my investments and put the money into GICs?

I am posting some anguished comments from readers and some replies from independent observers about their cases. Please add your opinions to this discussion.