What makes me happy

Taking a short break, which I’m going to do now.

Fulfilling my personal blog challenge to write more often. Not quite every two days, but pretty close.

Reading a book called The Happiness Project, which came out of a blog.

Being a “satisficer” and not a “maximizer” (see this Gretchen Rubin blog post).

Breaking down barriers to help customers get heard in corporate Canada.

See you in March.

What makes me angry

There are so many things. Where to begin?

— Companies that make recurring billing errors. Instead of straightening out the mess, they crack down on customers who don’t pay.

— Investment professionals who push risky portfolios on clients, based on false information on their account application forms. Later, they deny blame when the client complains about unsuitable investment recommendations.

— Lawyers who try to collect money by harassing someone with the same name as the person they’re chasing.

You want to get angry too? Just read the stories posted here.

Little things mean a lot

I often hear from people who are owed thousands of dollars because of corporate errors and malfeasance. But I’ve come to conclude that the dollar value of a complaint isn’t as big a deal as the principle involved.

Those with just a small amount of money at stake can be equally, if not more, outraged at how they’re treated. They can become frustrated — to the point of obsession — when companies ignore them. And a corporate failure to communicate drives customers to the media.

Companies have to listen and respond to ordinary people without fobbing them off on third-party call centres. Otherwise, they will continue to get a bad rap for service, which can damage their reputations and their share prices.

Here are a few laments that came my way today, including a Tim Hortons story that took just a few hours to resolve.

The sad fate of labour-sponsored funds

Remember when all you heard from investment salespeople during the RRSP season was about the 30 per cent tax credits available on a labour-sponsored fund?

Sometimes, they added the RRSP deduction and showed how 75 to 80 per cent of your contribution was subsidized.

Sounded like a great deal, right? But did they also mention the sky high management fees or the fact that a portfolio of emerging businesses might prove to be highly illiquid in an economic downturn?

Unless you held the fund for eight years, you had to repay the tax credits. But just as cash-in time was getting close, many funds suspended redemptions and moved to annual distributions. This meant an even longer wait to retrieve your money, assuming you had much left.

What I find galling is that the high management fees continue to accrue, even though you’re stuck in the fund and can’t exit. That’s another thing your salesperson probably didn’t tell you.

I spoke to investment author Gordon Pape, who owns a bunch of labour-sponsored funds and didn’t see it coming. Neither did I when I bought the Vengrowth II fund, which I wrote about this week.

My column elicited lots of response from readers, some of whom asked if they could join a class action lawsuit against the fund managers.

Telecom ombudsman upholds Bell’s verbal contract

I think contracts should be written and signed by both parties. A verbal contract is unfair — especially if the consumer is not aware that it exists.

Suppose you’re speaking to Bell Canada and you’re offered a discount. You say OK, but don’t ask any questions. You have no idea you’ve entered into an informal contract.

Some time later, you switch your business to another firm. Bell makes you repay all your monthly discounts, going back to when you received them, in your final bill.

Since you didn’t know you had a contract, you didn’t know when it expired. And if you did know the expiry date, you could have delayed your switch for a few months.

I wrote about this issue here a few months ago, but now I have an update. Daryl Charanduk, whose comment appears in the earlier post, appealed Bell’s decision to the Commissioner for Complaints for Telecommunications Services (CCTS).

CCTS upheld Bell’s verbal contract, based on the information given by both sides. Check out its decision posted below.

As for Charanduk, he’s still unhappy with Bell. But he’s happy he switched. Now he’s paying much less than he did with Bell, even after receiving the fictitious discount that was later clawed back.

Beware of damage charges when renting a car

Tonight, the CBC news ran a piece about a common consumer con. You return your rented car in the same condition you received it and later find a damage charge added to your credit card bill.

With the upcoming Vancouver Olympics, the rental car scam may be easier to pull off.

In the story, a businessman was told that Budget had to replace his rented Kia’s windshield at a cost of $1,100, when there was a tiny chip that would cost $25 to $30 to fill in. He cancelled his credit card to avoid having the charge put through on it.

What else can you do to protect yourself? Don’t buy the expensive collision damage waiver (CDW) from the rental company. Find out how much coverage you have from your own car insurance policy and your credit card company.

Also, take your own pictures of the rental car if you drop it off at remote locations or after hours.

The story resonated with me because I was in a fender bender accident a week ago and I’ve just rented a car from Enterprise (a nice feature of my policy). The clerk made a pitch for the CDW coverage so I wouldn’t have to involve my own insurance company. I said I’d take my chances.

The Enterprise office, located next to the body shop I went to, probably has some success with that argument. When your insurance company is already paying for one claim, why tempt fate by risking another damage claim with a rented car?

Bravo to the CBC for exposing the way car rental firms can abuse customers who haven’t bought their expensive coverage against scratches and chips.

Which money books are worth the money?

I love checking out personal finance books and I’m glad to see a big choice of publications for Canadian readers. There are still too many American financial authors populating the bookstore shelves.

As soon as you see terms like 401(k), Roth IRAs and tax-free municipal bonds, put down the book. It’s probably irrelevant to you.

So, what’s new? The big hit is Gail Vaz-Oxlade’s Debt-Free Forever, which is in the top 10 bestsellers at Amazon.ca. As the host of Til Debt Do Us Part, a long-running reality TV show, she’s known for her blunt way of scolding the clueless couples she tries to reform.

She writes the same way she talks — plain, direct, colloquial, often personal. And while her advice is nothing you haven’t heard before — liive within your means, cut spending, avoid debt and repay what you owe — she has lots of practical suggestions and tips for staying solvent.

In Chapter 6, Make More Money, Gail reveals a truth many can’t face. If you’re not making ends meet and you’ve trimmed your expenses to the bone, you have to “bust your butt” and earn more. Whether you get a better job, a second job or a third job, you’ve got to do whatever it takes, she says. It’ll seem like a life of hell for a while, but you’ll get used to it and it won’t be forever.

On her TV show, I remember her ordering a stay-at-home mother to find work cleaning apartments in her building. Tough talk, but some people need a shake-up.

Another new book appealing to an audience of overspenders is The Smart Cookies guide for couples. But it’s blander, reflecting the fact it has six authors. The new Chatelaine guide is aimed at women only.

Last book I want to mention is Rob Carrick’s guide to the good, bad and awful in Canadian investments. It’s a series of lists, easy to scan and dip into, but does require some background knowledge. It’s for do-it-yourself investors and those frustrated with their investment advisers.

Since I do lots of teaching, I’m often asked about books to read. Often I come up short and recommend websites instead, like the redesigned Get Smarter about Money. I wish I could find a single investment book that covered all these topics in such a simple Q&A style.

If you don’t want to buy any books before sampling the advice, check out Gail’s website and the Gail Clubs popping up in many cities. And check out Rob Carrick’s book excerpt, Six Crummy Mutual Funds and his annual online broker rankings.

Let’s stop the madness

I’m angry. Believe me, it takes a lot to make me angry. If I flew off the handle all day, I’d never last in this job.

What makes me furious is seeing people pay too much for energy at home and at business because of deceptive marketing. This racket has been allowed to go on for more than a decade.

Ontario has introduced a bill to curb energy sellers last December, which will take many months to pass into law. What about all the victims who are still being roped in?

Today, I got a bunch of new complaints, which I’ll post below.

— One marketer is tricking people to enrol in long-term contracts by sending them cheques in the mail. If they cash them, they’re in.

— One marketer signed up a person who had passed away a few months earlier. His executor had a hard time getting the contract cancelled.

— One marketer signed up a newcomer to Canada to a carbon offset plan, costing about $150 a year and delivering nothing but the dubious benefit of a clear conscience.

Why, oh why, is this allowed to go on? When will it stop?

Has anything changed for investors?

I’m doing a Sunday series in the Star on investor protection. And I’m asking whether Canadians will ever get stronger laws to save them from unscrupulous sellers of investments.

Choosing my words carefully here, I’m avoiding the word “adviser.” Investor advocates argue that industry participants are licensed to sell specific types of investments or investment services, but not to give advice.

Advice-giving is not regulated in Canada. And while Quebec regulates financial planning, the only province to do so, it couldn’t head off the Earl Jones scandal. (Jones, a Montreal money manager who ran a Ponzi scheme and ended up in jail, stayed aloof from all efforts to control him.)

Check out what the Quebec Institute of Financial Planning says here:

“We want a professional corporation to be created in order to better protect the public – the status quo is no longer satisfactory,” said Jocelyne Houle-LeSarge, the executive director of the Quebec Institute of Financial Planning (QIFP), the only organization in Quebec authorized to grant financial planning diplomas, and to establish rules concerning the ongoing professional development of professional financial planners.

Houle-LeSarge, who chaired the Quebec Order of Certified General Accountants in 1999-2000, says a professional corporation of financial planners would have limited the losses suffered by the alleged victims of Jones, even though he described himself as a financial advisor, and not a financial planner.

“Now anybody can describe themselves as a financial planner,” noted Houle-LeSarge. “But when there is a radar trap on the highway, everybody slows down. The same with a professional corporation. It wouldn’t be long before a professional corporation of financial planners would seek to prosecute individuals” who plied the trade “illegally.”

I agree 100 per cent with Houle-LeSarge’s later comment that the overall regulatory regime is “all over the place” and engenders a lot of confusion.

If you’re concerned about the advice you receive, you don’t know where to go with your complaints. Not only are there too many securities/financial regulators, self-regulatory bodies and ombudsman services in Canada, they tend to have close ties with the industries they govern or from which they derive their funding.

You may not get a serious settlement unless you hire a lawyer, an experienced litigator working with investor plaintiffs. And that means paying serious money up-front in retainer fees.

Do you think a national securities regulator will improve investor protection in Canada? Will the government pay heed to the expert panel on securities regulation, which called for improved complaint-handling and redress mechanisms and giving a stronger voice to investors?

Without a dedicated investor issues group, I doubt that regulation will ever get better. As the panel said:

Securities commissions in Canada provide fewer opportunities for investor advocacy and engagement than other key capital markets jurisdictions.

This is to the detriment of securities regulation in Canada and diminishes public confidence in regulatory accountability, integrity, and efficiency.