Advice my readers want to share

My readers often get into trouble dealing with transactions that are unfamiliar to them. Later, they’re keen to save others from making the same mistakes.

Sue and her husband checked their credit scores at Equifax, but didn’t find them as high as expected. They learned that if you cancel a credit card, make sure to let the credit bureaus know.

Gord paid off his mortgage as quickly as he could, but was hit with a big penalty. He now knows there’s an annual limit on what you can prepay and you don’t get a warning when you go over the limit.

Stan opened a margin account to trade stocks, but paid more interest than anticipated. He discovered that if you hold Canadian and U.S. stocks in the same account, the margin is kept completely separate.

Things are more complex than they used to be. So, read the tips from Sue, Gord and Stan below and thank them for trying to help you avoid costly errors.

Bell wants me back

I switched to Rogers home phone on April 20. Bell called on April 26 — yes, less than a week later — asking me to return.

The telemarketer called during dinner and ignored hints it was a bad time to talk. He asked what it would take to win me back.

I said, “If you made this call before I left, I might have listened and might have stayed. It’s too late now.”

I switched because I could save a lot of money consolidating with Rogers. An added perk: When our phone rings, we can see the caller’s name on our TV screen. That’s cool.

Bell hates to lose customers and calls non-stop to win them back. This also happened when we switched our long-distance to Yak. Another benefit of going to Rogers: Long-distance minutes are included.

Bell has a sales culture gone wild. It puts its interests ahead of your interests. It doesn’t understand customer service, despite endless talk about improving it.

Some companies are making progress. Best Buy gives refunds on a product (a Sony game card) that was previously non-refundable. Canadian Tire wants to fix its refund policy too.

See the stories below and be thankful for firms that want to beef up customer service and not just pay lip service to it.

Three questions for Fido

Jeff Green has an unlimited City Fido account, a great rate plan introduced before Fido was acquired by Rogers. He’s asking why customer service has gone downhill and whether he’s being treated badly because he’s unprofitable.

His fight with Fido is about three issues:

— If a phone breaks while under warranty, Fido will get it repaired. But if the same problem pops up post-warranty, who does Fido insist he deal with the manufacturer?

— If Fido has a policy of recording all calls from customers, why can’t customers record calls from Fido?

— If Fido suspends service and charges a fee to get it back, why isn’t it up front with customers about this restoration fee?

He’s not getting the answers he wants. And though I tried to help him escalate his complaint at Rogers, he’s not much further ahead.

So, I leave these questions with readers. Read the details below and give your opinion about the rights and wrongs in this case.

A week in the life

I promised to update my blog more often, but life is getting busier again.

On Monday, I appeared before the task force on financial literacy in Toronto. The chair, Donald Stewart, blogged about it here and tweeted here.

On Tuesday night, there was a monthly meeting of Ellen’s Investment Club, which I wrote about here last year. We talked about favourite retail stocks and about options trading, something only two members were doing and the rest of us wanted to try.

On Wednesday night, I taught my continuing education class, The Facts of Life about Your Finances, at the University of Toronto. In this third meeting of a six-week course, the topic was the value of a principal residence, a hot topic in an overheated housing market.

Tonight, I was elected to a new board, Community Legal Education Ontario, which does great work in helping low-income people understand their legal rights.

Also this week, a Rogers technician came to my house to install home phone service. Yes, I’m no longer a Bell customer.

I couldn’t ignore the compelling savings on the phone package (which included long-distance), plus the restoration of the 15 per cent bundle discount we lost a year ago because we didn’t have four Rogers services. The switch went smoothly, which was a relief since I hear so many horror stories.

Lest I sound too complimentary, I have to say that calling Rogers last night was no picnic. My son wanted to know how to get a 10 per cent discount on Blue Jays baseball tickets, a perk of our VIP Ultimate package. He waited on hold and was transferred. Then, he handed me the phone, so I waited on hold and was transferred. No one knew anything.

Finally, a Rogers rep said, “where did you hear about this discount?” We said at your website, a fact that should be part of their training.

No wonder the crowds are so small at Blue Jays games.

Frugal is fashionable

I’m finding lots of new books with tips on how to save money. They’re bringing back economic wisdom learned during the Depression, but adding a modern touch.

Here are three authors whose advice I found relevant and often compelling.

Marjorie Harris, known for gardening tips, expands to fashion, food, home and travel in Thrifty: Living the Frugal Life with Style. I like how she distinguishes thrifty from cheap:

Cheap is someone who buys based only on price, whose life experiences are guided by price, and who would probably give up something sublime because it costs too much.

The rules of thrift aren’t meant to develop a stingy quality; indeed, it should bring on a feeling of well-being, rather than deprivation.

Being thrifty requires a brain; being cheap doesn’t. Being thrifty is figuring out how things work and making them work more efficiently. Being thrifty means being self-aware.

Marjorie has famous friends with ideas to share. Margaret Atwood, for example, tells you to freeze your clothes for three days, unfreeze them and then freeze them again to kill moth larvae. Then, dry your clothes to avoid mildew and store them in an airtight metal trunk with cedar lining. If the air can’t get in, the moths can’t live.

Adria Vasil, author of the Ecoholic Green Guide, which I wrote about in this blog, has a sequel, Ecoholic Home, which promises the greenest, cleanest and most energy-efficient information under one (Canadian) roof. It packs a punch in its concern for the planet and for your pocketbook.

In her section on appliances, repair or replace — always a vexing question — she recommends getting rid of top-loading washing machines, fridges from another millennium, dishwashers without a blue and white Energy Star logo and air conditioners that have kept you cool for more than 10 summers.

You can hold on to your clothes dryer, since technology hasn’t changed that much, and your stove will last you 18 years on average. “If it’s got convection and self-cleaning features, I’d stick with it till it croaks,” says the NOW magazine columnist.

Bitches on a Budget is a book aimed at younger women, rich with contemporary sass and online tools. Author Rosalyn Hoffman, former department store buyer in New York, is plugged into the fashion scene and loves Target. (When, oh when, is this style-conscious, thrifty retailer going to open in Canada?)

I liked her section called XXX, mature audiences only, where she talks about a dirty little secret, but only for mature women, those in control of their emotions and their finances; women who live within their means and their budgets; women who pay their bills to the penny every month, no financing charges.

We put everything — yes, we mean everything — on one single airline-linked credit card. Food, shopping, gasoline, meals, flying, bus and train tickets, clothing purchases, condoms. Hell, we even bought a car once and put it on the card.

We hoard miles. And then we use them for huge, big, expensive, unaffordable business-class tickets to faraway, exotic destinations. Places like New Zealand, China and South Africa. Stop in Calgary and Hong Kong on the way to Auckland. Return from Beijing via Honolulu and L.A.

Her advice? It may pay to spend cash on trips shorter than six hours; you can manage in the cattle part of the plane for that long. But use your miles for any trip at least 12 hours (or at least use them to upgrade). As a bonus on those long hauls, you’ll have the flexibility to make stops along the way. Save those miles and splurge.

Living on less and loving it

Is there a phony retirement crisis in Canada? I often hear that people aren’t saving enough for retirement. But when I speak to retirees, I get a different story.

I did a column saying that living on half of what you earned before may not hurt, if you go into retirement with your mortgage and other loans paid off.

Readers agreed wholeheartedly. Many also agreed that financial institutions like to exaggerate the amount you need to save for retirement and suggest you need 70 to 80 per cent of your previous income to live comfortably.

But these firms have a conflict of interest when it comes to advice about reducing debt. They earn almost nothing from from accelerated mortgage paydown, compared to the management fees on sales of mutual funds and packaged investment portfolios.

Retirement is a hot topic these days. Many people are already there or getting close, wondering if they can leave early. They feel reassured to hear they may have saved enough, even if the investment industry says no.

Insurers turn nasty if you ask questions

You call a home insurance company to ask a question. Perhaps you’re thinking about making a claim, but you don’t know if it’s worth making a claim. Later, you decide not to go ahead.

Guess what? Your home insurance rates go up the next time you renew, just because of your inquiry. Who cares that you didn’t make a claim? The fact you asked was enough to raise your premiums.

Asking questions can lead an insurance company to cancel your policy. Or if you don’t have a relationship yet, it may reject you based on what you say. Read TB’s story below about Bel-Air deciding not to take her business after she asked about fixing up her new home before moving into it.

Meanwhile, home insurance companies are asking you more questions. In particular, some now ask permission to check your credit score. You’re free to say no, but this means you’ll be treated as if you had a low credit score and your rates will go up.

CBC Marketplace ran a story about home insurance and credit scores last night.

It also did a segment on Bloomex, using Terrie’s story from my blog (Feb. 17, 2010). Hey, Marketplace, I often give you credit. Why didn’t you return the favour after I helped you with your Bloomex story?

Finally, I have a tale of a couple who qualified for a home insurance discount because they lived close to a fire station. Their insurer, Coseco, refused to give them the discount because they hadn’t asked the right questions. They appealed to the consumer complaints officer and got some money back, but not what they felt they deserved.

Home insurance is unregulated, unlike car insurance (where insurers are barred from using credit scores to set rates). Maybe it’s time the provinces stepped in and imposed more discipline on home insurance.

After all, if your home is not insured, you can’t get a mortgage. And if you’re dropped by your insurer, you may find you’re blackballed. No other companies will take your business either.

But can you cash in your investment?

Although interest rates are close to zero, you can still earn higher returns on higher-risk interest investments. Recently, I did a column about Romspen Mortgage Investment Fund, which says at its website that it has generated consistent returns of about 10 per cent a year.

The fund invests in commercial mortgages that banks don’t generally handle. It’s open only to accredited investors and doesn’t have to issue a prospectus, as mutual funds do. There’s no market for the units, since they’re not listed on a stock exchange.

But I didn’t realize how the lack of liquidity played out in the months following the 2008 stock market crash. A financial adviser told me that his client had tried to redeem units and couldn’t because everyone else wanted to do the same thing. That made me press company spokesman Wes Roitman for more details — and he happily obliged.

You can read the questions below from Ken Hawkins, the adviser, and Romspen’s response. It’s clear that the double-digit returns on a private mortgage fund may cost you dearly if you expect ease of cashability in an emergency.

Rats on a plane and other scary stories

Air Canada isn’t known for great customer service, but this is one of the strangest complaints I’ve seen (below). A passenger flying from Toronto to Heathrow saw a rat running overhead in a ceiling crevice. Not pleased with the airline’s half-hearted apology, she’s taking her business to WestJet.

Have any others seen rodents on board? They’re a common feature of Toronto restaurant kitchens, as the city’s food safety tests have shown.

Here’s news. I hope to make a presentation at public hearings for the federal task force on financial literacy, which is coming to Toronto on April 19.

I’m still figuring out what I want to say, beyond what I said here when the task force membership was announced. But I do want to focus on being a smart consumer. I agree with author David Bach, when he says:

Never before have corporations been so successful in taking us financially without our really realizing it.

The task force’s consultation document talks about protecting against fraud, but that’s just part of the story. What about all the unfair practices you see in your everyday dealings with large corporations?

Unless you complain and fight back, you will spend more money than you need to and have less left over for yourself. Just read this blog to see how often people are separated from their savings by legitimate companies, paragons of Canadian business, not fly-by-night fraudsters.

Finally, I have a new course at the University of Toronto’s continuing studies, The Facts of Life about Your Finances. It’s six evenings, 12 hours, starting next week.