Companies getting tough on collecting overdue bills

Many people have asked me about Bell Canada’s new late payment fee — 3 per cent a month or 42.58 per cent a year compounded.

As Bell says here, the regulated part of your bill is subject to a much lower fee of 1.25 per cent a month or 16.07 per cent a year.

I guess the CRTC, which regulates an increasingly smaller share of Bell services, would never allow a 3 per cent monthly fee.

In September 2008, Bell lost a class action lawsuit initiated by Ottawa customer Peter DeWolf, challenging its imposition of a $25 monthly fee on overdue satellite TV accounts. The Ontario Court of Appeal supported Bell a year later, saying the $25 administrative fee was a legitimate charge.

Now Bell is trying another way to make customers pay more when they’re late. But what bothers me is Bell’s high error rate. How many people refuse to pay some or all of their bills because the charges are just plain wrong?

Rogers also makes errors, as you can see from Dawn’s story below. Her life was turned upside down by fighting off a collection agency hired by Rogers to collect bills she didn’t actually owe.

Fitness clubs use collection agencies to bludgeon you into paying overdue bills. Door-to-door energy sellers do it as well. They know you don’t want to get a black mark on your credit rating.

Many people will pay charges they don’t think are legitimate just to get rid of the bill collectors.

There’s a fundamental inequality here. Consumers have to fight back against billing errors with their own time and money, as interest charges add up and collection agencies are called in. They sacrifice a lot to keep going.

Meanwhile, companies can enforce their payment threats through legal means — and write off their costs.

Sure, some people don’t pay their bills routinely and raise costs for others. But my concern is for those who have real grievances and can’t see them through to the end because of usurious interest charges and heavy-handed collection efforts.

MBNA hiking minimum payments on low-rate card

In 2008, Rebecca took out an MBNA credit card with a low rate of 1.99 per cent. She was told the rate would never go up as long as she paid the minimum due each month.

She continues to pay promptly. But she doubts she can do so in the future because of a change in the way MBNA calculates the minimum payments.

The result is that she’ll have to pay $474 a month, compared to $79 now, to keep her account in good standing. She thinks this is unconscionable.

Rebecca wants to wait a few months until she sells the house she has just renovated. (The $41,000 debt on the card stemmed from these repairs.) She’s worried that if she makes any late payments, MBNA can yank up her rate to 20 per cent or more.

Her story shows the risk of depending on low-rate credit card offers to last indefinitely when the card issuer can change other key terms and conditions.

I’ve posted her letters and MBNA’s response below. What do you think?

That $2.80 touch tone charge on Bell bills

Why do Bell customers pay $2.80 a month for touch tone service? Rotary phones are still around, but you can’t get a rotary phone hooked up in a new installation.

Last week, the CRTC ordered Bell to reimburse a select group of customers who weren’t supposed to be charged for touch tone service. The refund mechanism needs work, alas. But the decision is welcome.

Andrew Cyr was promised he’d never be charged for touch tone. Bell did grandfather him for many years, but arbitrarily added the charge last year (maybe thinking he wouldn’t notice). See his story below.

The Public Interest Advocacy Centre has details of the CRTC decision here. If you’re owed a refund, make sure to put in your claim.

How companies respond to complaints

When customers take the time to complain about quality or safety problems, they deserve thanks and serious consideration. Companies pay handsomely for the kind of research that dissatisfied customers provide for free.

But some people just get a brush-off because they can’t reach corporate managers who take such input seriously. And even if they do, the’re given vague assurances about having their complaints reviewed.

You’ll find a few examples of disappointing treatment below, starting with a father whose child was injured on a ride at Canada’s Wonderland and wanted to know why there wasn’t a first aid centre close at hand.

Confusion arises when warranties overlap

Many stores offer extended warranties for the products they sell. You may assume that the retailer’s extended warranty kicks in after the manufacturer’s warranty is over.

Not so fast. Your extended warranty can overlap the manufacturer’s warranty for the first year or two.

Why would retailers stack two warranties on top of each other? And why don’t they make it crystal clear when they do that?

See Mark’s lament below about a treadmill he bought from Fitness One, hoping to be protected against damage for five years. But when the treadmill needs repairs, he learned that the retailer’s coverage lasted a year less than he thought it would.

Yes, the retailer’s warranty may be more generous than the manufacturer’s warranty. For example, it may let you drop off defective products at the store, instead of packaging them at your expense and sending them by mail to the manufacturer.

However, I believe that retailers must make customers aware of the overlapping. This means posting written warnings on paperwork and making sure that staff gives verbal warnings as well. Misunderstandings can be costly.

Widow waits 11 months for life insurance to be paid

If I ever doubted the power of the press, I had to be impressed by how quickly Empire Life reacted when I asked about Liudmila Corovcova’s claim. An 11-month wait for payment ended within a day.

Her husband, Sergei Corobcov, was killed while riding a scooter on a family holiday in Ukraine last June. The drunk driver who was responsible went to jail last February.

But Empire Life kept asking for paperwork to prove Sergei was legally dead. Its investigation dragged on.

I got a call this week from a life insurance broker, Sonia Gorchakova, who knew the widow and wanted to speed things up. The long delay had left the widow and her two sons in desperate financial straits, unable to return to Canada.

Sonia translated Liudmila’s plaintive letter (posted below) from Russian into English.

Talk about a quick turnaround. On Thursday, May 13, at 3.50 p.m., I got this email from Empire Life’s spokeswoman Laurie Swinton:

Hi Ellen. In response to your enquiry, since this case is still under review and no decision has been made yet, it would be inappropriate for us to provide a comment. Thanks.

On Friday, May 14, at 4.46 p.m., Corovcova’s lawyer got this response from Empire Life’s manager of individual claims Bev Rose:

We are pleased to advise that we have now completed our review of Mrs. Corobcov’s claim and are proceeding with settlement.

Sonia sent me an email late Friday afternoon: “It works! Thank you.”

Horror stories I heard this week

I love my job because of all the feedback I get from readers. This blog extends my readership across the country.

Just when I think I’ve heard everything, someone sends me another horror story that stretches my incredulity.

Want to hear about major billing errors? Check the stories below from customers of President’s Choice Financial and Rogers.

What it’s like to work for a company that abuses its customers? Check the story below from a former Bloomex employee.

What if you need a loan and you’re rejected because of problems with your credit rating, caused by a credit bureau’s errors? Check the story below from someone who’s frustrated with Equifax.

Finally, there’s Summitt Energy, my new best friend. I must get daily horror stories about how this energy marketer operates. Now it’s into replacing water heaters. See a customer’s lament posted below.

Your right to a refund, credit or exchange

Can you get your money back if you’re unhappy with a purchase you made at a store?

If not a refund, can you get a credit or an exchange?

Seems like many retailers are cutting back on these rights and not disclosing to customers what their policies are.

Even the big chain stores are less eager to give refunds than they once were. See what Lisa, a reader, has to say:

I have always bought from major department stores like The Bay and Sears with full confidence. So imagine my surprise when my mother inadvertently discovered that Sears neither refunds nor exchanges clearance items.

While the policy is written in small print on the back of sales receipts, it is not displayed in-store and it is not mentioned by sales people at the time of purchase.

By all means, stores have the right to set whatever policy they want, just as consumers have the right to choose where to spend their money.

But whatever the policy, it should be prominently displayed and/or discussed at the time of purchase so that consumers can make informed choices.

In my experience, stores are tightening up on returns and not giving enough information. They need to work on disclosure.

Meanwhile, customers have to ask about refunds, exchanges and credits. Another issue: Are there time limits?

Check the stories below to see how customers can get into trouble when they don’t ask and retailers don’t tell.

Complaints about tax collectors and tax software

The 2009 tax return is done. Now you’re waiting for a refund. But for some people, that refund takes a long time to come.

I did a column last week about someone who had waited more than a year for his refund. He claimed an investment loss of $75,000, which he wanted to use as a down payment on a house.

His file went nowhere until he called in the ombudsman for taxpayer rights, who can urge (but not order) the Canada Revenue Agency to treat people better and communicate with them in language they can understand.

Larry MacDonald also highlighted the taxpayers’ ombudsman last week in his Canadian Business blog.

In response to my column, I heard from someone who had waited four years for a refund. Holey moley. The CRA sure does work slowly in some cases.

Tax software isn’t a big issue any more, but I still get a few complaints. I’m posting an exchange below from a woman who expected more than QuickTax was prepared to offer and had to sort things out with an Indian call centre, at her own expense.

Once that refund arrives (if you’re lucky enough to get one), you don’t have to think about income tax for another year. Unless you’re self-employed, of course, which means you’re forced to focus on tax all year round.