Mortgage paid off? Ask for home insurance discount

Home insurance companies offer discounts for a bunch of reasons. Here’s an article I found that mentions 15 ways to save, but omits one key fact.

If you own your home free and clear, you can save on home insurance. Canadian Capitalist noted this in a recent post.

Take If Shari, a reader who paid off his mortgage in 2004. He wanted his insurer to pay back all the foregone discounts.

We have been insuring our home and two cars with Aviva for many years, paying several thousands dollars each year.

Just yesterday, I have discovered that they allow a discount on home insurance if you are mortgage free. The amount is quite significant at $80 for just this year.

Aviva never notified us of the existence of such discount. If we had been aware, we would have definitely advised them earlier.

I told him that I doubted he would be reimbursed for six years, but he wanted me to try. So, I contacted the company complaints officer, whose number I found through the Financial Services Commission of Ontario.

Guess what? He got a positive response the same day.

Ellen, it worked! Someone called to say she will be giving me a refund of all the past years’ overpayment. Thanks to you! Ellen, you don’t know your own power!

Glenm Cooper, the media contact at Aviva, said my interest helped speed up the refund. But it would have come anyway because the customer had attached a letter from the bank, testifying to his mortgage-free status since 2004.

So, ask your insurer about mortgage-free discounts. I called mine (TD) and found it offered one, though this discount didn’t make the list at its website.

I’m still waiting to hear why the insurance companies think there’s less risk once the mortgage is paid off. Maybe readers can explain it.

News flash: I’m giving my evening course at University of Toronto, Investing for Beginners, starting Thursday, Sept. 16. Here’s a link for information and registration.

Canadians have world’s longest mobile phone contracts

A new report by the SeaBoard Group, called Death Grip, says Canada’s wireless phone companies bind customers to overly long contracts. As a result, the penalties we’re paying are “downright draconian.”

The cost to cancel your iPhone 4 contract after six months is $256 with AT&T in the United States. Compare that to Canada’s big three — $500 with Rogers, $600 with Bell and $680 with Telus.

In Canada, the most popular contract length is 36 months. This is twice the length of a typical British postpaid contract (18 months) and one-third longer tha a typical U.S. wireless service contract (24 months). The longer the contract is to begin with, the larger the penalty for breaking it will be.

Quebec has passed a new law that says the penalty for breaking a contract can’t exceed the value of the subsidy given on a new phone — and must go down every year.

SeaBoard says the new entrants (Wind, Public Mobile and Mobilicity) can’t compete because the spectrum they’re using isn’t yet supported by the hottest of the smartphones.

You cannot get an iPhone that works on the AWS spectrum –at least, not today. So, if you are in the market for a smartphone in Canada and elect to get a subsidized phone rather than pay Apple the full $779 (32GB), your only option is a three-year contract from Bell, Rogers or Telus.

And, given that it is your only option, well, one can appreciate that the incumbents are loath to break ranks and give up the three-year handcuffs. So, without the smartest of smartphones driving competition, inertia prevails.

This 32-page report is written in techie talk, so if you find it a slog, just go to the chart on page 17. It shows the iPhone 4 cost over the lifetime of a contract in Canada is $3,689, compared to $2,396 in the U.S. and $1,598 in the U.K.

Shrink the contract terms and make the subsidies more transparent, SeaBoard advises wireless carriers. Otherwise, consumer anger will invite more regulation.

Carry on, though, with the contractual death grips in place at present and you will simply be inviting the government’s “help” to sort it out.

The choice is clear, but be careful: act soon, or the Future may well not be Friendly.

Company = bad, customer = good

Geoff, a reader, came up with this slogan in a comment yesterday on truth in labelling.

So, let me tell you, Geoff, and other readers too, that I don’t think all companies are bad and all customers are good.

The problem is that companies have too much power to bamboozle customers. If they can get away with it, they’ll do it.

In their promotion and advertising, companies only tell one side of the story. Any negative stuff that customers need to know is omitted or buried in the fine print.

Misleading advertising is rarely prohibited unless rivals complain about each other (that’s why Rogers now says “Canada’s reliable network” instead of “Canada’s most reliable network”).

Class action lawsuits are effective in stopping misleading advertising. But they’re hard to organize, so we don’t see them with great frequency in Canada.

This leaves a vacuum that companies can fill.

They can say what they want to attract you and then make it impossible for you to understand what you’re agreeing to.

They can avoid the use of plain language in their terms and conditions, deliberately making them difficult to read.

They can make you sign long-term contracts with high cancellation fees, inserting clauses that allow them to change the terms and conditions without penalty.

They can outsource their customer service departments and supply you with little in the way of help, support or advice, all in the name of efficiency and cost-cutting.

That’s why I’m standing up for the majority of customers who keep companies in business and want to see fair dealing.

I’m trying to give power to customers, instead of letting big business control all the plays.

Through the Internet and the Toronto Star, I can restore some balance to the lopsided relationship between companies and their customers.

And in my view, that’s a good thing.

Where’s the truth in labelling?

I often take guided tours in places where I’ve never been. It’s annoying when you’re taken to a souvenir store and forced to wait for everyone in your group to finish shopping.

It’s an unspoken truth that tour guides get a commission on everything sold in shops where they direct customers. But the truth is getting out. I saw a sign in a market warning that guides earned 30 to 35 per cent of the price paid in some stores. “Shop on your own,” it said.

How would truth in labelling work for companies I write about in this blog? Let’s think about what Enbridge, for example, would say about its budget billing plan.

* We can set your monthly instalment payments too low and send you a large bill after almost a year has passed, without doing any mid-term reviews.

* We can charge you 1.5 per cent a month in late fees if you can’t pay this large bill within a few weeks, even though we made the error.

* We can ask you to call us if you’re in financial difficulty, but we can make it hard for you to reach our call centres.

* We can sign you up for this budget billing plan automatically if you’re a new customer without giving you a choice.

* We urge you to check the budget billing plan data each month, knowing that we can make large errors, and to ask for an increase in your instalment payments if you haven’t been billed enough.

If such messages were in bold print, in large type, on all monthly statements, I’d agree that Enbridge customers were truly warned about the billing problems they could face.

Aeroplan also needs to beef up its truth in labelling. I’d like to see warnings everywhere that your points will be zapped in one year unless you stay active and that buying anything at a partner retailer (such as Esso) will ensure you won’t lose your points.

Any other examples of proper disclosure that readers want to share would be welcome.

Barb’s story: Scammed on Paul McCartney tickets

You’re dying to go to Paul McCartney’s concert in Toronto on Aug. 8 and 9, but the seats you want are sold out. So you try the resale market for tickets.

You find an ad on Craigslist for four tickets at $150 each. That’s a great price, you think. The seller is a flight attendant for British Air, who had a last-minute schedule change and can’t get to the concert after all.

You check her out and decide to go ahead. But the tickets never arrive in Canada, even though you’re given a tracking number with the British Royal Mail.

Barb’s story, which you can read below, shows how easy it is to get swindled by a stranger with a good story. In future, Barb says, she’ll heed the Craigslist warnings to deal only with sellers she can talk to on the phone and meet in person.

Carol also told me about her elderly dad, who took his new iPhone on an overseas trip. He needed help with his reception problems, but didn’t realize the device’s roaming feature had been turned on. Of course, he faced a big bill later, which I was able to get reduced.

Travelling with smart phones can be expensive, as Carol’s story shows. I’d welcome advice from readers on how to cut costs, such as unlocking the phone and buying a SIM card in the country you’re visiting.

I covered this topic a few years ago, but I’m wondering if things have changed.

Fridges, stoves and vacuum cleaners

It’s a hot summer, so why not write about expensive new fridges that don’t work?

After I did so, I heard from other readers whose kitchen appliances were on the fritz and whose patience was wilting fast.

As usual, Sears’ name came up. This once mighty department store has a new philosophy: Satisfaction is not guaranteed, nor is your money refunded.

Readers wanted to know why some major appliances were lacking in durability and built not to last. Was this a plot to sell more extended warranties? And why did retailers wash their hands of products they sold after the first year?

Vacuum cleaners, luckily, are not designed for built-in obsolescence. But a new model, Airider, caught the attention of a Star freelancer, Vicky Sanderson, who wrote a positive story this year.

Unfortunately, the company behind the Airider, based in Barrie, Ont., has been unable to fulfill orders quickly or give money back to customers. The owners keep promising refunds, but don’t deliver. So, I figured it was time to air this story, so to speak.

This is not a fly-by-night company nor a scam, says vice-president Phil Wright. But what do you call a firm that cashes cheques from customers and gives nothing in return?

You can read more from Wright and his frustrated clients below.