Why I’m always writing about water heaters

November 29 2012 by Ellen Roseman

I can’t seem to stop writing about the nasty tricks played by water heater salespeople. Just when I think there’s nothing new to say, I learn about another outrage.

An older couple, Sandra and Daryl, wrote to me about their experience with Ontario Consumers Home Services (OCHS), a company I wrote about last week in the Star. Along with renting a water heater, they ended up agreeing to a new furnace, too.

OCHS likes to install the rented equipment right away, rather than waiting until Ontario’s 10-day cooling off period end. People might change their minds after 10 days, the company’s chief executive Vitali Godonooga told me.

What if people change their minds during the cooling off period, but after the rented equipment is installed? When Sandra and Daryl told OCHS to get rid of their new stuff, they were threatened with removal fees. They felt abused and mistreated.

Who can blame them? This water heater company, which has been in business for just over a year, was penalizing them for exercising their legal right to cancel without a penalty. You can read their story below and the company’s response.

I also have an update about a court case that tested a rental company’s responsibility when a water heater leaks. Reliance Home Comfort denied liability, but was shot down by the judge in divisional court. Here’s my earlier article.

Reliance appealed and was shot down again this week. It was ordered to pay $16,000 to the homeowner for water damage in the basement caused by the leak.

This article in Canadian Underwriter talks about the key issue. Does a rented product come with an implied warranty of fitness during its entire lifespan? The court said yes.

The 14-page judgment by E.E. Gillese, released Nov. 27, dismissed Reliance’s argument that the contract was signed before the Consumer Protection Act was strengthened in 2005.

Here’s the crucial argument:

Ms. (Shirley) Szilvasy was an ordinary homeowner. Reliance is in the business of supplying — by means of providing and servicing — hot water tanks to residences.

At the relevant time, Reliance had approximately 1.2 million tanks on lease to its customers. In the circumstances, there can be no doubt but that Reliance knew the purpose for which Ms. Szilvasy rented the hot water heater (namely, to produce hot water for her home) and that she was relying on its skill and judgment to provide a properly functioning water heater.

Accordingly, there was an implied condition that the water heater would be “reasonably fit” for the purpose of heating water in her home. The water heater in question was not reasonably fit for that purpose because it leaked.

Here’s a link to another Reliance case decided at the same time.

So, why am I always writing about water heaters? It’s a business that pits smooth corporate operators against naive, inexperienced homeowners. The result is often exploitation.

Much as I’d like to move on, I can’t avert my eyes while the steamrolling continues and grows. Luckily, the courts are starting to see the business in its true light.

What are your best financial tips?

November 20 2012 by Ellen Roseman

As a fan of personal finance blogs, I get daily emails from many of my favourite bloggers. Today, I have links to their single best tips for Financial Literacy Month.

Thanks to the Life Insurance Canada blog for organizing the challenge. And thanks to Canadian Capitalist for compiling the list (in reverse alphabetical order).

I have two tips: (1) Pay attention to all your bills and statements. Open them quickly and look for errors and overcharges. If you wait a few months to complain, you probably won’t get a full refund.

(2) Play a good defensive game. Remember when you learned to drive? Remember when the instructor told you to assume that all the other cars on the road were out to get you? That’s how you protect yourself as a consumer from corporate trickery.

Assume that every advertisement, sales pitch and promotion is designed to lure you in, giving only the benefits and none of the drawbacks. Realize that it’s your job to hunt down the missing information. Then, you’re less likely to get hooked.

Spend Smart, especially in college (The View From Here).

Take a sound framework to stock picking (Pat McKeough of The Successful Investor).

Think Critically! (Timeless Finance).

Don’t fall into the credit card trap (Solutions Financial).

Don’t spend more money than you have (Self-Help Happiness Blog).

Buy a basket of simple, low-cost ETFs (Sage Investors).

Spend Wisely (Rewards Cards Canada).

A five-pack of money tips (Retire Happy Blog).

When buying a home don’t forget closing costs (ratehub.ca).

Pay yourself first (My Own Advisor).

Be connected to your finances (Money Smart Students).

Take a long-term view of your finances (Money Smarts Blog)

Be bad for the economy (MoneyMasterMom).

Pay down credit card debt and stay out of it (Money Crashers).

Don’t expect your financial advisor to steer you clear of market downturns (Michael James on Money).

Maximize your TFSA (The Loonie Bin Blog).

Why ‘how much’ should be your key insurance decision (Life Insurance Canada).

Plan ahead to get ahead (HowToSaveMoney.ca).

Shop for the cheapest drug dispensing fee (GroceryAlerts.ca)

Understand your spending patterns (Freeat33).

Budgeting is the key to financial success (Finance Fox).

Avoid Mutual Funds (The Dividend Pig).

Start investing now! (Dividend Ninja).

A five-pack of ideas to get you started (A Dawn Journal).

Pay off debt (Canadian Finance Blog).

Keep your investment plan simple (Canadian Couch Potato).

Buy a home you can comfortably afford (Canadian Capitalist).

Budget! (Canadian Budget Binder).

Track Your Spending With Quicken (Blunt Bean Counter).

Make more money (Boomer & Echo).

Get out of debt! (Blonde on a Budget).

Just do it! (Balance Junkie).

Avoid high-fee mutual funds. (Avrex Money)

Finally, Canadian Money Forum participants shared their single best tips here.

The right date: The access to justice panel at University of Toronto is Wed., Nov. 21. Here’s a link.

Extreme Fitness coupon trapped him into $4,000 deal

November 17 2012 by Ellen Roseman

Extreme Fitness loves to lure people into its gyms. But the price of admission can be higher than you think, especially if you have purchased a coupon for a two-month trial.

My advice: Don’t go into one of these locations without a friend to record what’s said. The high pressure selling can be unbearable.

Luis is a 22-year-old Brazilian man, with limited English skills, who’s in Canada on a student/work permit. His nightmare began after he bought a $24 voucher from Buytopia, entitling him to a two-month executive membership, including two personal training sessions.

He went for a fitness test at Extreme Fitness on Yonge St., near St. Clair, in Toronto. Then, he was induced to sign a contract for a year-long membership at $869, plus a service agreement for $3,036 worth of personal training (32 sessions) and nutrition training (four sessions).

“He was led to believe that he had to sign up in order to redeem the voucher,” says his partner Norman. “He said he was pressured into signing a contract because he wouldn’t be able to achieve his fitness goals in only two months.

“He was led to believe that this ‘full membership’ would activate only AFTER the two-month trial ended.”

When he realized he couldn’t afford the costly package sold to him, it was too late. He was already locked in.

Norman told Extreme the terms of the contract were not explained clearly and there was no proper disclosure on how to cancel. He got nowhere. The club manager said he was wasting his time and her supervisor was away for two weeks. The manager of health services brushed him off.

“After 13 minutes, he hung up on me and would no longer take my calls. He claimed everything was done fairly and Luis understood what he was signing. He refuses to cancel.”

If you read this blog, you know some fitness chains can’t be trusted. It’s like an 800-pound Sumo wrestler going into a ring with an inexperienced lightweight. The customer doesn’t stand a chance.

These group buying deals are persuasive, bringing people through the doors who might never come otherwise. They think they’re getting a no-strings trial. Boy. are they wrong.

I’m posting a few more coupon complaints below. And I’ll update you on Norman and Luis, since I’ve also asked Extreme to cancel the deal.

Here’s news on my upcoming book

November 13 2012 by Ellen Roseman

Fight Back will be published in mid-December and will land in the stores by January. If you go to the Amazon listing you can order it now.

In other news, I’m moderating a panel discussion on middle-income access to justice at the University of Toronto on Thursday, Nov. 21, at 4.30 p.m. Here’s a link. (It’s not Nov. 22, as I said in error here before.)

Don’t forget the free Financial Basics workshop at Ryerson’s Chang School on Tuesday, Nov. 20. I promise to make it lively, as Riscario said in his blog after the workshop last June (on a blisteringly hot day).

Check out The Book of Business Awesome, by Scott Stratten. It’s designed as two short books put together, one read from the front and the other read from the back when flipped over.

It was the reverse side — the UnAwesome — that resonated with me. Let me quote a few paragraphs from Stratten’s introduction.

I have to call my bank a lot. Now they always say their mission is customer satisfaction. In fact, my bank’s number one core value is to “deliver legendary customer experiences.”

The problem is, when I call, I get this message while I wait for my legendary customer experience: “We are experiencing unusually high call volumes.” For the past five years, every single time I call, I hear this message.

And I got to wondering, when exactly do unusually high call volumes become the usual high call volumes? There is no such thing as a 24-hour-long peak time for calls.

They say that the customer is most important, that service is number one, but they act differently. You are treated as though you aren’t important at all.

If I were really number one, they would staff their phone line properly. There would be no hoops, or at least very few, for me to jump through.

Aimed at marketers, the book has great examples of social media campaigns done properly and poorly. As one Amazon review said, “it will stand up to repeated references… Just make sure that your phone message does not proclaim your unusually high call volume 24/7”

Rogers tells client she owes $2 million in roaming fees

November 11 2012 by Ellen Roseman

Erin Paul told me that she had a weird story. I’ll say.

I’ve heard many sad tales about outrageous data roaming charges, but this one hits the jackpot.

Everything was resolved after she wrote to me (and I had nothing to do with it). Rogers has apologized for the information she was given in error.

The story started last July, when Paul was heading to the United Kingdom for the Olympics. She called Rogers to buy a data plan for her smart phone to go overseas.

“They said I had to do it online. I made a mistake — it’s very confusing and I’m actually quite able at these things! — and signed up for a US, not a UK data plan,” she says.

“Though I screwed it up, I got hold of a great woman when I came back, who said she could fix things. Told me what I owed, we agreed on a price, done.

“Then I started getting billed for roaming charges overseas and monthly service fees. I tried to call to ask what these were. I would be put on hold endlessly. Sometimes I’d get to a voice mail, where I would energetically leave my name and number.

“All the while, I was getting notices through mail and email and text that I owed Rogers money.”

On Nov. 2, she did a live chat with Rogers to clear up the confusion. She was told that if she didn’t pay a $225 fee, she would owe close to $2 million.

“Yes, two million dollars. I have photos of this insane conversation. It doesn’t seem right that one lonely person (a former Rogers employee) would owe close to $2 million.”

By Nov. 5, all was fine again. Paul contacted a friend at Rogers, who managed to get someone in the President’s office to rectify things.

“They are refunding the fees in question, the ones added on after I returned from the U.K. and had dealt with my mistake,” she told me.

“My real frustration was the ‘customer service’ side of things, particularly the tone of this Live chat that I’m including as an attachment.

“This woman ‘Sarah’ was just downright rude… and I had resorted to Live chat only because I couldn’t get through on the telephone and no one had returned my messages.”

Sarah should never have used that $2 million figure, Rogers said. Her managers would be notified.

“The situation is resolved, but only because I knew someone on the inside! (And yes, I used to work at Rogers Sportsnet as a reporter.) I thought you might get a kick out of the figure she quotes me.”

By now, you’re probably itching to know what happened on the phone. Check the comments below for the verbatim details.

Internet speed: Which is better, ADSL or cable?

November 11 2012 by Ellen Roseman

This is a guest post from Lloyd Davidson, a technology consultant with residential and business clients. He has strong views about the Internet speeds that are advertised but not always delivered.

I’ve been getting a few comments from people who disagree with his views, so be warned. These are opinions only. Feel free to disagree.

————————————————————————-

From Lloyd Davidson:

I am writing this for people within the Toronto area, who have a choice between cable provided by Rogers or ADSL provided by Bell Canada — or any one of the many suppliers that use their infrastructure.

Internet speed is important because it makes a big difference in the responsiveness of the system you are using. That system is likely a computer, but it can also be a TV, tablet, cell phone or an Internet-based phone.

If Internet speed is too slow, the experience of using the device will be very disappointing, if not impossible.

One key issue: You won’t likely get to know how good your service is until you actually install it. Talk to your neighbours. You may want to negotiate a cancellation clause.

This is a complex topic. I’m not a communications engineer who fully understands all the details of how this works. I serve a broad variety of computer users throughout this area. My comments here are based on my observations among my clients’ installations.

In most cases, Internet services delivered over the Bell Canada infrastructure are not as fast as cable-based services. The reasons have nothing to do with the service companies, but have to do with their respective systems of cables, wires and connections.

Cable companies use coaxial cable. Telephone companies, for the most part, use twisted-pair wire to deliver ADSL services.

Among my clientele, ADSL customers rarely receive higher speeds than 3Mbps. I have one that gets 4.2Mbps. Most get under 2.5. I have seen some as low as 0.5.

Cable customers receive 90% of the contracted speeds and usually higher. The speeds claimed by both are roughly the same, but what gets delivered is a completely different story. Prices are roughly the same and are currently highly negotiable at Bell and Rogers.

Both cable and ADSL infrastructure can be improved by the use of fibre optic cables. Fibre is capable of hugely faster speeds, but is expensive. Most services in this area use fibre to some extent. To my knowledge, none have fibre into homes.

In most places in the Toronto area, Rogers has fibre on the street. You share that fibre with your neighbours. So, if you have several neighbours who are big downloaders, you could see big effects on your speed.

Bell has fibre to some neighbourhood cabinets. I have also heard that Bell has a few areas in which it has installed bundles of fibre down the street – one per customer.

If Bell has fibre on the pole outside your home, you should consider Bell and its other Bell infrastructure sellers equal competitors to Rogers and its infrastructure sellers. It can be challenging to get straight answers to this question.

Here’s the reason ADSL customers get such widely varying speeds: ADSL technology depends on short wire length, wire quality and perfect connections. Key word here – wire length.

Wire length, in this context, means how long the wire is between your modem and the telephone company’s central office (or a fibre connection) where your particular wire terminates. That is not the distance you walk or drive. You may have 100 feet or more before it leaves your property. There are a lot of connections in those wires and if any one of them is not perfect, it has a drastic effect on your speed.

Most homes have telephone wires installed by telephone technicians years ago and those connections mattered little for voice quality.

The following are what can be expected (5280 feet = 1 mile):

Distance in Feet, DSL Type and Speed

Less than 11,000 ADSL – from 3.0 Mbps to 5.0 Mbps download
11,000 to 17,000 ADSL – from 1.5 Mbps to 3.0 Mbps download
17,000 to 20,000 Ext Reach DSL – from 384 Kbps to 1.5 Mbps download

Note that these speeds assume ideal conditions.

Pay close attention to those letters: Mbps, which stands for Mega Bits Per Second. That is different from MBps, which is Mega Bytes per second. A byte is roughly 10 bits.

KBps stands for Kilo Bytes Per second. There are 1000 K in an M.

Also, pay close attention to the fact that you are contracting for TWO speeds — one down and the other up. Up speed matters little for browsing the web or reading email, but matters a lot if you use Skype, a VOIP phone, or you want to send a lot of big pictures or big files.

Up speed is typically a small fraction of down speed. In most cases, 1Gbps will serve your needs well.

The A in ADSL stands for asynchronous, which means you get slower up than down. The common abbreviation of DSL may be a misnomer. If the DSL offer provides up speed equivalent to the down speed, it is truly DSL.

DSL is uncommon. I have not seen an instance of it, but have been told by others that it does exist.

There are a lot of factors to consider in making your particular decision, ADSL Vs. cable. A lot depends on your specific situation:

• Quality of the connections on your property.
• Length of twisted pair before it gets to fibre. Lengths of 100 yards or less can deliver very high speeds – one that I know of gets 32Gbps.
• Quality of service in your particular community – really your street or building.
• Charges for high volume downloads (e.g. videos, TV).
• Condo/Apartment negotiated deals.
• Bundles of services offered by each will vary.

One key issue: You won’t likely get to know how good your service is until you actually install it. Talk to your neighbours. You may want to negotiate a cancellation clause.

There are geographical areas served by Rogers that are under-served. There are also geographical areas that get much better service using ADSL, because very high quality wire and fibre optic cables are installed.

You should plan to reconsider your decision every couple of years, because of improvements that may have been made in networks. Those effects can be quite local. If the competitive circumstances continue, you may find a better deal in switching.

If you wish to check the speed that you are getting, the most neutral speed testing site I know of is www.speedtest.net. Run the test several times and several different times in a day to get a true picture.

Your perceived Internet service may be different from what was contracted for, because the Internet is a complex structure in itself. Your delivered Internet service is but one of the components. If you go to a website that is slow, your Internet service at that site will be slow, regardless of your service provider’s service.

Your computer can have a big effect as well. It could be old and slow and/or infected.

The difference between using Rogers or Bell as opposed to one of the other companies is customer service. When you call a smaller company, you usually get someone on the phone who is happy you called. However, keep in mind that if you have a physical problem such as wires, the smaller company has no one on staff to fix it.

Rogers is selling a new modem called DOCSIS 3. This replaces the older DOCSIS 2 modem. DOCSIS 3 modems are capable of much faster speeds.

In the Toronto area, Rogers customer service (not technical service) department can raise your up speed quite substantially for no additional cost iF you have a DOCSIS 3 modem.