Author Archives: George Boelcke

Dealing With a Collection Agency

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440 companies with revenues of half a billion a year, that’s the size of the collection agency business. Unfortunately, millions of Canadians are going to meet one of them sooner or later. It’s one of the most stressful things you can go through. But it doesn’t need to be.

Collection agencies are all licensed so they do have rules to follow. They’re also all on commission, as is every collector you may talk to. That makes them highly motivated to get the money. Most follow the law – lots do not. Remember that they are collecting money that has no collateral. It’s not like they can just foreclose your home or repossess your vehicle. They’re collecting smaller amounts, largely credit card debt that’s over six months old.

Since they can’t use the “repossession” threat, they have to intimidate and borderline harass you to the point where you will do anything to make them stop. That’s the game they play – to the edge of the law…if not further.

Collection agencies will first send you a letter giving you a heads up about the debt and start calling you five days later and really never stop. You do have the rights, however. But you have to send them a letter in writing or they will likely claim they never got it.

It’s your right to have them stop calling you at work.Its’ your right to have the debt fully broken down in writing – the original amount, interest, fees, penalties, etc.They cannot sue you after two years of last activity. So if it’s been two years since your last payment, they cannot take you to court. They can, however, keep calling and attempting to collect.Do not ever send them a note or email acknowledging the debt or paying even one dollar. That simple step will re-set the two year clock and they can now take you to small claims.

If you do not have the money, there is no debtor prison in Canada. Take a deep breath, tell them once you don’t have the money or assets and stop calling. Then hang up the phone and stop answering their calls.

If they take you to small claims court, you must show up on the date of the summons. Just showing up gives you a 50-50 chance the debt will be wiped out. You need to ask for the full breakdown and the documents you signed to prove you legally owe the money. It’s likely the collection agency does not have any of that. If they can’t produce it – the claim is dismissed. If you do not show up, there will be an automatic judgment against you for the full amount. That half a day at small claims matters a lot!

If you have the money and want to settle the matter, negotiate the amount. It’s likely half of it is interest and fees. Offer them 30 cents on the dollar and haggle from there. When you agree on an amount, you must get it in writing from them. If not, they’ll take your money and start collections on the rest all over again and you have no proof that you settled for less. If you’ve settled and have it in writing send them a bank draft or money order. NEVER send a personal cheque. Many have been known to take your banking account information and jam through a second charge for the rest of the balance.

Lastly, keep the settlement letter and your money order receipt for the rest of your life! They may re-sell the collection to another company who will now start calls again. You must have the proof that you paid. You will also need to send it to the credit bureau to have the collection now shown as paid and removed after six years.

Online Returns Are Going to Cost You

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In the last few months, a number of large retailers have started to pump the brakes on returns for online purchases. Yes, it always starts south of the border, but will be here pretty quickly.

According to NRF research, the online return percentage in 2019 was 8.1% but jumped to 16.5% in 2022. That’s expensive for retailers and they’ve started to work on reducing that percentage.

Macy’s has implemented a $10 fee and H&M one for $6. But what sets the tone is the largest online retailer Amazon: For certain product categories it’s a one dollar fee. Bet on that expanding in categories and increasing in rate. Other ways are that about 80% of retailers will now have YOU pay the shipping fee to return items and others are experimenting with sending you an offer of a partial refund where you keep the product.

For months now I’ve wanted a New Orleans Saints sweatshirt. Yes, any NFL merchandise is massively overpriced, but I found a sort-of deal for US$60. Then checked the fine print: $20 shipping (never!) and it would be $25 to return it since sweatshirts have a wide variety of medium size definitions and fits. That makes it around $140 for the attempt to buy one that may not fit. Guess it’s never going to happen…

Update: Add Bed Bath and Beyond to the companies aggressively charging for full return charges in many cases. The company went bankrupt, closed all stores and was purchased by Overstock. Their website looks the same, but items are now online only and shipped out of the U.S. My first (and last) purchase of a $122 dresser that wasn’t correctly sized/described on their website took six days to even receive a “return authorization.” Six days of getting ghosted? Then they provided a UPS return label and refunded a partial $81 with no explanation. Seven days and five emails were ignored before I found someone at head office. Oh, that’s for shipping. Another 15 minutes to explain it was THEIR incorrect specs which caused the return before they agreed to refund the $41 UPS charge. Oh, and if I had returned it via UPS, the charge would have been $23. So does Overstock pay almost double what a one-off customer with no corporate account pays or has the return shipping become a major profit centre to them? You decide…

Self Checkouts Are Shrinking

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There is a percentage of people who absolutely love self-checkouts. There’s probably an equally large group who detest it for a variety of reasons. In between is the majority who just want to get in and out quickly and don’t have a strong opinion either way…other than not wanting to be 9th in line for that one cashier – or camping at self-checkouts that don’t work, can’t scan or need “find an associate.”

It turns out, however, that the large chains are giving up on expanding self-checkouts. The quantity has been shrinking in the last six months and is going to continue to be less and less available. Stores just can’t find a way, with current technologies, to reduce the theft rate. Double checks at the door, item counts, weight vs. scanned, extra staff, etc. etc. just aren’t doing it.

Sure, the technology companies have a lot on the line in being able to continue selling their software. But they’ll have to do more and a lot better before stores take another shot at self-serve expansion. From Wal-Mart to large grocery chains, for the time being, it’ll be less available, if not shut down altogether.

Great news or bad news is up to each persons’ preferences. Count me in the middle group with the heads-up that I’m not going to stick around 9th in line. But when I won’t wait an unreasonable time to get through the checkout, I do give my cart or basket to someone with an apology that they need to put it all back…until they can figure out an efficient system to get me in and out…

New Sports Gambling Laws Now In Effect

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If you’re watching any sports on TV, you’re now bombarded with gambling site ads. No matter what province you’re in, most of them are for Ontario residents only. You’ll see the tiny print on the bottom stating “you must be physically present in the province.” But every province does have sites and then there are always the online and unregulated ones.

As of last month, Ontario has banned the use of sports personalities, athletes or other celebrities in these ads. I may be cynical, but politicians and governments are the last people that care about doing anything positive. Yet even THEY are realizing these gambling ads have gotten way out of control. Studies show it’s 20% of sports ads, maybe that’s low because curling doesn’t have a lot of them, but it feels to me like it’s more than half of all ads these days…at least for NHL games. And they’re everywhere: Go to any minor hockey arena and you’ll the the boards plastered with gambling ads. Just like tobacco: It’s never to early to plant the seeds. After all, that’s their future customers! Want proof? Ask any six to 10 year old that watches hockey if they’ve ever wanted to bet on the games. You’d be stunned by the results!

Gambling is super addictive. Should we even allow these sites to advertise at all? We no longer allow ads for tobacco. No, the health care costs for gambling addicts isn’t nearly as high as tobacco became. But is there a difference? Setting aside that odds are better on slot machines than sports gambling, should we encourage and promote this? Not to mention the sucker bets and tiny odds of winning in-game bets. Even after the first period, if your team is down by two goals you can still bet! The odds now get massively high which is a great incentive (trap) to still bet your favourite team. Never mind the stats that frequently show up on the top left of the screen: X team is 26-3 when leading after one period…or whatever the stat. Yup, bet your team coming back 26 times and you MAY win three out of those 26 bets! There’s optimism and then there’s stupidity…

The Value Of An Actual $20 Bill

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A few weeks ago I ran a bunch of errands, but only had about $30 in cash. After the second store, I ran out of cash and started using my debit card the next three transactions. They were all smaller purchases and not something that should go on my debit card. No, I’m not a dinosaur, I just don’t want my bank tracking every transaction. So I detoured to an ATM to get more cash for the rest of my shopping stops.

The increasing amount of people using only digital purchases by phone, debit or credit card can do their thing. There’s no chance they’re going to listen to me or any other experts. Yes, they’re overpaying 12 to 18%. There are studies to show that and we’ve talked about everything from why and how to casinos to Disney and cruise lines using your room key for all purchases so you’re not really feeling the pain of overspending until you check out. Yada yada yada…as few people will take that to heart.

For some of us (just not enough) we really want to use our $20 bills – real money. My cash isn’t ever going to get hacked. If I lose a $20 bill, I’m out $20 and not my entire bank account balance. It still works if it gets into water and doesn’t need a battery or ever get out of range or lose its reception. If computer systems go down, my $20 still works. (No, gold won’t and doesn’t – stop believing the end-of-world stories that you should have gold…). I can also use it to help a homeless person or make a donation in a charity box.

Of course I use my debit card for larger purchases. And my credit card for anything online to have the safety of being able to cancel the transaction if need be – and anything ordered within 60 days so I can also cancel it if the item isn’t delivered or the service provided, and for gas stations. For everything small and daily – leave me my cash, please.

The Plastic Ban That Makes Things Worse…

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There’s something called the law of unintended consequences and for every action there’s a reaction. The so-called ‘single use’ plastic ban is a perfect example of this.

Far left city councils in many places, including my jurisdiction, have banned plastic bags. I may be in the minority, but I’m not alone, based on my informal surveys of neighbours, friends and family. The single use was actually a first use to get my groceries home. Then I used them for storing stuff, for liquids, to wrap paint stuff for a few days, and finally for my kitchen garbage. Last week, when I ran out, I had to purchase kitchen bags. Yes, I had to PAY to buy more, to buy STRONGER and BIGGER…all for no reason.

The smallest (Costco) bags I could find are almost twice as big as the flimsy grocery store bags. They’re also a lot thicker plastic. Sure, I can still use them for other stuff, but the day they end up in my kitchen, I use less than half of one with my small kitchen garbage.

Over a decade ago I helped a friend dig up her garden and we found a bunch of black garbage bags that had been used as liners for years. They were dirty, but otherwise in fine shape. That was my wakeup call to be really diligent in recycling plastic. Today, I’ve given up trying.

The new laws are forcing me to use at least 2 1/2 times the amount of plastic as I did before the bans. Sad but true.

This is environmental theatre. In my case, it’s a law that’s easy to implement and makes things worse and not better. The “real” single use plastics are the wrap on ham, the ketchup bottles, and the liners and wrappers in a half dozen things I bought my last grocery trip. Eight things that are REAL single-use plastics. But politicians wanted to seem to do something and the path of least resistance is banning shopping bags.

There are now companies who have developed bio-degradable plastic bags. But don’t bet on any of them ever being allowed for use. It would defeat the politicians’ environmental theatre.

As of today, pizza boxes can’t be recycled. Sure, they’re cardboard, but the grease from the pizza won’t allow it. And all those containers from margarine to yogurt that have a number on the bottom making to “recyclable” aren’t recycled anywhere. Soft plastics never are. Why can you put these items into your blue bag in most cities? Because politicians don’t want to advertise that fact.

About Those True But Wrong Inflation Stats:

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While the one-sentence so-called top line inflation numbers the media reports are accurate, they’re also totally false. Here’s one of the best recent examples:

The Council of Economic Advisers issued a statement in November that this years’ average family turkey thanksgiving dinner was down by 5%! A great reinforcement to politicians stating that inflation is back under control. Nothing to see here – move on.

Not so fast: That same calculation of the cost of thanksgiving dinner in 2023 was UP 15% from two years prior and UP 20% from three years before.

Inflation stats are released for the prior month and is used as a 12-month floating average. The biggest wave of inflation was in the time period of August 2022 to July 2023. That’s all baked in and will never go away. But since then, inflation has slowed down. But that’s “new” or “further” inflation and now doesn’t include calculations of what happened more than a year ago.

Politicians, especially in the US, can’t understand why people aren’t feeling great about the economy. After all, inflation is under 3% and everything is great again. It’s a total disconnect between reading stats and going to the grocery store to buy stuff that’s a whole lot more expensive. But a story that it’s really expensive now but not getting worse just isn’t ever sexy.

If something was priced at $10 in 2022 and went up 20%, the price became $12. To now tell people that inflation is “only” 3% is telling you that the new $12 price is now $12.36. That’s not a decrease – it’s a slower increase. There’s an old saying: Statistics don’t lie, but liars sure can use statistics. It doesn’t help that reporters that parrot the monthly stats are either lazy or overworked. That’s why we get the one-sentence newscast line that: Inflation is now under 3% without the context or reminder that the other 20% (average) or upwards of 50% (food) is still in there.

Financially Supporting Your Adult Kids? Maybe…

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According to a CIBC survey last week, one in five parents are helping their adult kids with money to the tune of $500 a month. 71% said it was through free room and board, almost half by paying for groceries and household expenses, and almost 40% by paying cell phone bills.

If experts say it is the generation of helicopter parents, it only stands to reason that becomes enabling them as adults. But we do have to exclude parents helping kids going to college or university! The’ going to school deal’ with be different for every family, and seems reasonable for me as an outsider. This survey also doesn’t account for families who certainly have the wealth to help. If kids have a parent who’s a PHD (Pappa Has Dough), why wouldn’t they make the call for money?

But another survey some months ago found that 80% of parents don’t talk to their teenage kids about money – and this is the result. If they don’t know, they can’t manage their money, learn priorities, or boundaries as adults.

If your adult kid is not going to school and you’re not wealthy, there’s a big problem here. Your love for your kids is unconditional, but you only have a finite amount of money and little time to save for retirement in comparison to your kids. Broke people cannot help others – family or not. I know that’s easy to say when your kid calls – but it’s the truth.

The time to lay the groundwork for this starts at age 14 or so. But here you are now needing to learn to say no in a loving way, and to set financial boundaries if you cannot honestly afford it!

The old Ronald Regan saying of: Trust but verify applies here: If it were me, and that’s how I always discuss things, my kid would need to email me their last two credit card and bank statements. I want to see what money goes in and where it gets spent. Think about it: Priorities 101 say: Food, rent, utilities, transportation. If they cannot even afford food, there’s something WAY bigger here than a few dollars. I would tell my kid that I love them and that’s exactly why I won’t send money. But I’ll have them hooked up with a couple of part-time job interviews by the end of the day.

See, the problem is that many kids won’t take a job they think is “beneath” them. They’re holding out for the BIG job and BIG title. Sorry, eating and shelter trump the cool job in favour of any job to bring in money. A part time job with limited income will immediately re-arrange the financial realities and priorities they didn’t learn at home or at school.

If you do help AFTER you’re comfortable knowing it’s not a lazy, budgeting, blowing through money issue, you need to be smart about it: Make the check for part of the rent payable to the landlord. That way you know where the money goes. Get them a gift card for groceries. It has to be a grocery-only store, so not Wal-Mart (they sell too much other stuff that isn’t from the food family). Make it clear this is an exception and not a monthly support payment. It gives them a 30-day heads up to get that part time job or change their priorities.

At TD, A 45 Cent Short NSF Is $96 In Fees

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Yesterday brought a tiny victory to consumers on something that’s mostly ended in the U.S. for some years. The Ontario Superior Court approved a settlement with TD Bank for not fully disclosing that an NSF for one item triggers two NSF charges.

The lead plaintiff in the class-action lawsuit, Tyler Dufault, was 45 cents short on an auto payment from his account. As a result, the item bounced (NSF). But creditors have the ability to re-try/re-process it a second time. Thus, the TD charged two NSF fees of $48 each. Bottom line: 45 cents short in his account triggered $96 in NSF charges.

The class-action lawsuit related to improper (or no) full disclosure to customers that two NSF fees can be triggered. Of course (surprise!) the TD did not admit to anything but settled the class-action suit for $15.9 million. That’s like you and me paying a nickel as TD had annual revenues of $75 billion last year! Lawsuits against all other major banks are ongoing.

If you are one of the 105,000 people caught in this by the TD between February 2, 2019 and November 27, 2023 the settlement will be $88. If it’s happened at one of the other banks, stay tuned for their likely settlements.

According to the Consumer Financial Protection Bureau in the U.S. the average cost of processing an NSF cheque is less than one-half of a penny ($0.005), since it’s entirely automated. Yes, this is one of the predatory charges of banks in general until the Federal Government steps in as they did in the U.S. No – getting an overdraft is a very bad idea with the staggering rates and fees.

Ironically, both the TD and BMO in the U.S. do not charge NSF fees to their southern customers. But here…well…if they can – they will. Will any of the banks change their policies? Not hard to guess that that’s a firm NO. They’ll add two lines to their five to 10 page account disclosure and carry on double charging. Sick, sad but true.

Have Some Mattress Money?

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While GIC rates are still pretty high, but dropping, it might be a good idea to consider what to do if you have any money under your mattress, too much in your checking account, or sitting in a bank savings account.

No, that wouldn’t and shouldn’t be investment money. That’s your retirement investment. But that definition is for any money you will not need or touch for over five years. The money you’re saving for a down-payment, a newer vehicle, home renovations, or other things is money you should not be investing as you’ll want access to it in less than five years.

The most effective way to have this money earn some returns is to ladder five GICs. Let’s use $10,000 as an example: Get five GICs for $2,000 each. A one year, two year, three year, four year and a five year one. That way you have access to a fifth of it every year. Right now, a five year GIC is still about 3.75% and a one year (if you look around) still gets you around 5%. Just make absolutely sure that you have it in writing that the maturing GIC does NOT automatically get renewed. No, them telling you doesn’t count. No, their comment that they “never auto renew” is a lie and doesn’t count. You need it in writing that the maturing GIC will be deposited into your checking or savings account. If it’s not in writing it does not count. On two previous occasions I’ve had to get a lawyer involved when GICs for a relative and acting as an executor were auto renewed and the bank attempted to tell me that I was out of luck. And that was WITH written instructions, dated and noted as to who it was given to!

Oh, and none of this matters or applies if you have a credit card balance! Hunting for an extra quarter percent return when you have a 20% credit card rate is crazy! See the Money Tools book chapter on credit cards: How to get a guaranteed 50% return (by paying off your cards).