Tag Archives: consumer protection

Visa And MasterCard Win Again

Some time ago, the Retail Council of Canada had gone to the Government Competition Bureau to fight the fact that credit card issuers force them to take every credit card offered, no matter what their discount fee. It’s about the $5 to $6 billion a year in fees for Visa and MasterCard. But they’ve now got a ton of higher-end cards with more perks. Well, guess who pays for those perks? Merchants through much higher credit card fees. And the Competition Bureau just ruled that’s just fine – and their reasoning is confidential. Two and a half years to make a decision and…can’t tell you why…

It made my head explode. Are you kidding me? Now, they claim it’s a regulatory issue for the government and….the Finance Department says they’ll study it. What that likely means is, we’ll stall until it dies off. What was the response from the card issuers? We’re please that we can continue to protect consumers from unfair charges. Hmmm…pleased to help consumers or pleased to protect $6 billion of income? Nice try.

Since we’re on the credit card theme, I received an e mail last week from someone pretty mad. Their credit card issuers dinged them for a $20 inactivity fee. Yup – it’s legal and can happen if they’ve disclosed it on the original application – and it’s getting more common. If you don’t use your card for a year, you may get hit for $10 to $25. Even worse, you may have your account closed out from under you. That’ll have a huge impact on your credit score – your credit rating. It’s another reason to always have two cards from two different issuers. One may get lost or stolen while you’re traveling and you’ll be stranded or one may turn on you and close the account.

To keep your credit card active and part of your credit score, you should use it twice a year. It doesn’t have to anything beyond $20 but it needs to stay alive and any activity will do that.

If you’re looking for a credit card or just want to compare your fees and/or perks to others, there’s a great interactive site at the Financial Consumer Agency of Canada. Here’s the link for it:


By the way: If you search by rate, there are currently 12 credit cards with interest rates under 10%! If you often carry a balance, that’s the only factor, along with no annual fee, you should input and decide on.

Finally a Number of Get Rich Quick Schemes Are Exposed

For the past few years we’ve been inundated with many get rich seminars, DVDs, free workshops, and infomercials. I’ve talked about them in the past, without mentioning names, but now it’s great to be specifically talk about these scams. Because that’s what they were, and are:

The Consumer Protection Bureau (of the FTC) has now charged some of these infomercial people with defrauding “thousands of people of over $300 million,” in their words. These include John Beck’s Amazing Profits from Real Estate, John Alexander’s Real Estate Riches in 14 days, and Jeff Paul, who has been marketing infomercials for over three years, scamming people on how to make millions on the internet.

The FTC says they’re fraud, and these people are also being charged criminally. “Thousands of people have been swindled out of millions of dollars by scammers who are exploiting the economic downturn,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Their scams may promise job placement, access to free government grant money, or the chance to work at home. In fact, the scams have one thing in common—they raise people’s hopes and then drive them deeper into a hole.”

Like most investments or credit rip-offs, if it sounds too good to be true, it’s too good to be true! No money down, invest in property with no down payments, or make $50,000 a month on the internet? No way, no how – never, ever!

In the 1920s the stock market collapsed when everybody needed only 10% down to buy stocks. What was the result? The great depression.

In the past few years, it was buying real estate with no money down. As a result, tons of people bought numerous investment properties. I know of a doctor in California that had eight investment properties. For the first two he used the equity in his own home, the other six are financed with no money down. Today, he’s lost his own home, and all eight so-called investment properties have been foreclosed, and he’s now bankrupt. How do you think everyone else is doing today?

In the past five years, investment firms like Lehman Brothers were allowed to leverage themselves at 33 to 1. That’s one dollar of investments used to borrow 33 times that amount. Where are those investment firms today? Every one of them is out of business, bankrupt, or was forced into a sale or merger.

These days, it’s seminars on how to get rich through real estate foreclosures, and that everybody should be dumping stocks and buying gold.

Gold over the long term barely beats inflation in return percentages. It reached $850 in 1980 before tanking. For someone who purchased gold in 1980, it would have to be at $2,300 today, adjusted for inflation just for them to break even. So today, we’re barely half-way to recovery from the ‘80’s. Yet there are ads and commercials everywhere wanting us to get rich and dump all of our money into gold.

If we’re starting to think about some of our financial goals for 2010, sorry, there are no shortcuts to getting rich. It’s slow and steady, paying off our debts, living on less than we earn, and saving some money each month. Most of the rest of these programs or scams will likely leave you in debt, and not on easy street. You can take my word for it, or do a little research before jumping into anything, or find out the hard way.