Tag Archives: TD

A Horrible Month For TD and Royal


It hasn’t been a good month for two of our banks. They couldn’t control the drop in their share prices after the vote in Britain to leave the European Union, but the other problems are purely of their making.

I wanted to share both last week, but since then, both have now become international news stories:

TD got their foothold in the U.S. during the financial meltdown. They purchased Harris Bank and another one called Commerce Bank. Commerce Bank was loved by their customers. But those same customers might not be loving TD right now. NBC did an investigative report into coin counter machines. TD was found to shortchange people by 15% on their coins.

What? A bank that cannot count? Not a good PR move! On the other hand, you’d think the ones in retail stores might be questionable…but that’s not the case: They were all found to be accurate. Clark Howard, on over 400 radio stations in the U.S. calls it a big rip-off alert. Then it got worse: They knew their machines were ripping people off and STILL rolled them out in Canada! That’s now a class action lawsuit, according to CBC Marketplace. But when they knew this, why isn’t it criminal fraud?

The second one involves the Royal. Scotia closed most of their retail banking in the Caribbean last year. Now the Royal announced new and increased service charges for their customers. Some of them up to $11.75 a month. In the seven countries where they operate, the average minimum wage is $4.23. There have now been international media reports of lineups ranging two to three hours this week as locals close their accounts. That’s great to see: People voting with their wallets and firing their bank! Love it!

This Couple’s 25% Car Loan Has Lots Of Insights

Last week the CBC did a story of a couple in Kelowna who signed up for a 25% subprime car loan. It exploded on my Facebook page with large numbers of shares.

It’s commendable that the CBC did this feature, and great education, but I’m guessing they didn’t put this family in touch with anyone that could actually help them. But, that aside, I have 20 minutes worth of learning and warnings here, and five minutes to share them. As always, I’ll post the rest of the story on my website.

This couple had a recent bankruptcy on their credit. For five years that guarantees a rate of 20% or higher for a car loan. The dealer got them financed through the TD Automotive division. Where is it the TD’s fault this couple is really high risk. Hello? They defaulted on all their debts in bankruptcy – whatever the reason! Risk equals rate – always will. Just look at the fine print of most credit cards that range from 10% to 27%, or lines of credit from prime to prime plus 6%.

Yes, the dealer probably made over $5,000 on a huge markup of interest rate, fees, and price of the vehicle. They didn’t even get to pick a vehicle – they were told it had to be this one to get financed – not true, but it’s one of so many red flags in this story. Yes, the dealer lied when they promised (if they did promise) the couple could refinance at a decent rate in a year. That was never going to happen, but I hear that promise all the time to get people to sign up for insane financing thinking it’s only for a short time. And if this promise wasn’t in writing it wasn’t true. Never rely on verbal promises as you’ll never collect on them. Now the dealer is offering 5% financing on a new car? THAT would make things so much worse. But that’ll take too long to explain. Someone get this couple in touch with someone who can help, or go to Mosaic and get them my $20 It’s Your Money book – it would have saved them $5,000 or more.

How often does the average person buy a vehicle? Maybe every five years? Well, a salesperson sells 10-12 a month, and the business manager deals with 5-8 a day. So, you have one purchase experience versus 600 sales versus the finance manager having financed and upsold 6,000 times in those five years. With a score of 6,000 to 1 that’s like bringing a knife to a machine gun fight. You don’t have a chance – this couple didn’t have a chance.

Yes, this couple got massively ripped off. But they CHOSE to be ripped off. I’m sick and tired of our ever diminishing personal accountability. I can already think of three options this couple had, other than signing up for a loan that will end up costing them 2 ½ times the price of the vehicle.

But I can already hear a lot of people thinking that this isn’t fair and no wonder the rich get richer. Yup – they have investments and savings while YOU have debt and payments. 90% of millionaires did not inherit their wealth – they became millionaires on their own. 75% of millionaires do not finance their cars. Well – they’re rich…yes, because they don’t do dumb financing. If you want to be a millionaire, get a $2,000 car instead of a $500 car payment. Then start setting aside some money. When you have some savings, step up and buy a newer vehicle. But a $500 car payment will guarantee that you’ll be stuck in debt for another decade and won’t ever be able to save. Go look up what Warren Buffet drives if you want some more evidence.

The average guy can’t get ahead – yes you can – get your finances under control, get rid of the killer car payments, or sell that house that’s eating up 50% of your income. I haven’t had a raise in two years – well – go get a raise. Good chance you get paid what you’re worth in the market place. So up your game, get to work earlier, work smarter or harder, or upgrade your skills. The average guy can’t get ahead? Come on – stop thinking like a victim. This is Canada and not North Korea.

I’m sick of the victim mentality. Repeat after me: If it is to be it’s up to me. The government, or two people in the story stating there should be more regulations, isn’t going to fix your financial life. It’s gotta be you. My apologies if I’m being unclear.

Whatever your borrowing today, at whatever rate or payments, may seem like a good idea and the only solution. But whether it’s a car, a line of credit, a payday loan, or your credit card, it will make things worse, much worse, down the road.

When you say you can’t do it, it wasn’t your fault, you have all these payments, you had to get that loan, or it’s too hard, you’re going to spend the rest of your live proving that you’re right.

PS: Why would a new vehicle loan at 5% make things so much worse?

This couple’s first 30 months of payments has paid almost 75% of the total interest at 25% as it’s very front loaded when they owe the highest balance. Having overpaid on the price and paid very little principal, they’d still owe at least $7,000 more than the car is worth. That shortfall has to be “rolled” into the new loan. Almost 50% of people owe more on a trade than it’s worth – this couple is the rule and not the exception. A new vehicle depreciates 30% in the first year. Even if it’s a $20,000 vehicle, the moment they drive it off the lot, it’s worth $6,000 less. A $6,000 loss and $7,000 hangover of their old one means they instantly owe $13,000 more on the new vehicle…and things get worse and worse and the vicious cycle continues with no hope of trading that one for six or seven years, huge payments again because the $7,000 loss is hidden in the new one and heavens forbid it’s written off or stolen because the insurance pays the real value and not the massive over-financed loan.

Human ATMs and a Rental Car Heads Up

Read the screen! The New York Times just reported on a lawsuit involving Dollar Rent A Car over allegedly charging the huge collision coverage so-called protection on their car rentals.
Dollar, Thrifty, and lots of others try to sell you, and when you decline the coverage (as you should), they may still leave it on the contract.

The Dollar lawsuit alleges that customers were clicking through the five or six different little computer screens and clicking ok. But what they didn’t see is that they coverage was shown as being accepted. You need to read each of those little screens to see it shows that you declined coverage. If not – you’ve signed for it, but won’t see it until you return the vehicle and get an actual printed statement. At that point, it’s too late and your credit card company won’t help you with a dispute since you’ve signed the agreement!

A great idea: 300 TD bank locations now have a coin counter machine right in the branch. It’s free if you’re a TD customer. I love the idea and the customer service. I just don’t love the idea that you have to be a TD customer to use them.

Ever wanted to talk to a human at an ATM machine if you’re stuck or have a question? Bank of America CAN have a good idea: Yes, it’s true: The bank with THE worst customer satisfaction rating on the planet has come out with a great idea.

They’ve just rolled out a human being ATM being tested in New England. It’s a normal ATM, but artificial intelligence and a skype-like connection lets you talk to a real human being from 7 am until 10 pm!
Yes, right at the ATM you can get questions answered and do transactions that you ordinarily can’t do with an ATM such as split deposits, foreign currency transactions, etc. I love the idea and hope, like everything else, it’ll come to Canada with one of the big banks.