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Telecom mediator sees 57% spike in complaints in 2017-18, mainly about wireless

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The federal watchdog that handles customer complaints about telecommunications and television services in Canada saw a 57 per cent spike in complaints in 2017-2018, most of them involving wireless providers.

The Commission for Complaints for Telecom-Television Services said Tuesday that it also expects to see complaints rise this year. For the first time, the federal watchdog is also investigating complaints about television.

But most of what it heard in the year to September 2018 were the same issues that the CCTS has been dealing with for the past 10 years — non-disclosure of information and bill surprises by wireless operators.

“Customers will communicate with their service provider and then find out that the reality of what they get is not what they expected to get. This results in billing issues, in charges people don’t expect, on limitation on bandwidth or data,” said CCTS Commissioner Howard Maker.

“It’s a mismatch of customer expectations and what their service provider delivers.”

Maker said the complaints come despite a revised Wireless Code, which is meant to protect consumers. It came into effect in December 2017.

Howard Maker, commissioner of the CCTS, says there is lots of opportunity for the telecom providers to do better, including solving complaints before they reach the telecom watchdog. (Andrew Lee/CBC)

The CCTS handled 14,272 complaints from consumers in 2017-2018. Of that, 41.5 per cent of them were about wireless service and 29.2 per cent were about internet service. Complaints about television made up only 10.6 per cent of the total.

The Canadian Radio-television and Telecommunications Commission held hearings into the telcos’ sales practices earlier this year and is due to present the findings in February.

Consumer advocates speaking at the hearings complained that the telcos are misleading seniors and low-income people with high-pressure sales tactics. They called for a sales code of conduct and a “cooling off” period to allow consumers to back out of contracts that are not suitable to their needs.

John Lawford of the Public Interest Advocacy Centre said it’s a positive sign that consumers are complaining more because it means government might listen.

“It’s about time we started increasing complaints in Canada. I’m glad to see people are starting to complain actively now,” he said.

He called for policies that would promote more competition in the telecom industry and “maybe bust out the major players’ stranglehold on the market.”

Lawford suggested rules on wholesale pricing that will encourage competition from smaller players.

“There needs to be some threat to the big guys, so they can’t just do what they want,” he said.

(CBC)

Maker says there is lots of opportunity for the telecom providers to do better.

“We see a lot of complaints that customers bring to us that have no business getting as far as the CCTS. Small complaints where the provider’s own evidence indicates that the customer has merit, that the story the customer is telling is true, and yet they’re not resolved at the frontline, presumably because nobody looked at the records,” he said.

Maker said media coverage of the CRTC hearing with its focus on sales practices may have made more consumers aware of the CCTS and its complaints process.

Telcos need to step up

But he also called on the telcos — especially Bell, Rogers and Telus, the biggest players who account for half of all complaints — to improve their practices.

“Where there’s opportunity for improvement is around the disclosure factor — making sure all the necessary information that customers need to really understand what they’re getting is complete,” Maker said.

Documents should be clear, complete and written in accessible language. Consumers should be educated about “all the ins and outs they need to know to make sure they’re getting what they think they’re getting,” he said.

Internet service complaints climb

The CCTS noted an increase of complaints about internet service, which have grown by 170 per cent in the last five years to 8,987 complaints.

Among the issues  are billing and disclosure issues, but also quality of service such as internet speeds, internet outages and bandwidth overuse surcharges. Consumers also complained about installations — especially technicians who don’t show up on time.

“Consumer protections are in place to TV and wireless, where there are codes. But in the internet business there is no code, so it looks like the CRTC wants to plug that gap,” Maker said.

“This would level the playing field in terms of everyone understanding the rights of the consumers and the providers.”

When the CCTS steps in

The CCTS says it resolved 92 per cent of the consumer complaints it handled.

Among them were:

  • A customer from Laval, Que., agreed to obtain a bundle of home phone, internet and TV services for $111 per month, but was then was billed $131 per month. The provider told her that she was not eligible for the offer priced at $111 per month. CCTS was able to secure the lower price for her for a 12-month period.
  • A customer from Langley, B.C. received an offer from her service provider of a new mobile device, which included a device protection plan. The customer paid $280 for the device and believed she was on a month-to-month agreement. The device broke and she received a refurbished replacement. When she reported her dissatisfaction, she ws told she was locked into a 24-month plan with a $500 cancellation fee. CCTS found the provider had failed to inform the customer that by accepting the new device, she was consenting to a 24-month contract and that it had not sent her a copy of the contract as mandated by the Wireless Code.
  • A customer from Saskatchewan subscribed to internet service delivered through a satellite system. The service functioned properly for a few days until the internet speed decreased, particularly when used for gaming or watching Netflix. The provider said a new plan would be necessary to get those speeds. When the CCTS became involved, the provider offered an upgrade to new infrastructure without an installation fee and with a credit for the customer.

​The telcos’ record in 2017-18

The provider most cited was Bell, the biggest telecom provider in Canada, with 4,734 or a 45.8 per cent increase in complaints.There was a sharp increase in complaints about incorrect monthly pricing and non-disclosure issues.

The CCTS started taking complaints about television service in September 2017. It recorded 3,248 complaints in the first year. (Deyan Georgiev/Shutterstock)

Bell pointed to the increase in complaints for nearly all providers.

“Overall complaints about communications providers have increased each year as both the CCTS’s mandate and consumer awareness of its services continue to grow,” the company said in a statement.

It said its investments in front-line service teams and support systems are having a “positive impact on our customer service performance.”

Rogers, which had 1,449 complaints, sent an email statement from spokesperson Eric Agius: “One complaint is one too many and we always take customer feedback to continuously improve.” 

Telus issued a press statement saying it received the fewest complaints of any national provider, accounting for only 6.6 per cent of complaints.

“Of Telus’s 901 complaints that were concluded prior to the 2017-18 report cut-off date, 757, or 84 per cent, were resolved at the pre-investigation stage,” the statement said.

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Real Estate

5 ways to reduce your mortgage amortization

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Since the pandemic hit, a lot of Canadians have been affected financially and if you’re on a mortgage, reducing your amortization period can be of great help.

A mortgage amortization period is the amount of time it would take a homeowner to completely pay off their mortgage. The amortization is typically an estimate based on what the interest rate for your current term is. Calculating your amortization is done easily using a loan amortization calculator which shows you the different payment schedules within your amortization period.

 In Canada, if you made a down payment that is less than the recommended 20 per cent of the total cost of your home, then the longest amortization period you’re allowed to have is 25 years. The mortgage amortization period not only affects the length of time it would take to completely repay the loan, but also the amount of interest paid over the lifecycle of the mortgage.

Typically, longer amortization periods involve making smaller monthly payments and having a much higher total interest cost over the duration of the mortgage. While on the other hand, shorter amortization periods entails making larger monthly payments and having lower total interest costs.

It’s the dream of every homeowner to become mortgage-free. A general rule of thumb would be to try and keep your monthly mortgage costs as low as possible—preferably below 30 per cent of your monthly income. Over time, you may become more financially stable by either getting a tax return, a bonus or an additional source of income and want to channel that towards your principal.

There are several ways to keep your monthly mortgage payments low and reduce your amortization. Here are a few ways to achieve that goal:

1. Make a larger down payment

Once you’ve decided to buy a home, always consider putting asides some significant amount of money that would act as a down payment to reduce your monthly mortgage. While the recommended amount to put aside as a down payment is 20 per cent,  if you aren’t in a hurry to purchase the property or are more financial buoyant, you can even pay more.

Essentially, the larger your down payment, the lower your mortgage would be as it means you’re borrowing less money from your lender. However, if you pay at least 20 per cent upfront, there would be no need for you to cover the additional cost of private mortgage insurance which would save you some money.

2. Make bi-weekly payments

Most homeowners make monthly payments which amount to 12 payments every year. But if your bank or lender offers the option of accelerated bi-weekly payment, you will be making an equivalent of one more payment annually. Doing this will further reduce your amortization period by allowing you to pay off your mortgage much faster.

3. Have a fixed renewal payment

It is normal for lenders to offer discounts on interest rate during your amortization period. However, as you continuously renew your mortgage at a lower rate, always keep a fixed repayment sum.

Rather than just making lower payments, you can keep your payments static, since the more money applied to your principal, the faster you can clear your mortgage.

4. Increase your payment amount

Many mortgages give homeowners the option to increase their payment amount at least once a year. Now, this is very ideal for those who have the financial capacity to do so because the extra money would be added to your principal.

Irrespective of how small the increase might be, in the long run, it would make a huge difference. For example, if your monthly mortgage payment is about $2,752 per month. It would be in your best interest to round it up to $2,800 every month. That way, you are much closer to reducing your mortgage amortization period.

5. Leverage on prepayment privileges

The ability for homeowners to make any form of prepayment solely depends on what mortgage features are provided by their lender.

With an open mortgage, you can easily make additional payments at any given time. However, if you have a closed mortgage—which makes up the larger percentage of existing mortgages—you will need to check if you have the option of prepayments which would allow you to make extra lump sum payments.

Additionally, there may also be the option to make extra lump sum payments at the end of your existing mortgage term before its time for renewal.

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Real Estate

Mortgage insurance vs. life insurance: What you need to know

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Your home is likely the biggest asset you’ll ever own. So how can you protect it in case something were to happen to you? To start, homeowners have a few options to choose from. You can either:

  • ensure you have mortgage protection with a life insurance policy from an insurance company or
  • get mortgage insurance from a bank or mortgage lender.

Mortgage insurance vs. life insurance: How do they each work?  

The first thing to know is that life insurance can be a great way to make sure you and your family have mortgage protection.

The money from a life insurance policy usually goes right into the hands of your beneficiaries – not the bank or mortgage lender. Your beneficiaries are whoever you choose to receive the benefit or money from your policy after you die.

Life insurance policies, like term life insurance, come with a death benefit. A death benefit is the amount of money given to your beneficiaries after you die. The exact amount they’ll receive depends on the policy you buy.

With term life insurance, you’re covered for a set period, such as 10, 15, 20 or 30 years. The premium – that’s the monthly or annual fee you pay for insurance – is usually low for the first term.

If you die while you’re coved by your life insurance policy, your beneficiaries will receive a tax-free death benefit. They can then use this money to help pay off the mortgage or for any other reason. So not only is your mortgage protected, but your family will also have funds to cover other expenses that they relied on you to pay.

Mortgage insurance works by paying off the outstanding principal balance of your mortgage, up to a certain amount, if you die.

With mortgage insurance, the money goes directly to the bank or lender to pay off the mortgage – and that’s it. There’s no extra money to cover other expenses, and you don’t get to leave any cash behind to your beneficiaries.

What’s the difference between mortgage insurance and life insurance?

The main difference is that mortgage insurance covers only your outstanding mortgage balance. And, that money goes directly to the bank or mortgage lender, not your beneficiary. This means that there’s no cash, payout or benefit given to your beneficiary. 

With life insurance, however, you get mortgage protection and more. Here’s how it works: every life insurance policy provides a tax-free amount of money (the death benefit) to the beneficiary. The payment can cover more than just the mortgage. The beneficiary may then use the money for any purpose. For example, apart from paying off the mortgage, they can also use the funds from the death benefit to cover:

  • any of your remaining debts,
  • the cost of child care,
  • funeral costs,
  • the cost of child care, and
  • any other living expenses. 

But before you decide between life insurance and mortgage insurance, here are some other important differences to keep in mind:

Who gets the money?

With life insurance, the money goes to whomever you name as your beneficiary.

With mortgage insurance, the money goes entirely to the bank.

Can you move your policy?

With life insurance, your policy stays with you even if you transfer your mortgage to another company. There’s no need to re-apply or prove your health is good enough to be insured.

With mortgage insurance, however, your policy doesn’t automatically move with you if you change mortgage providers. If you move your mortgage to another bank, you’ll have to prove that your health is still good.

Which offers more flexibility, life insurance or mortgage insurance?

With life insurance, your beneficiaries have the flexibility to cover the mortgage balance and more after you die. As the policy owner, you can choose how much insurance coverage you want and how long you need it. And, the coverage doesn’t decline unless you want it to.

With mortgage insurance through a bank, you don’t have the flexibility to change your coverage. In this case, you’re only protecting the outstanding balance on your mortgage.

Do you need a medical exam to qualify? 

With a term life insurance policy from Sun Life, you may have to answer some medical questions or take a medical exam before you’re approved for coverage. Once you’re approved, Sun Life won’t ask for any additional medical information later on.

With mortgage insurance, a bank or mortgage lender may ask some medical questions when you apply. However, if you make a claim after you’re approved, your bank may ask for additional medical information.* At that point, they may discover some conditions that disqualify you from receiving payment on a claim.

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Real Estate

5 common mistakes Canadians make with their mortgages

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This article was created by MoneyWise. Postmedia and MoneyWise may earn an affiliate commission through links on this page.

Since COVID-19 dragged interest rates to historic lows last year, Canadians have been diving into the real estate market with unprecedented verve.

During a time of extraordinary financial disruption, more than 551,000 properties sold last year — a new annual record, according to the Canadian Real Estate Association. Those sales provided a desperately needed dose of oxygen for the country’s gasping economy.

Given the slew of new mortgages taken out in 2020, there were bound to be slip-ups. So, MoneyWise asked four of the country’s sharpest mortgage minds to share what they feel are the mistakes Canadians most frequently make when securing a home loan.

Mistake 1: Not having your documents ready

One of your mortgage broker’s primary functions is to provide lenders with paperwork confirming your income, assets, source of down payment and overall reliability as a borrower. Without complete and accurate documentation, no reputable lender will be able to process your loan.

But “borrowers often don’t have these documents on hand,” says John Vo of Spicer Vo Mortgages in Halifax, Nova Scotia. “And even when they do provide these documents, they may not be the correct documentation required.”

Some of the most frequent mistakes Vo sees when borrowers send in their paperwork include:

  • Not including a name or other relevant details on key pieces of information.
  • Providing old bank or pay statements instead of those dated within the last 30 days.
  • Sending only a partial document package. If a lender asks for six pages to support your loan, don’t send two. If you’re asked for four months’ worth of bank statements, don’t provide only one.
  • Thinking low-quality or blurry files sent by email or text will be good enough. Lenders need to be able to read what you send them.

If you send your broker an incomplete documents package, the result is inevitable: Your mortgage application will be delayed as long as it takes for you to find the required materials, and your house shopping could be sidetracked for months.

Mistake 2: Blinded by the rate

Ask any mortgage broker and they’ll tell you that the question they’re asked most frequently is: “What’s your lowest rate?”

The interest rate you’ll pay on your mortgage is a massive consideration, so comparing the rates lenders are offering is a good habit once you’ve slipped on your house-hunter hat.

Rates have been on the rise lately given government actions to stimulate the Canadian economy. You may want to lock a low rate now, so you can hold onto it for up to 120 days.

But Chris Kolinski, broker at Saskatoon, Saskatchewan-based iSask Mortgages, says too many borrowers get obsessed with finding the lowest rate and ignore the other aspects of a mortgage that can greatly impact its overall cost.

“I always ask my clients ‘Do you want to get the best rate, or do you want to save the most money?’ because those two things are not always synonymous,” Kolinski says. “That opens a conversation about needs and wants.”

Many of the rock-bottom interest rates on offer from Canadian lenders can be hard to qualify for, come with limited features, or cost borrowers “a ton” of money if they break their terms, Kolinski points out.

Mistake 3: Not reading the fine print

Dalia Barsoum of Streetwise Mortgages in Woodbridge, Ontario, shares a universal message: “Read the fine print. Understand what you’re signing up for.”

Most borrowers don’t expect they’ll ever break their mortgages, but data collected by TD Bank shows that 7 in 10 homeowners move on from their properties earlier than they expect.

It’s critical to understand your loan’s prepayment privileges and the rules around an early departure. “If you exit the mortgage, how much are you going to pay? It’s really, really important,” Barsoum says.

She has seen too borrowers come to her hoping to refinance a mortgage they received from a private or specialty lender, only to find that what they were attempting was impossible.

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