A little-known credit card benefit offers consumers protection from financial loss.
The business failure of Kleenmaid has left 4500 customers who have placed deposits on $27 million for goods not delivered may get some relief, if they act quickly. You have only a 75 day window from the transaction to make a claim. Eftpos users are also protected.
It appears that Kleenmaid were trading whilst insolvent, not that this seems to worry companies these days.
But here's the good news. Any customer who paid using a credit card [or debit card ]can use their card issuer's chargeback facility to get a full refund. I knew having a credit card had to be useful for something, and I have used this fact myself when buying online and not getting what I paid for.
Chargeback covers services or goods that have been paid for but not supplied.
If it happens you must notify your card issuer, which will investigate the case.
When it is satisfied you are entitled to reverse the transaction, it will credit your account. Because the bank has to look into the matter, it can take a couple of weeks to get the money back. In the case of Kleenmaid there is not much to look into.
The card issuer will then chase the merchant's bank (called the acquiring bank, in payment system jargon) to recover that money. In the card-payment world, the acquiring bank stands behind its merchant customer and has to make good when the sale of goods or services already paid for does not proceed.
Card companies including Visa, Amex and Mastercard were also reported saying customers should be able to get their money back.
Any consumer whose transaction card carries a MasterCard or Visa logo has access to the scheme debit system as well as to Eftpos.
It gets tricky because access to the two systems is through the same card and the same point of sale terminal.
If you press "credit" when you make a payment you are using scheme debit; if you press "savings" or "cheque" you are using Eftpos. Consumers who use the scheme debit system get the same protection as users of MasterCard and Visa credit cards, including chargebacks.
As we said earlier, it's important to notify the card issuer if a chargeback is required quickly. In most cases customers have 75 days, after which the issuer will not reverse the transaction.
Chargebacks are not just for reversing transactions where the goods or services are not supplied. They are also used to correct duplicate billing, to fix a bank processing error or to deal with fraud in cases where customers did not authorise a purchase on their card.
So lodge your claim and good luck!
Thursday, April 30, 2009
Property Investors see opportunity in housing needs
Australian residential property is again being viewed as a solid investment, even though low mortgage interest rates won't last forever. This is good news for mortgage brokers who work with investors.
The home construction slow down over the last 12 months hurt mortgage brokers in the area, but that in turn has created a tight rental market and investors are back in the game.
In fact the combination of low interest rates, high rent returns and low prices can produce ,"positively geared" investments. This means two things. Property can be attractive to lower income earners without tax to offset,to be a money making proposition from day one.
This means low capital growth is not a deterrent, and this could be the case over the next few years.
At the end of the day people need somewhere to live and keep their stuff.
If they can't afford to buy, they rent and that means that there will always be people who need to rent in areas with schools, transport and near work.
The home construction slow down over the last 12 months hurt mortgage brokers in the area, but that in turn has created a tight rental market and investors are back in the game.
In fact the combination of low interest rates, high rent returns and low prices can produce ,"positively geared" investments. This means two things. Property can be attractive to lower income earners without tax to offset,to be a money making proposition from day one.
This means low capital growth is not a deterrent, and this could be the case over the next few years.
At the end of the day people need somewhere to live and keep their stuff.
If they can't afford to buy, they rent and that means that there will always be people who need to rent in areas with schools, transport and near work.
Australians suffer relative interest rates rise as Australian Banks siphon off the cream for themselves.
It's an Australian pastime to bag the banks I know, but they deserve a special mention for their conduct over the past few interest rate drops where they have sought to siphon off rate cuts meant for customers for their own profit margins.
Yes, they are able to pass on the full rate cuts. They can't be trusted and should not be placed in a position where they can decide not to pass on rate cuts if they choose not to.
The problem is twofold.
Firstly they are answerable to no one. Where's this regulation they talk about?
Secondly that they don't have the competition they used to because:
Yes, they are able to pass on the full rate cuts. They can't be trusted and should not be placed in a position where they can decide not to pass on rate cuts if they choose not to.
The problem is twofold.
Firstly they are answerable to no one. Where's this regulation they talk about?
Secondly that they don't have the competition they used to because:
- Second tier lenders can't get the same rates they enjoy due to drops in State Credit ratings, and thus regional lenders ratings.
- Many of their competitors in the securitised mortgage market can't get funds like they used to.
What Australia needs is a Government sponsored mortgage manager such as Freddie Mac and Fannie Mae in the US so that they can get Government backed funds at competitive rates so that competitive funds can be controlled by the Government and a healthy regulated Mortgage broking industry.
This would produce more jobs and make the construction industry less uncertain and give Australians a better deal to buy their own home.
The Four Major Banks have had to too good for too long. Its time to cut the fat.
Channel Seven's Today Tonight show dragged through the courts over dodgy investment gurus programs kickbacks
The oldest scam in the book is to "let people in on a secret to get rich".
If you knew a secret that did this you would be too busy using the knowledge and counting the money to tell anyone. Unless your secret to wealth is to in fact make money from people that you dupe into believing that you are in fact a nice person and want to help. To do this you need a prop. Something that gives you the trust factor. Makes you appear legit. Enter Australian Media Giant Channel Seven.
Well in appears that a program on a broadcasting station that most would trust was found to be taking kickbacks from the people sucked in by lies, and they were targeting women no less."The High Court of Australia has found a television current affairs program, broadcast by Channel Seven, breached trade practices laws by entering into a deal for exclusive get-rich-quick stories.
In October 2003 and January 2004 the Seven Network's Today Tonight program broadcast exclusive stories on an investment mentoring program called Wildly Wealthy Women (WWW). The exclusives were organised with Today Tonight by a "marketeer" who had made arrangements with WWW to receive a commission for every woman who signed up to the investment program.
The Today Tonight programs stated that participants in the WWW program would become millionaires through investing in property, even if they had no money to start with.
The Australian Competition and Consumer Commission (ACCC) took action, saying the TV program had no reasonable grounds to make such assertions.
The Seven Network did not dispute that the programs contained untrue claims about the wealth and assets of the two women who were offering the training.
Nor did it dispute that certain representations made in the episodes were misleading and deceptive."
But the Full Court of the Federal Court in June 2008 found the media exemption in the Trade Practices Act - sometimes known as the ''media safe-harbour'' protection - did apply to the Seven Network's broadcast.
So, whilst Section 52 of the Act bans a corporation from engaging in misleading or deceptive conduct, there is an exemption for ''prescribed information providers'', such as broadcasters.
The ACCC argued in the High Court that because of the arrangement made between the network and WWW to broadcast the program, the broadcast was not covered by the exemption. That is, the financial arrangement precluded from from protection.
A majority of members of the High Court on Thursday found the exemption did not apply to situations in which a media outlet publishes matter in relation to ''goods or services where the publication is subject to an arrangement with a supplier of goods or services''.
The High Court allowed the ACCC's appeal, set aside the Full Court's orders and restored the orders made by the original Federal Court judge in 2007 who came down in favour of the ACCC.
Mr Mortgage says shame on you Channel Seven. You thought you could use the law to find a loophole to slide your way out of your responsibilities as a broadcaster.So why are you allowed to still broadcast?
Scammers are everywhere in Australia these days. They are even on your TV, the last place you expect to find them pulling a fast one. But it is the best place to do just that, because the scammer gets the "halo effect" of trust they comes with television. Not any more. No wonder I mostly watch non commercial TV these days.
I have had my "BS" detectors on for years.
If you knew a secret that did this you would be too busy using the knowledge and counting the money to tell anyone. Unless your secret to wealth is to in fact make money from people that you dupe into believing that you are in fact a nice person and want to help. To do this you need a prop. Something that gives you the trust factor. Makes you appear legit. Enter Australian Media Giant Channel Seven.
Well in appears that a program on a broadcasting station that most would trust was found to be taking kickbacks from the people sucked in by lies, and they were targeting women no less."The High Court of Australia has found a television current affairs program, broadcast by Channel Seven, breached trade practices laws by entering into a deal for exclusive get-rich-quick stories.
In October 2003 and January 2004 the Seven Network's Today Tonight program broadcast exclusive stories on an investment mentoring program called Wildly Wealthy Women (WWW). The exclusives were organised with Today Tonight by a "marketeer" who had made arrangements with WWW to receive a commission for every woman who signed up to the investment program.
The Today Tonight programs stated that participants in the WWW program would become millionaires through investing in property, even if they had no money to start with.
The Australian Competition and Consumer Commission (ACCC) took action, saying the TV program had no reasonable grounds to make such assertions.
The Seven Network did not dispute that the programs contained untrue claims about the wealth and assets of the two women who were offering the training.
Nor did it dispute that certain representations made in the episodes were misleading and deceptive."
But the Full Court of the Federal Court in June 2008 found the media exemption in the Trade Practices Act - sometimes known as the ''media safe-harbour'' protection - did apply to the Seven Network's broadcast.
So, whilst Section 52 of the Act bans a corporation from engaging in misleading or deceptive conduct, there is an exemption for ''prescribed information providers'', such as broadcasters.
The ACCC argued in the High Court that because of the arrangement made between the network and WWW to broadcast the program, the broadcast was not covered by the exemption. That is, the financial arrangement precluded from from protection.
A majority of members of the High Court on Thursday found the exemption did not apply to situations in which a media outlet publishes matter in relation to ''goods or services where the publication is subject to an arrangement with a supplier of goods or services''.
The High Court allowed the ACCC's appeal, set aside the Full Court's orders and restored the orders made by the original Federal Court judge in 2007 who came down in favour of the ACCC.
Mr Mortgage says shame on you Channel Seven. You thought you could use the law to find a loophole to slide your way out of your responsibilities as a broadcaster.So why are you allowed to still broadcast?
Scammers are everywhere in Australia these days. They are even on your TV, the last place you expect to find them pulling a fast one. But it is the best place to do just that, because the scammer gets the "halo effect" of trust they comes with television. Not any more. No wonder I mostly watch non commercial TV these days.
I have had my "BS" detectors on for years.
Friday, April 17, 2009
Debt relief' made easy for credit card users as more middle class earners declare bankruptcy
Middle class and high income earners are increasingly taking advantage of cheap and easy insolvencies to escape credit card debt and go bankrupt.
Australia is experiencing a boom in insolvency activity and Victoria is the epicentre of the debt crisis. In the three months to March 31 this year the number of consumer debt agreements entered into skyrocketed up by almost 40 per cent, compared with the same period last year. Bankruptcies were also up 16 per cent, with the vast majority of those being non-business related. Personal insolvency agreements, which are generally undertaken by higher income earners who cannot repay consumer debts, jumped up by more than 50 per cent off a low base. The Insolvency and Trustee Service Australia reports that total insolvency activity was up 18 per cent across the nation in the March quarter. But the Victorian statistics are particularly alarming with total insolvency activity up more than 22 per cent. Only Tasmania showed more growth than Victoria in the numbers of people who cannot repay their debts. Debt counsellors say bankruptcy is a relatively cheap and easy option for people who have lost their job and cannot repay their debts."Bankruptcy can be a pretty cheap option if there are no real assets and no capacity to pay," says John Beecroft, an insolvency specialist in South Yarra."We do the paperwork and send it off to the Insolvency and Trustee Service where it is basically a paper entry."
Digby Ross, the official receiver at ITSA, agrees that bankruptcy can be a cheap and easy option for debtors. "It is a fairly straightforward process," says Mr Ross."They have to prepare a one-page petition and a statement of affairs covering their creditors, any property they have, and their personal details."That is filed with us and when it is accepted the person is bankrupt.
There are no court appearances required."A bankrupt person is generally denied credit for three years. A permanent record of the bankruptcy is placed on the National Personal Insolvency Index, an electronic public register. John Beecroft from debt assist says there has been a noticeable change in the type of people asking for assistance in the past few months."When rates and fuel prices were high we were seeing lots of people from the outer suburbs, now we are seeing more from middle class suburbs and above. "People who have used their credit cards to buy shares and had a margin call is pretty common -- or property investments that have gone wrong," said Mr Beecroft. Bankruptcy is a common option for people losing their jobs, he says.
Australia is experiencing a boom in insolvency activity and Victoria is the epicentre of the debt crisis. In the three months to March 31 this year the number of consumer debt agreements entered into skyrocketed up by almost 40 per cent, compared with the same period last year. Bankruptcies were also up 16 per cent, with the vast majority of those being non-business related. Personal insolvency agreements, which are generally undertaken by higher income earners who cannot repay consumer debts, jumped up by more than 50 per cent off a low base. The Insolvency and Trustee Service Australia reports that total insolvency activity was up 18 per cent across the nation in the March quarter. But the Victorian statistics are particularly alarming with total insolvency activity up more than 22 per cent. Only Tasmania showed more growth than Victoria in the numbers of people who cannot repay their debts. Debt counsellors say bankruptcy is a relatively cheap and easy option for people who have lost their job and cannot repay their debts."Bankruptcy can be a pretty cheap option if there are no real assets and no capacity to pay," says John Beecroft, an insolvency specialist in South Yarra."We do the paperwork and send it off to the Insolvency and Trustee Service where it is basically a paper entry."
Digby Ross, the official receiver at ITSA, agrees that bankruptcy can be a cheap and easy option for debtors. "It is a fairly straightforward process," says Mr Ross."They have to prepare a one-page petition and a statement of affairs covering their creditors, any property they have, and their personal details."That is filed with us and when it is accepted the person is bankrupt.
There are no court appearances required."A bankrupt person is generally denied credit for three years. A permanent record of the bankruptcy is placed on the National Personal Insolvency Index, an electronic public register. John Beecroft from debt assist says there has been a noticeable change in the type of people asking for assistance in the past few months."When rates and fuel prices were high we were seeing lots of people from the outer suburbs, now we are seeing more from middle class suburbs and above. "People who have used their credit cards to buy shares and had a margin call is pretty common -- or property investments that have gone wrong," said Mr Beecroft. Bankruptcy is a common option for people losing their jobs, he says.
Mortgage Brokers expected to boom as home owners seek to refinance after RBA's interest rate cut
Mortgage Brokers are expected to be busy as home owners refinance from high fixed-rate mortgages after yesterday's 25-basis-point interest rate cut, coupled with high real estate sales figures in the low cost areas.
The sticking point for many will be hefty fixed rate "break fees", which can be more than $20,000 on a $500,000 home loan.
Break fees, made up of a comparatively small charge to exit the loan plus a bigger fee that is the economic cost to the bank of losing the business, had become a bigger proportion of housing loan fees in recent years, he said.
The Housing Industry Association yesterday called on banks to drop severance and other refinancing charges from fixed-rate loans, but banks are unlikely to do so.
HIA chief executive Chris Lamont said banks would be swamped with borrowers trying to refinance.
A home loan taken out early last year when mortgage rates were 7.5-8 per cent would cost a borrower about $670 a month more on a $250,000 home loan, than if the loan were taken out today, he said.
Mr Lamont believes yesterday's drop in the cash rate will have little impact on the housing market, even if passed on by the banks, as buyers already believe mortgage rates are reaching the bottom of the cycle.
"Falling interest rates are now being overshadowed by the availability of finance, with the banks asking for higher deposits, particularly from first-home buyers," he said.
Real estate agents are reporting increased home sales, particularly for lower-priced property, with Australia's biggest agent, Ray White, making $2.37billion of sales last month, a 15 per cent rise on the same month last year.
The sticking point for many will be hefty fixed rate "break fees", which can be more than $20,000 on a $500,000 home loan.
Break fees, made up of a comparatively small charge to exit the loan plus a bigger fee that is the economic cost to the bank of losing the business, had become a bigger proportion of housing loan fees in recent years, he said.
The Housing Industry Association yesterday called on banks to drop severance and other refinancing charges from fixed-rate loans, but banks are unlikely to do so.
HIA chief executive Chris Lamont said banks would be swamped with borrowers trying to refinance.
A home loan taken out early last year when mortgage rates were 7.5-8 per cent would cost a borrower about $670 a month more on a $250,000 home loan, than if the loan were taken out today, he said.
Mr Lamont believes yesterday's drop in the cash rate will have little impact on the housing market, even if passed on by the banks, as buyers already believe mortgage rates are reaching the bottom of the cycle.
"Falling interest rates are now being overshadowed by the availability of finance, with the banks asking for higher deposits, particularly from first-home buyers," he said.
Real estate agents are reporting increased home sales, particularly for lower-priced property, with Australia's biggest agent, Ray White, making $2.37billion of sales last month, a 15 per cent rise on the same month last year.
Thursday, April 16, 2009
Banks selling people into unstainable debt
Buying a home is the best investment you can make, and it may seen like the right thing to do for the economy, but what is the best for you?
Homes are still high in value, maybe too high, and just because your bank will lend you big bucks [nearly $500,000] on small incomes of as low as [$80,000] does the 30 year mortgage make sense to you in these times?
First time home buyers are being warned that generous loan criteria offered by banks could land them in mortgage stress for many years to come.
Buying a low cost home is the better option with joint incomes under $100,000.
Use the Rule of Three
Try to use the rule of three. If you earn $100,000 as a gross income, then you can aford a $300,000 mortgage even when interestrates reach 9%. If you earn $200,000, then you can easily afford a $600,000 mortgage [even if you wisely decide that you don't want this much financial burden]. The solution to buying a more expensive home should be greater earnings, not loose lending.
Buying the biggest home you can afford during the lowest interest rates in history ever is foolish nad may come back to bite you, and the banks should know better, and in my view they may be taking advantage of young inexperienced home buyers without letting them know the consquences of interest rate rises, their other financial commitments that are hidden inside each mortgage document, and the banks foreclosure policy should they fail to make repayments.
Buying a home on the basis that prices and demand will surely rise may be a myth from the past echoes of the baby boomers last gasp.
Homes are still high in value, maybe too high, and just because your bank will lend you big bucks [nearly $500,000] on small incomes of as low as [$80,000] does the 30 year mortgage make sense to you in these times?
First time home buyers are being warned that generous loan criteria offered by banks could land them in mortgage stress for many years to come.
Buying a low cost home is the better option with joint incomes under $100,000.
Use the Rule of Three
Try to use the rule of three. If you earn $100,000 as a gross income, then you can aford a $300,000 mortgage even when interestrates reach 9%. If you earn $200,000, then you can easily afford a $600,000 mortgage [even if you wisely decide that you don't want this much financial burden]. The solution to buying a more expensive home should be greater earnings, not loose lending.
Buying the biggest home you can afford during the lowest interest rates in history ever is foolish nad may come back to bite you, and the banks should know better, and in my view they may be taking advantage of young inexperienced home buyers without letting them know the consquences of interest rate rises, their other financial commitments that are hidden inside each mortgage document, and the banks foreclosure policy should they fail to make repayments.
Buying a home on the basis that prices and demand will surely rise may be a myth from the past echoes of the baby boomers last gasp.
Will 30,000 Australian homes be repossessed by Christmas 2009?
For over 100,000 Australian's the dream of homeownership could turn sour as sources expect that 30,000 homes will be repossessed or mortgages foreclosed on as almost half a million Australians are plunged into severe mortgage stress by the end of the year.
Are you suffering Mortgage Stress?
And around a third of the expected repossessions will be first time home buyers who bought in the last 12 months, the Mortgage Stress report predicts.
According to News.com.au the report estimates that 30,741 homes will be repossessed or subject to foreclosure - where a lender takes control of a mortgaged property and holds a forced sale - and 497,168 homeowners will be in “severe mortgage stress” by December.
These forecasts are based on the unemployment rate rising 7.5 per cent by the end of the year. [Some people are saying 9% by 2010 could be the reality if the recession deepens].
The Federal Government predicts the unemployment rate will rise to 7 per cent by mid-2010, meaning an extra 300,000 jobless.
Government Subsidies and lower interest rates have helped.The Fujitsu Mortgage Stress report takes into account the decline in the number of home owners facing potential sale or foreclosures from 164,590 homes in February to 96,532 in March due to Federal Government handouts and lower interest rates.
If you lose your job, apply for benefits the same day!
Our advice is that home owners should seek financial assistance early if they feared trouble ahead, and to let creditors and bankers know that you cannot meet your commitments as soon as you know..
Also if the worst happens and lose your job, then apply for benefits on the same day of termination and make sure that you have all the necessay paperwork with you when you go to Centrelink. This will get your benefits in your bank account as soon as possible.
If your mortgage is too great a burden move quickly to effect a sale.
Should you need to sell your home, don't wait for the eviction notice. Move quickly to have your on the market for the longest time possible to get the best possible offer. Waiting for something to turn up may be the worst option and will damage your credit.
Weigh things up. How much cash do you have on hand? How long will you be out of work? Will your home be worth more of less in 12 months from now?
Doing these things will give you certainty of mind and free you to look for work in a more determined frame of mind.
Are you suffering Mortgage Stress?
And around a third of the expected repossessions will be first time home buyers who bought in the last 12 months, the Mortgage Stress report predicts.
According to News.com.au the report estimates that 30,741 homes will be repossessed or subject to foreclosure - where a lender takes control of a mortgaged property and holds a forced sale - and 497,168 homeowners will be in “severe mortgage stress” by December.
These forecasts are based on the unemployment rate rising 7.5 per cent by the end of the year. [Some people are saying 9% by 2010 could be the reality if the recession deepens].
The Federal Government predicts the unemployment rate will rise to 7 per cent by mid-2010, meaning an extra 300,000 jobless.
Government Subsidies and lower interest rates have helped.The Fujitsu Mortgage Stress report takes into account the decline in the number of home owners facing potential sale or foreclosures from 164,590 homes in February to 96,532 in March due to Federal Government handouts and lower interest rates.
If you lose your job, apply for benefits the same day!
Our advice is that home owners should seek financial assistance early if they feared trouble ahead, and to let creditors and bankers know that you cannot meet your commitments as soon as you know..
Also if the worst happens and lose your job, then apply for benefits on the same day of termination and make sure that you have all the necessay paperwork with you when you go to Centrelink. This will get your benefits in your bank account as soon as possible.
If your mortgage is too great a burden move quickly to effect a sale.
Should you need to sell your home, don't wait for the eviction notice. Move quickly to have your on the market for the longest time possible to get the best possible offer. Waiting for something to turn up may be the worst option and will damage your credit.
Weigh things up. How much cash do you have on hand? How long will you be out of work? Will your home be worth more of less in 12 months from now?
Doing these things will give you certainty of mind and free you to look for work in a more determined frame of mind.
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