Friday 24 October 2008

Comsec Margin Lending Customer Service dives along with the market

Big Banks are often accused of treating their customers with contempt when chasing profits. Comsec Margin Lending just provided a fresh example of this. When I logged in to my margin loan account this morning to check how close I am to getting a margin call, I noticed this new notice appearing on the "welcome" page:

"Loan Summary:

If you trigger a margin call that is below $5,000, please expect an SMS text message as notification of that margin call. Failure to act on this SMS notice will result in a sell down of a portion of your portfolio to cover the appropriate margin call obligation.

It is your responsibility to provide us with your latest contact details. Failure to do so may result in you not receiving notification of a margin call. To update your contact details, simply click on ‘Profile’ under the ‘Quick Links’ section on the top left of the website."

In other words, since they don't have my mobile phone number on record (and it's often turned off anyhow), I may not get contacted before they start liquidating my investments to meet a margin call!

In contrast, I have a very small CFD trading account with CityIndex that I opened with just $100 (and got another $500 added to the account by CityIndex for opening an account after attending their seminar). I had created a portfolio of ten Australian stock CFDs in that account, and the market crash of the past two weeks saw it get a couple of margin calls, then get liquidated (I owe them just over $100 now to settle the account). However. even though the account was for a Small amount, and the margin call was only $100 or so, I received several liquidation warnings from CityIndex via email AND I received a phone call from a real human being to warn me that I had a margin call to meet to avoid my positions being liquidated.

Compared to that, the customer service at Comsec is really poor.

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