Arghhh! When Fine Print Attacks

Today I spent an infuriating hour on the phone trying to recover over $100 from two cases of fine-printitis. The first one came about when I checked my mobile phone bill email. Rather than the usual $28 monthly fee for DW and my mobile phones, the February bill was over $60. I quickly scanned through the items and found that there was $40.50 charged for 9 'premium' SMS messages to DW's mobile number. I called customer service to complain about this charge, thinking it must be a billing error since we never use SMS, let alone "premium" SMS, whatever that is.

The CSR didn't help much, simply telling me that the premium SMS service was from a third party, so they couldn't cancel the charges. She suggested I call the 'help' number listed against the SMS items. When I called the 'help' number I simply got a recorded message prompting me to enter the mobile phone number in question. Since I didn't think we had signed up for this service in the first place I didn't want to enter our mobile number in case it just triggered an avalanche of other spam SMS messaging.

After searching the internet for the 'premium' SMS number in question, I found a forum thread containing numerous examples of people who had similar problems with unwanted SMS messaging services being billed to their phone account. I did find a different customer service number for the SMS messaging service, but a call to that number also just got a recorded message (after waiting on hold for 10 minutes for 'the next available operator').

Having wasted half an hour trying to contact the SMS provider, I called back my mobile phone service to complain (and threaten to call consumer affairs). This prompted my mobile phone service to call the SMS company themselves, and soon after a got a conference call back from both the mobile phone and SMS CSRs. It turned out that DW may have provided her mobile phone number on 30 Jan when she signed up for a "Free" $2,000 prize draw on the internet. The mobile phone number was required to SMS her a 'confirmation PIN number' for the contest - but DW didn't read the fine print that by entering the "free" competition she was also signing up for a $4.50 per message SMS service! She'd been getting (and ignoring) the SMS messages that had been coming every second day, thinking that they were just spam!

The conference call wound up with the SMS company asking my mobile phone company to email them requesting a transcript of the internet log showing when we subscribed for the premium SMS service. My mobile phone service will then forward the email to me.

I suspect that we'll end up having to pay the $50 or so in SMS charges accumulated before the SMS 'subscription' was cancelled today. I asked my mobile phone company to block the SMS facility on our account, and I may write to consumer affairs to complain about this scam.

The second case of costly fine print came later in the day when I received a call from NetTab (an online betting service) regarding the 'forgotten password' request I emailed on Monday. I had signed up for online betting way back in 2002 in order to bet a few dollars on the Melbourne Cup race, putting $50 into the account. After the initial wager I hadn't been able to log in to the account and had received a letter saying that the account wasn't 'active' until I provided identification at one of the TAB outlets. Since I'm not a regular gambler I put off visiting a TAB office with my paperwork for several years until another Melbourne Cup Day was approaching. When I finally had my identification confirmed, I was told not to go online and activate the account until I wanted to place a bet, as otherwise I start being charged a monthly fee.

When I got the call from NetTab today, I was informed that my account had been closed in 2007, after my $50 had been totally consumed by a monthly $5.50 "inactive account" management fee! I think it is absurd to be charged a monthly fee for not using an account that I didn't have access to until my ID had been provided, and I also don't recall reading anything about this fee when I originally joinged in 2002. In the end I talked to a supervisor who promised to try to locate a copy of the Terms and Conditions that were in effect when I joined online in 2002, and mail them to me. I doubt that I'll get my $50 refunded, but I suspect that the customer service call cost NetTab more than $50, which is some small compensation.

Subscribe to Enough Wealth. Copyright 2006-2008

Wealthy Pensioners to Pay the Price

As reported by the SMH and elsewhere, it appears likely that eligibility conditions to receive the pension in Australia will be tightened in order to cover the cost of raise the rate for Single pensioners to 67% of the Couples Pension rate (it's currently 50%).

The driver for these changes are, as usual with a Labor government in power, "Equity" considerations. The current pension assets and income tests mean that some relatively wealthy seniors are being paid a pension. Labor is firmly against the idea of "middle class welfare".

Ignoring the fact that the "wealthy pensioners" are the same cohort that probably paid nearly all of the taxes that provided the pension to the previous generation of pensioners, I have to question the fairness of any "equity" argument that only looks at the current snapshot of people's situation.

A moral, compassionate society should obviously care for the paupers, widows and orphans, sick and demented that would otherwise end up starving and homeless. However, the provision of pensions is extended to a much wider group of people, raising the question of who actually 'deserves' to get a pension. As is often the case, equality of opportunity is being confused with equality of outcome.

Consider the hypothetical cases of Bob and Bert, two 70-year old retired bus drivers. Both are married, have two grown up kids, and rely on the pension for their retirement income. However, Bert is living in rented accommodation, and has a much lower standard of living (less disposable income) than Bob, who is living in a modest house with no mortgage. The value of Bob's home is currently not included in the assets pension test, but that may soon change, severely reducing or possibly eliminating his pension income.

However, is this really fair? Bob worked to 45 years, paid his taxes, and lived a fairly frugal lifestyle so he could afford the mortgage repayments on his family home. At the same time, Bert has always rented his accommodation, and enjoyed consuming his higher disposable income while he was working. Although they had exactly the same take-home pay, Bert was dining out and going to the theatre each week, while Bob was drinking beer in front of the TV and worrying about his mortgage repayments. For some reason, Labor thinks it's "inequitable" that Bob can now afford to dine out and go to the theatre using his pension income, while most of Bert's pension income is being spent on his rent.

To my mind, since both Bob and Bert earned the same income and paid the same amount of taxes over their working lives, they are both equally entitled to receive a pension. Having blown your income at the race track or down the pub very Friday night should not make someone more 'deserving' of a pension.

Australia already has moved some way towards a self-funded retirement system, with compulsory superannuation ensuring that in future generations the Bert's and Bob's of the world will have both accumulated similar retirement savings and neither will require (or get) a government (tax-payer funded) pension. In the meantime, I can't see the justification to take money out of Bob's pocket and give it to Bert.

Subscribe to Enough Wealth. Copyright 2006-2008

Sold more stocks to avoid a margin call

Today's 3% drop in the Australian stock market brought my Comsec margin loan account close to exceeding the 5% "buffer". If you get a margin call you have to sell shares (or deposit extra cash) to bring the account's margin utilisation back below 100%, not just within the 105% buffer zone. So I decided to sell off my CBA (Commonwealth Bank) and IFL (IOOF Investments) holdings.

About the only good thing about being forced to sell of stocks is that the continued bear market means that they are currently priced below the price I realised when I sold them off.

2 Mar 2009 Sell 1,300 IFL $ 2.730 NOW: $ 2.71
2 Mar 2009 Sell 130 CBA $28.780 NOW: $28.51
20 Feb 2009 Sell 4,685 APA $ 2.870 NOW: $ 2.58
20 Feb 2009 Sell 251 AGK $13.320 NOW: $13.29

Subscribe to Enough Wealth. Copyright 2006-2008

Net Worth Update: February 2009

My net worth as at 28 February decreased by another -$34,351 (-5.59%) during the month to $580,214 (AUD). This month the decline was mostly due to continued losses in my geared equity investments (down by -$41,863), which more than offset the slight rise in the valuations of our real estate investments (up $10,508 or 1.39%) and a small decrease in the value of my retirement savings (SMSF down -$2,510 or -1.06%). The decrease in the retirement savings was actually a lot worse than it appears on the surface - last month our account received three months of employer contributions and my salary sacrifice for that period, totalling around $13,000.

The balance of my half of the mortgage was fairly constant at -$367,863. Our monthly payments and rent from our tenant are now just enough to meet the interest only loan payments, so no further redraws are required for the time being. Hopefully by the time the economy recovers and interest rates start to rise again DS2 will have started school and DW will be able to increase her paid employment from 2 days a week to four. Next month the loan balance will drop by about $6,000 as we were able to make a one-off repayment of principal using the Family Tax Benefit "top up" payment we received when we finally lodged our tax returns for 2008.

DW has started to complain about our compact car (a 2000 model Ford Festiva 2-door), and asking when we can replace it with a second hand Subaru Forester as we had planned. Unfortunately, spending $25,000 to upgrade our vehicle looks a lot less affordable now than it did back when my NW was over $1m and I could sell off some stocks to fund such a purchase. The Festiva has only done 100,000km and is still running well, so I'll put off trading it in for several more years.

Subscribe to Enough Wealth. Copyright 2006-2008