It’s time for a fresh approach to communication.
Companies should make it clear regarding what comes with your credit card besides reward points or cash rebates.
This week, the Financial Consumer Agency of Canada and MasterCard Canada released a model plain-language credit card application form.
When asked to test the redesigned form, consumers had the same reaction, says FCAC commissioner Ursula Menke: "Oh, my goodness, I didn’t understand this before."
People who had used credit cards for years said they were willing, and even eager, to seek out additional information.
What would you see if companies tried to educate you about your rights?
Here’s a guide to what’s in the model application.
Right on top of the first page, you find out all the rates you will be charged (such as 18 per cent for purchases, 20 per cent for cash advances, 4.9 per cent for balance transfers for six months and 20 per cent after six months).
There’s no interest charged only if you pay this month’s balance in full by the due date and you’ve also paid last month’s balance in full by the due date. (This two-month method of calculating interest on new purchases has been adopted by most credit card issuers.)
There’s no interest-free period for balance transfers. Say you transferred $5,000 to a new credit card on June 2. The interest on the balance transfer will be calculated from June 2 – even if the bill arrives July 15.
There’s no interest-free period and the interest is calculated from the day you get the cash advance free credit score.
Getting a cash advance will cost you $2 inside Canada and $4 outside Canada (in addition to interest paid).
A bounced cheque costs you $25; an extra copy of your monthly statement is $2; going over your credit limit is $20; and for transactions made outside Canada, you pay an extra 2.5 per cent of the amount in Canadian dollars.
The bank will give access to your personal information to other organizations, such as credit reporting agencies, bank affiliates and selected service providers.
For me, the privacy statement was the real eye-opener.
I didn’t realize how much latitude they had to share your personal information with companies selling unrelated products – and, of course, to profit by doing so.
Menke said she hoped credit card issuers would adopt a plain-language application. "It’s in the companies’ financial interest that people know what they’re getting into."
I disagree. Credit card issuers make their contracts almost unreadable for a reason – they’re happier if you don’t know what you’re getting into.
By communicating with customers at a Grade 5 level and disclosing all the ways they can make money at your expense, they’re opening themselves up to questions about how their businesses work.
Of course, I’d like to be proven wrong by seeing a bank adopt this model application right away.
Ellen Roseman’s column appears Wednesday, Saturday and Sunday. Email eroseman@thestar.ca.
OTTAWA–Tourism generated $19.7 billion of revenue for governments in Canada in 2007, boosted 4.3 per cent over 2006 by domestic travel.
Statistics Canada reports government revenue from domestic tourism rose 6.1 per cent to just over $14.5 billion last year, while revenue from international visitors dropped 0.6 per cent to $5.1 billion.
The agency says the share of government revenue from international visitors declined to about a quarter last year from just over a third in 2000.
Taxes on products, such as the goods-and-services tax and provincial sales taxes, were the single largest source of tourism revenue for the federal, provincial and territorial governments.
These taxes accounted for $4.7 billion for the federal government in 2007, half its revenue from tourism.
Provincial and territorial governments collected $5 payday advance services.5 billion from taxes, 60 per cent of their tourism revenue.
These tax revenues rose just 2.7 per cent in 2007, the second straight year of weak gains, largely due to one-percentage-point drop in the GST that took effect in July 2006.
Taxes on employment income and business profits were the second most important source of tourism revenue for both the federal and provincial and territorial governments.
Income taxes directly attributable to tourism rose 9.4 per cent in 2007, reflecting gains in both personal and corporate incomes and associated taxes.
These taxes brought in $3 billion for the federal government and another $1.9 billion for provincial and territorial governments.
With all three Detroit-based automakers in dire straits and seeking a Washington bailout, the moment finally has arrived for a radical reinvention of America’s domestically owned auto industry. Which means letting the Detroit Three reorganize under bankruptcy protection, from which several smaller, more nimble and competitive firms would emerge, no longer prisoner to Detroit’s hidebound, century-old decision-making traditions.
To bail out Detroit is not to rescue the U.S. auto industry, despite how the CEOs of General Motors Corp., Ford Motor Co. and Chrysler LLC continue to misrepresent the federal bailout they seek.
For more than two decades, there have been two U.S. auto sectors. There is the familiar Detroit Three (no longer the Big Three), which are corporate cripples after decades of mismanagement.
And there are the much healthier U.S. operations of Asian and European automakers that employ millions of Americans turning out Hondas, Toyotas and BMWs, sooner or later to be joined by Chinese and Indian makers. The foreign-based firms already operate 16 vehicle assembly plants and dozens of parts plants from Alabama to Ohio to Ontario.
Led by GM, Detroit is again a holdout against progress, arguing for the continuation of a failed status quo, just as it resisted everything from today’s life-saving three-point seatbelts to fuel-efficiency standards to the devastating (to Detroit) recent shift in consumer demand to small cars from gas-guzzling sport utility vehicles and heavy trucks.
Detroit arguably stands alone in chronically failing to "get it" since its laudable introduction of enclosed passenger cabins and automatic transmissions before most of today’s motorists were born.
One way or another, Detroit has been cosseted by taxpayers and motorists since the ill-fated Chrysler bailout of 1979; followed by the Reagan-era "voluntary" quotas imposed on imports, which did not deter American consumers from paying the resulting higher prices for better-built Hondas and Toyotas; followed by repeated abeyance or postponements of fuel-efficiency standards the feds sought to impose on Detroit.
The ill-fated 1979 Chrysler bailout, which secured that company’s viability for just two decades, signalled the larger GM and Ford that they also were "too big to fail" and needn’t abandon their complacent ways. The import quotas inspired first the Asian rivals and later the Europeans to leapfrog that barrier by making in America most of the vehicles they sell in America. And granting Detroit leave from onerous fuel-efficiency standards enabled the foreign-based competition to gain a competitive advantage by complying with or exceeding the U.S. mandates.
Detroit’s sense of exceptionalism has not diminished.
Rick Wagoner, GM’s chief executive, was on Capitol Hill last Thursday making a pitch for taxpayer assistance in financing its proposed merger with Chrysler – this after Detroit had secured in September $25 billion (U.S.) in federal funds to finance development of fuel-efficient vehicles.
Yes, you read that correctly. Developing products necessary to ensure their future, as foreign-based firms have long since done with their own money, is something Detroit has to be paid public money to do.
At a moment when Washington is trying to come up with the scratch to keep imperilled homeowners from losing their homes, the Detroit makers further propose that the additional bailout funds they seek – a rumoured $10 billion in GM’s case – be carved out of the $700 billion bank bailout fund that U pay advance in 24 hour.S. lawmakers rightly criticize for failing to provide for homeowners as well as Wall Street banks and brokerages.
As if chutzpah weren’t enough – GM’s finance arm, GMAC LLC, which has lost $9.1 billion in the past two years as a mortgage-lending enabler in the historic collapse of the U.S. housing market – Detroit is also stooping to coercion.
GM has lost an almost incomprehensible $70 billion (U.S.) since the end of 2004, while the U.S. economy was still healthy, and yesterday reported a $2.5-billion third-quarter loss.
Barack Obama backer Roger Altman, the former Clinton-era Treasury official forced to quit under an ethical cloud, and now a top adviser to GM in its merger talks with Chrysler, warned the Obama economic team publicly last week that the collapse of any of the Detroit Three "would be a difficult way for a new administration" to take office.
Reading from the same scare-tactics script, John Snow, a mediocre if generously compensated CEO of U.S. rail giant CSX before becoming George W. Bush’s second, invisible, Treasury secretary, and now chair of Chrysler owner Cerberus Capital Management LP, told CNBC that Washington must ensure "that a vital industry like autos, which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn."
Any bailout of GM, enabling it to purchase Chrysler, would be a bailout of the short-sighted dealmakers at private-equity firm Cerberus in their exquisitely ill-timed bet on Chrysler in buying the firm from Daimler AG last year, only to see Chrysler’s fortunes further plummet after the deal.
Detroit has been a significant destroyer of jobs and shareholder value for the past decade, and sporadically in decades past, as well. Worse, its sclerotic decision-making has helped hold America back from technological leadership in one of the world’s major industries.
As the cockpit of capitalism, banking is an essential service whose seize-up this September required a bailout by global governments. The auto sector is not as important, and the Detroit Three no longer account for more than a fraction of that sector.
And the latest straw GM is grasping at, a combination with Chrysler, proves again how lacking in smarts is the existing troika of Detroit CEOs. A GM already burdened with too many brands (eight) merged with Chrysler’s three brands would require a years-long shedding of jobs and closing of excess plant capacity in search of the "synergies" that former Chrysler owner Daimler found so elusive in its sorry nine-year-long ownership of the firm.
If an Obama who last week pledged to make aid to Detroit a top priority is serious about change, he will rule out a Detroit bailout. Or he and Congress will effectively nationalize Detroit, deploying a team of experts to preside over the dismantling of these firms that for generations have lacked the managerial acuity of founders William Durant and Alfred Sloan of GM, Henry Ford and Walter P. Chrysler.
David Olive writes on business and political issues. He can be reached at dolive@thestar.ca
The dollar opened the week up on the euro amid bailout plans for two key European lending institutions, as the effects of the financial crisis on Wall Street were keenly felt across the Atlantic.
The 15-nation euro slid to $1.4406 in early European trading Monday, down from the $1.4618 it bought in late New York trading Friday.
Germany’s financial regulators and several banks stepped in Monday to throw a line of credit to Hypo Real Estate Holding AG in a multibillion euro move aimed at shielding Germany’s No. 2 commercial property lender from going under.
That came a day after Dutch-Belgian bank and insurance company Fortis NV was given a $16.4 billion lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg.
"The dollar (is) finding upside off the back of the progress from the Fed’s bail out plan whilst the euro and pound are both under pressure as the credit crisis once again casts a shadow on this side of the Atlantic," said Gary Thomson, a currency trader with CMC Markets.
"With (U.K payday loans. bank) Bradford & Bingley being nationalized and Fortis being multi-nationalized, it’s a clear reminder that the problem continues to roll on and most certainly isn’t ring fenced across the Atlantic."
In other currencies, the British pound bought $1.8188, down from the $1.8426 on Friday. The dollar held largely steady against the Japanese yen to ¥106.30 from ¥106.06 Friday.
Nokia (NOK1V.HE: Quote, Profile, Research, Stock Buzz) is well prepared for Google’s (GOOG.O: Quote, Profile, Research, Stock Buzz) high-profile foray into the mobile phone business thanks to years of development experience and millions of phones on the market, a senior Nokia official told Reuters.
Details of Google’s plan to enter the mobile software market are expected on Tuesday when T-Mobile USA (DTEGn.DE: Quote, Profile, Research, Stock Buzz) displays the first phone based on Google’s Android platform in New York, sources familiar with the plan have said.
In response to Google’s impending entry into the market, world’s top cellphone maker Nokia said in June it would buy out the remaining shareholders of UK-based smartphone software maker Symbian for $410 million, then give the software to not-for-profit organization and make it royalty-free.
“I think that the fact there is a mature platform that is being introduced in an open source environment kind of changes the game,” said David Rivas, head of technology management at Nokia’s S60 business, the platform that runs on Symbian.
“The choices up until then were: You could go with proprietary and mature, or you could go with immature and free paydayloans. Now there is a choice that is free and mature,” Rivas said.
Nokia, Motorola (MOT.N: Quote, Profile, Research, Stock Buzz), Sony Ericsson (6758.T: Quote, Profile, Research, Stock Buzz)(ERICb.ST: Quote, Profile, Research, Stock Buzz) and others will contribute assets to the not-for-profit Symbian Foundation, which unites handset makers, network operators and communications chipmakers to create an open-source platform.
Rivas pointed to the 226 million Symbian phones that had been sold by end-June, saying they gave Symbian an advantage over the new platforms of Google and Apple (AAPL.O: Quote, Profile, Research, Stock Buzz).
“All developers tend at the end of the day to look for something that has impact in the context of volume,” Rivas said.
In a promotional video for CPFilms’ automotive window film, a machine re-creates a side-impact car accident. It slams into a car that has a driving mannequin, and predictably, pebble-sized pieces of glass splatter inside and outside of the vehicle.
Yet when CPFilms’ safety and security film is applied to the inside of the side windows, the glass doesn’t fly into the car.
Instead, the broken pieces stick to the film.
For years, CPFilms — a subsidiary of Town and Country-based chemicals maker Solutia Inc. — has made solar films for automobiles. It also has made window films for houses and office buildings to protect against hurricanes and strong winds.
When CPFilms realized its authorized dealers were using the architectural film on vehicles’ windows for added protection, "we saw the need (for) offering safety film," said Andres Vasquez, the global product development manager.
After developing the product over the last three years, the company recently unveiled its LLumar Automotive Safety and Security Film. The film can be applied at any point in a vehicle’s lifetime, but it’s only being sold to a network of CPFilms-designated dealers, who then professionally install it.
Including installation fees, the product costs between $400 to $700, according to CPFilms.
The film, which is essentially layers of polyester, comes in clear and tinted versions and is applied to the interior sides of the windows. By law, windshields cannot be altered, so the film only can go on the side and rear windows.
Vehicles’ side windows have what is known as tempered glass, where the glass is crafted to shatter into pebbles instead of shards.
"But there’s still a possibility of being injured" when those pebbles fly into a car during a side-impact crash, said Russ Rader, a spokesman for the Insurance Institute for Highway Safety, a nonprofit in Arlington, Va., dedicated to reducing auto-related deaths, injuries and property damages.
The film might offer some benefit, Rader said, but his group did not have any studies on the film’s effectiveness.
Stephany Davenport, the brand manager for CPFilms, said the product not only protects passengers in an accident but also offers protection against smash-and-grab vehicle break-ins.
CPFilms’ promotional video demonstrates that delay. In less than four seconds, a tester was able to smash through an unprotected window using a rock and grab a purse on the other side online payday advance. With the film installed, it took the same man more than 40 seconds to break through the film and get the purse.
"We’re not saying you can’t break it," Davenport said. "We’re saying it takes longer."
That delay, CPFilms said, draws attention to a break-in and can discourage a thief.
There are other automotive films on the market, comparable to the product by CPFilms, that provide similar safety and security protection.
CPFilms marketed the automotive film to 150 select dealers nationwide in March, and on Aug. 1, it expanded the campaign to reach more than 4,000 dealers. Most of the dealers are small businesses that specialize in window films.
The new film has been installed on at least 50 vehicles since its March launch, said Davenport, adding that the film is still in its initial marketing phase.
For many new films, Davenport added, it takes several months for dealers to promote the products.
"Like anything else, it takes a while for (consumers) to understand the product is available" and see the benefits it could provide, she said.
Local installations have been few. Some area dealers authorized to install the LLumar safety and security film said they have not received many, if any, calls for the film.
Craig Moore, owner of St. Louis Window Tinting in Chesterfield and Eureka, installed his first LLumar safety and security auto film this week — in an Acura TSX owned by Frank Leta Acura in south St. Louis County.
Frank Leta Acura decided to pay for the film on one car because "we try to display any technological advances" in the auto industry, said General Manager Steve Brown. A niche of car buyers, those looking to customize their cars and have the "latest and greatest" technology, would be interested in the film, Brown said.
Moore has initially marketed the film to automotive dealerships because "as pricey as it is, you’ll find that they’re willing to pay" for it. But despite the slow economy, he plans to eventually focus more on individual drivers. Once people are aware of the benefits, he said, there will be demand.
atablac@post-dispatch.com | 314-340-8140
The U.S. Federal Reserve on Sunday launched a series of emergency measures to calm financial markets and ease any trading disruptions that could arise from a collapse of investment bank Lehman Brothers.
One of the biggest changes the Fed made was to accept equities as collateral for cash loans at one of its special credit facilities, the first time that the Fed has done so in its nearly 95-year history.
The Fed’s actions and an agreement by 10 of the world’s biggest banks to set up a $70-billion borrowing facility were intended to make sure market participants have ample access to cash while Lehman’s affairs are wound down in markets over coming weeks or months.
Analysts said the Fed was increasingly making itself the lender of last resort for sorely stressed investment banks and seemed fearful the financial system was at risk of a meltdown as problems that originated in the U.S. subprime mortgage sector spread.
“There is little doubt that the Fed believes systemic risk is becoming closer to really landing on shore,” said Tom Sowanick, chief investment officer for Clearbrook Financial LLC in Princeton, New Jersey.
The steps were the latest in a series of aggressive actions from the Fed dating to last August aimed at keeping markets liquid and trading at a time mounting defaults on U.S free credit report and score. mortgage debt were leading banks to recoil from providing credit.
In March, the central bank put up cash to facilitate JPMorgan Chase’s takeover of Bear Stearns, concerned that letting the troubled investment bank collapse could trigger a system-wide crisis.
This time, however, the central bank — in three days of crisis talks at the New York Federal Reserve Bank — declined to put taxpayer funds on the line to prop up Lehman. Instead, it moved aggressively to ensure any unwinding of Lehman’s affairs would be as orderly as possible.
With its unprecedented takeover of Fannie Mae and Freddie Mac this week, the U.S. government may have also bailed out Asia’s markets by staunching a heavy flow of equity capital out of the region.
This is significant. Fund managers had been moving money out of the region and Asia Inc had been slowing down its overseas borrowings in what amounted to early signs of the first capital outflow since the Asian financial crisis a decade ago.
Now, in one fell swoop, Washington has taken over half of all U.S. mortgages, so removing one of the big question marks in investors’ minds that for the last six months had made them flee Asia’s high growth, yet high risk, stock markets.
Of course, the financial crisis is not over as a slump in Lehman Brothers’ shares has shown.
But Fannie and Freddie hold outstanding debt of $5 trillion, of which about 20 to 22 percent is held by countries like Japan, China, Russia, and South Korea electronic check payday advance. So having the risk on that debt effectively cut to zero greatly eliminates the chance of a wave of global losses on the companies’ bonds.
“This is a watershed in the market because it reduces risk aversion. Risk has been transferred from the private to the public sector,” said Dariusz Kowalczyk, chief investment strategist with CFC Seymour Ltd in Hong Kong.
Since mid May, the MSCI Asia-Pacific ex-Japan stocks index .MIAPJ0000PUS has fallen 26 percent to its lowest level in almost two years.
The money can start to flow back in to Asia, Kowalczyk says. He expects an upward trend for the rest of the year as fund managers reduce the cash element of their portfolios and fill up on equities.
A U.S. Securities and Exchange Commission plan to overhaul oil and gas reporting rules will boost oil companies’ proven reserves, lift their shares and may even lead to takeovers.
The SEC said in June it wanted to revise the rules, devised in the 1970s, saying they were based on “outdated” thinking.
The stockmarket regulator plans to allow companies to book reserves from “unconventional” oil and gas sources such as oil sands and coal-bed methane — currently two of the hottest areas of investment.
Companies would also be able to book reserves at some deep-water projects that cannot currently be described as “proven”, and firms could also publish data on “probable” and “possible” reserves, recovery of which is much less certain.
“The companies will actually be able to book more reserves,” said Frederic van Parijs, Senior investment manager with ING Investment Management in the Hague.
The planned reporting changes will not only apply to U.S payday loans in one hour. oil companies like Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) but also European majors, as most report under SEC rules.
“For some companies, it would have a significant impact, particularly if they have a heavy exposure to non-traditional sources of future production,” said Peter Newman, who heads the oil and gas practice at Deloitte & Touche in London.
Individual companies declined to comment on the impact of the changes but support the SEC’s move strongly through industry bodies.
Biotechnology company Genentech Inc. says sales of its cancer treatments, led by blockbuster drugs Avastin and Rituxan, drove nearly 5% growth in second-quarter profit, but the results did not meet Wall Street forecasts.
The South San Francisco, Calif.-based company Genentech Inc. (DNA) says its quarterly profit rose to $782 million, or 73 cents per share, from $747 million, or 70 cents per share, in the prior-year period. Revenue rose 8% to just under $3.24 billion from $3 billion easy quick payday loans.
Excluding 2 cents per share for acquisitions and special items, the company earned 75 cents per share in the latest quarter.
Analysts polled by Thomson Financial expected profit of 86 cents per share on revenue of $3.23 billion.
Powered by WordPress -- XHTML 1.0