A place to sleep

July 18th, 2012 — 9:30pm

My girlfriend followed me to Maryland. She hired MBM Moving Systems to move her stuff. For the most part, everything went fine. But her sofa showed up with oil stains on it. She didn’t pay for an extended insurance policy, so her damages were limited to 60 cents per pound, or $180 for the sofa. This covered slightly more than the cost of having the stains removed.

Unfortunately removing oil stains from fabric is really hard, and the company she hired to do it wasn’t very successful. We decided to flip the cushions over and live with the remaining stains. They weren’t that noticeable. But then we got a big surprise. The bed in the sofa was wrecked beyond repair. I have never even been able to figure out how it was damaged so badly. It must have taken some immense force, like say dropping it a story, yet somehow the exterior of the sofa was not damaged. In any case she was screwed.

But it gets better. In order to get the $180 for a sofa that cost around five times as much, they made her sign a document that said they had no further obligations and that she would not report them to any reporting agencies such as the BBB. And she had to get it notarized. I doubt that such a document would hold up in court if it was challenged, but they still withheld her money until it was signed and notarized.

I needed a cheap sofa for my house. So I bought her a new sofa bed, and took her still-functional-as-a-sofa sofa bed. Value City Furniture (VCF) has lower end furniture that you can get at good prices. We found a sofa bed that I thought was comparable to, but maybe not quite as nice, as what she had, and it was on sale for $500. When we picked it up, I made sure it was intact and that it included the bed. It was possible to buy the same sofa without the bed for $100 less, so I need to make sure they didn’t screw it up. Everything looked good.

And yet it wasn’t. After we set it up and attached the feet, I found out that the top of the bed was three to four inches higher than the bottom of the bed. Basically, it was unusable. I don’t understand how such a thing ever could have even left the factory. It would have take 10 seconds to pull it out and look at it and see that it was not fit for sale.

By now I’m getting upset. She spent around $900 for a sofa that only lasted a few years. Then she spent another $100 on an air mattress to replace the bed. I invested another $500, and we still don’t have a working sofa bed, never mind the time we’ve invested. I drove all the way back to the store to verify the demo model they had shown us did in fact have a bed that was level with the ground. I was told to have the service department have a service technician come out and take a look.

More to come.

Comment » | Caveat Emptor, Shoddy Merchandise

Hidden Fees

April 16th, 2012 — 9:16pm

It was time to move my old 401K into a rollover IRA. I had limited choices and control over my 401k contributions. Why my employer chose ADP, I have no idea. I opened a Fidelity rollover IRA account into which I intended to transfer my 401K. I chose Fidelity because my current employer uses them for our 401k and other accounts.

I was told IRAs that I opened myself could by automatically transferred by Fidelity from the other brokerage. Whether my stocks will be sold first or not I don’t know, as I haven’t gone through the process yet. But in the case of 401Ks opened by an employer, both Fidelity, and a discount broker I use, told me the stocks would have to be sold, and a check would be mailed. Why the extra complexity? I suppose it could be due to some law or technical issue. But in the absence of any knowledge of how the process works, I have to be a cynic and assume they just want to make it as hard as possible for you to get your money back — often a safe assumption. And on top of this, ADP would not talk to me directly. To move my 401K, I had to go through my previous employer. If my last employer, no longer existed, I would have had to call a government agency. They really wanted to make it as hard as possible.

The one day I happened to choose to sell my index fund, the market tanked (a little). In the weeks following, while I waited for the check to arrive at Fidelity, the market shot up. This translates into a few thousand dollars lost immediately for a few percent over several years worth of 401K contributions. To add insult to injury, the amount of the check was approximately $50 less than what had been sitting in my account. It took some time to figure out when and where the $50 disappeared. It certainly wasn’t well advertised. I eventually figured out that it was probably some fee associated with taking money out of my account. I searched through the agreement with ADP — something my company agreed to of course, not me. One brief paragraph mentioned simply that there were fees, but there was no description of the fees or when they were applied.

I ultimately took a gamble and waited for a market correction. I ended up losing perhaps no more than a thousand off my 401K. Crappy, yet better than a few thousand.

My real frustration is that law contributes to financial institutions’ incentives to nickel and dime you with fees. There are a million special purpose accounts — many of them worth only small amounts of money in any given year: HSA, FSA, 401K, IRA, Roth 401K, Roth IRA, pension plans, etc. Each new account creates an abundant number of complex ways to be charged $25 here and $100 dollars there, all on relatively small amounts of money. To opt out is to pay a higher tax rate. And of course, with each new account, they want to make it as hard as humanly possible for you to get your money back out, and usually it’ll cost you.

Update

I moved my Zecco IRA into my Fidelity IRA account. It appears that transaction cost $70 in addition to the $30 yearly fee.

Comment » | Banks Behaving Badly, Undisclosed Fees

Property Tax Appeal

March 16th, 2012 — 8:33am

I recently appealed my property taxes on a house I bought from a bank. It was in really bad shape, and this was reflected in the price. I wanted my property taxes to reflect what I actually paid for the house on the open market. My experience is outlined in the dialog below. The research was done by my real estate consultants (my parents).  That essence of what was said is in block quotes,  what I heard is in bold, and explanations are in italics.

Victim

I’d like to see the comparables.

The State

Of course, here’s how we determined what your house is worth. These are the numbers we’ve fabricated for you.

The salient columns of the table are recreated here.


Victim

I found a comparable that appears to have been purchased by the county. Could I get more information about this sale?

The County

Of course, but we’ll need a written request. You didn’t think we were going to make this easy on you, did you?

Victim

Here’s my formal written request.

The County

Sorry, it needs to go to the legal department. We can play this game for a long time.

Victim

OK, here it is again.

Copies of the HUD are furnished showing 7373 N Kerry Hill Ct being sold for $169,305 with a mysteriously large “closing cost credit”.

Victim

There seems to be something missing. Can you explain the seller accommodation of $40,012 to the county?

The County

We don’t have to comment on that. You can’t handle the truth.

Victim

You have to provide this information.

The County

Perhaps you’re just confused. We’ve done something unethical and possibly illegal, and this is our last-ditch effort to try and throw you off the scent.

The county reluctantly hands over the contract between the county and the bank. The contract shows the true purchase price to be $129,293. It is clear at this point that the county is trying to manipulate the housing market by reporting invalid purchase prices, possibly for the purpose of increasing tax revenues. After correcting for seller subsidies of closing costs, where possible, and adding a few comparables of my own, the corrected sale prices were computed and sorted. The properties that sold for more were generally well fixed up; the properties that sold for less needed significant work. My home was assessed in the top half, both by mean and median.


Victim

I’d like my taxes to be reassessed to the value I purchased the house for on the open market. Here are the photos demonstrating why I was able to purchase the house at that price.

Public Employee

I’m not qualified to evaluate what it would cost to do the repairs. I need to see an official quote from a contractor who is not a family member. So your house is a wreck. What do you want me to do about it?

Victim

But I have all these comparables showing how low some of these houses have sold.

Public Employee

We can only use the official numbers from the state, and we don’t look at seller accommodations. We will only consider the fabricated numbers that we helped fabricate to justify our case.

Victim

Nonetheless, I have this contract from the county showing how much money was spent to fix up this other similar house.

Public Employee

We can’t look at appraisals for other houses. We won’t consider any legitimate information that would justify a lower assessment on your home.

I don’t believe that any of this is actually in the law. The “rules” themselves appear to be fabrications to prevent anyone from successfully appealing the value of their home.
Victim

But even so, this is what I paid for it, and it’s clearly in bad shape. I can’t give you an estimate since I did the work with my family, and you won’t accept an estimate from a family member.

Public Employee

You could go out and get an estimate. Anything that comes from a family member is biased, and we’ll only consider it as worth $100. I’m going to continue to focus on the one piece of evidence I know is impossible for you to document.

I wonder at this point if I should point out to him that the county’s numbers are clearly fraudulent, and yet he is implying numbers I haven’t even presented will be biased. I decide this will accomplish nothing.
Victim

If I told a contractor that I only wanted a quote to lower my taxes, he wouldn’t come out. So you’re asking me to do something that’s unethical.

Public Employee

It’s not unethical. We need an estimate. What are ethics again?

Victim

I’ve shown you all this overwhelming evidence that my house is over assessed. I obviously can’t give you the one thing I don’t have. What will convince you?

Public Employee

We need an estimate. You’re totally screwed.

Victim

So you’ll only consider properties that were cherry-picked to make the local real estate values appear higher, whose values were altered to boost those values even more? And any evidence that contradicts this obvious fiction, excluding the one thing I don’t have, will be ignored?

Public Employee

I’m sorry, but I can’t evaluate the value without an estimate. Bingo!

Victim

You and I both know this is totally ridiculous.

Public Employee

Look, I’m going to give you what you want this one time, but if you buy another house, you have to bring me an estimate or I’m going to consider all of the repairs to be worth $100. I’m not in the mood to fight anymore, and I know you’re just going to continue to appeal this, so I’m going to try to scare you away by threatening to gouge your eyes out if I ever see you around here again.

In the end, he gave up without a huge fight, mostly because he didn’t want to tangle with my parents. But I’m still in disbelief over some of what was said and done

Comment » | Overcharging

Citi Pays Me Back (Sort of)

September 24th, 2011 — 9:54pm

In my last post, I said it would be easier to get my money back from Citi by taking advantage of one of their credit card offers. So here’s how it actually worked out.

I got 16,000 points for signing up and spending $700 dollars in three months. They gave me another 800 points for signing up for electronic bills and online payments. One hundred points has a maximum value of one dollar. However, to get that maximum value, you have to order certain gift cards for 10,000 points. For example, 10,000 points will get you a Home Depot or Lowes gift card worth $100. But other gift cards, especially ones that cost less than 10,000 points or any cash offers, usually end up costing more than 100 points per dollar. So for example, 10,000 points might get you $70 dollars, or you might be able to get a $50 dollar Home Depot card for 8,000 points. These numbers are hypothetical. You’ll have to check the actual amounts.

I ultimately had a total of 20,224 points (16,800 of which came free). I got $200 dollars worth of gift cards and transferred the remaining points to my parents’ card. But here’s the kicker — I called up to cancel my card, and they offered me another 10,000 points for spending $3,000 in 6 months! That will end up being a total of $268.00 worth of free gift cards. I will ultimately end up spending over $6,000 dollars on their card, however I receive the same points per dollars spent as my preferred credit card gives me anyway, so there is no loss. And I will probably end up transferring the remaining 3,000 points to my parents’ card rather than spending another $7,000 to get another $100 gift card.

My original complaint was over $60. I’ve already received almost three times that amount (free), and I’m expecting another $100. Not bad! At least, it was a lot easier than fighting with them and getting nowhere.

Comment » | Banks Behaving Badly, Overcharging

NCUA Fails to Respond

June 17th, 2011 — 9:56pm

So the NCUA was too lazy to even respond to my last letter.  I’ve decided to send a similar complaint to HUD. I didn’t spend a lot of time on it because it seems likely they will also shirk their legal responsibilities and ignore me. However, I think it was worth an hour or two of my time before going the extra step by taking NASA FCU to court.

Comment » | Banks Behaving Badly

Virgin Mobile Phone Plan

May 11th, 2011 — 11:25pm

I recently got a company cell phone.  My phone service is now free (for me).  My old plan was a pay as you go system by Virgin Mobile.  I didn’t want to lock myself into another two year plan, so I had instead opted for a cheap phone with no contract.

When I first got service a few years ago, Virgin Mobile had somehow managed to charge my credit card for roughly five months worth of service, or around $120.  How this happened I have no idea.  I eventually had to remove my credit card number from their system to bring my account balance back to something reasonable.  When I had only about one month’s worth of balance remaining, I entered my credit card number back into the system.

So when I learned that I would definitely be getting a phone, I decided to discontinue my old service.  The problem was, I didn’t have the new service yet, and my current month was about to run out, and I only had an account balance of $19.79.  I needed at least $20 to get 400 minutes — one month’s service.  When I tried to change to the 400 minute plan, the web site wanted to charge me another $20.  I wrote Virgin Mobile; they told me there was no way to charge less than $10.  But I only needed 21 cents!

I decided I would just get the 20 cents per minute plan which would get me 98 minutes.  Well it turns out, their web site wouldn’t even allow me to switch to that plan without charging my credit card.  I complained and asked them to either (1) credit my money back to my credit card so I could add $20 to my account, or (2) just credit me the 21 cents.  I told them that I would be traveling without a working cell phone otherwise.  They cold-heartedly refused.  It was pretty obvious that they had no intention of refunding any overpayment, so I temporarily refused to do anything about it.

Despite the fact that their web site said I would not be able to use my phone without purchasing another month of service, it turned out that they were actually charging my account balance at a rate of 20 cents per minute.  I did not lose service.  So everything worked out and I ultimately saved 21 cents.  It seems like every large company has overcharging as a fundamental element of their business model.

Comment » | Overcharging

Veto H.129

May 11th, 2011 — 11:00pm

If this web page loaded a little slow, or you’re just tired of overpaying for mediocre internet access, consider contacting Governor Purdue and asking her to veto H.129.  More info here.

Comment » | Lobbying

Response from the NCUA

April 20th, 2011 — 8:34pm

So the NCUA tried to wash its hands of this:

According to credit union documents, your loans were made to refinance mortgages secured by investment rental properties obtained for business purposes. Loans made for business, commercial, agricultural, or organizational credit are specifically exempt from RESPA and the Federal Reserve Board’s Regulation Z, which carries out the purposes of the Truth in Lending Act.

They then go on to say that all of the paperwork NASA provided, “including Good Faith Estimate and HUD-1 forms, Interest Rate Lock, and Loan Points Agreement” was voluntary. Right, it was done purely out of the goodness of their disreputable heart.

I did a little research.  RESPA does exempt business purpose loans. (See here and Regulation Z 226.3 (a)(1); note, this is not a link to the actual law.)  At least one court case has interpreted rental property as being for business purposes. However, other cases have interpreted the law more subtly. According to these folks, the intent of the loan is more important in determining whether the loan is for business purposes than the type of loan. Since I was refinancing to lower the interest rate on my primary residence, at least one of my loans should be considered a consumer loan and not a business loan. I have written a second letter to the NCUA:

Dear [name removed]:

I sent a complaint about NASA Federal Credit Union to the NCUA in January and have received your response (attachment #1). You claimed that my “loans were made to refinance mortgages secured by investment rental properties obtained for business purposes.” However, this is only true of [removed] The other property, [removed], was my primary residence in 2010. The prior loan was a consumer loan. The intent of the refinance was to lower the interest rate on the mortgage of my primary residence.

A number of judicial decisions have established that it is the primary purpose of the loan, and not the type of loan, that determines whether the loan is of business or consumer use. I have been living temporarily with family and friends due to a job loss in 2009. It is only due to the economic circumstances that I am away from my place of residence in North Carolina, and it is for the same reason that I applied for an investment loan. I have never changed my address, and [removed] has always been my domicile as is reflected by my driver’s license, my voter registration, and the filing of my tax returns. My intention has been to physically return to my residence. And according to the law, if I return to my residence for at least 14 days during the year, it must be considered my primary residence.

Further, NASA FCU has implicitly acknowledged that my loan is not exempt from RESPA by sending me the paperwork required by RESPA and by addressing this issue through our correspondence (attachment #2). This violation of federal law is well within your jurisdiction. Due to the egregious manner in which my loan was handled and the broader negligence by financial institutions our society is experiencing, you should consider this a patriotic obligation.

I think there is a very high probability they will simply throw their hands in the air and look for some way to get out of doing any real work. But maybe they’ll surprise me and decide not to be a bunch of lazy government bureaucrats.

Comment » | Banks Behaving Badly

Response from the OCC

April 11th, 2011 — 8:46pm

So the OCC turned out to be pretty much worthless. I never received a response to my simple question. Instead, I got another response from Citi, which more or less reiterated what was already said. It’s not worth messing around over $60. Citi and Genworth screwed me. I had to pay a month’s worth of insurance on a product I didn’t own, on a contract I never signed, and paperwork I was never given. How does that work?

In any case, I was just approved for a Citi MasterCard which has a rewards program that will give me a $150 gift card if I put $700 on it in the first three months. Since I would normally only get $7 for $700 worth of expenditures on my Amazon card, I estimate I should earn more than double what Citi took. This is a lot easier than fighting with them, and I don’t even have to win! As soon as I get my gift certificate, I’ll close all my Citi cards. More to come.

Comment » | Banks Behaving Badly, Overcharging

Contacted the OCC

March 23rd, 2011 — 11:40pm

I called the OCC today to find out whether Citi overcharged me PMI. The lady told me to fill out an online complaint form which doubles as a request for information. So I briefly explained in the form how I felt I had been wronged. I think I’m supposed to hear back within 48 hours.

Comment » | Banks Behaving Badly, Overcharging

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