Finance

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Cell Hell: AMEX Can Text Spam U Now :(

In MrConsumer’s American Express Optima bill for February, buried on page seven of a 10 page statement, was a “Notice of Changes to Your Account“. The changes were precipitated by “the challenging environment and the increasing costs of doing business”, the company said. Whenever a credit card company uses the word “changes”, it is a not good thing for customers. It usually means higher prices or lowered benefits.

Typical of most credit card issuers, they give you the new language, but generally don’t explain how the terms are different from before. So, unless you have the cardholder agreement that you received when your card was first issued, you may have no idea how exactly you are being screwed affected.

Besides presumably cutting back on their luggage and travel insurance benefits and raising finance charges for some cardholders, the notice contained an interesting section about telephone communications which is replacing the old one. To see just how it changed, I tried to find my original cardmember agreement, but was unable to. I checked AMEX’s website, and it was not there either. I called an AMEX representative and asked for a copy to be emailed, but alas, they can only do snail mail which will take seven to 10 business days. I also asked him to read a certain portion of it to me. He could not. They don’t even give their own representatives access to the contract that governs the card.

The change I was trying to find out about concerned a deletion of the old “Telephone Communications” section of the agreement, which presumably only said that you agree that they can record telephone conversations you have with them. Here is the substitute language:

*MOUSE PRINT:

“You agree that from time to time we may monitor and/or record telephone calls between you (or Additional Cardmembers on your Account) and us to assure the quality of our customer service or as required by applicable law. You authorize us to call or send a text message to you at any number you give us or from which you call us, including mobile phones. You authorize us to make such calls using automatic telephone dialing systems for any lawful purpose, including but not limited to: suspected fraud or identity theft; account transactions or servicing; offers of American Express products and services; and collecting on your account. You authorize us to place prerecorded calls in connection with the status of your account, or security and identity theft matters. You agree to pay any fees or charges you incur for incoming calls or text messages from us without reimbursement.”

Translation: If you ever gave AMEX your cellphone number or called them from it, you are permitting them to call you or text you on your cellphone, with among other things, advertising messages.  And you have to pay the cellphone charges that those calls and texts may incur.

By notifying you of the changed language and coupling that with your pre-agreement to allow AMEX to change their contract with you at anytime, AMEX could easily assert that any laws that may require you to give permission (“express consent”) to receive unsolicited promotional calls on your cellphone have been complied with. One would hope that a court would never let your silence constitute consent in the situation described. [ See basic rules about calling and texting to cellphones. ]

Now back to that conversation with AMEX’s customer service representative.  At the end of the call (in which I had never mentioned the specific subject matter in the agreement that I was interested in), he asked if he could update my account with … my cell number!  “Like hell,” I said.  “I just read the new rules that by giving you that number you can spam me and run up my cell bill.”

Update: American Express has responded to this issue:

We want to point out that Cardmembers do have some choices about receiving communication from American Express:

If a Cardmember doesn’t want to receive marketing offers, including offers via land or cell phones, they can select not to receive them by logging onto americanexpress.com/communications and we won’t contact them with any offers. Of course, we will contact Cardmembers for service related issues, for example if we detect fraud.

We don’t send marketing or promotional offers via text message unless a Cardmember enrolls to receive offers. While we may text a Cardmember for servicing related issues, within the text message Cardmembers are given the option to unsubscribe. — Vice President, Public Affairs

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Newpro Windows’ “Save 40% on Heating Costs” Guarantee

NewproNewpro is a brand of replacement windows that relies on salespeople coming to the house and demonstrating the product.  There are many stories online about aggressive sales pitches and outrageous initial price quotes.  One person was quoted $17,000 for 12 windows, another was told the price was $29,000 for 17 windows.  Borrowing from the timeshare salesperson’s book of tricks, the window pitchman typically checks with his boss, and gets permission to lower the price several thousand dollars.  The price still remains quite high, according to reports.

But that is not what this week’s Mouse Print* is about.  It is about the 40% fuel savings guarantee that Newpro advertises on TV and on the Internet.

On their website, Newpro elaborates on their promise that you will “Save 40% on your Home Heating Costs — Guaranteed!*”

Newpro

So far, so good, (except for having to replace all the windows in your house) until you follow the asterisk to the footnote:

*MOUSE PRINT:

**Restrictions apply. Fuel Savings Guarantee applies to homes where all windows are replaced with Newpro 2000 Windows. $500 limit applies. See Newpro Associate for details.

A $500 maximum?  If the windows did not reduce your fuel costs at all, in order to earn the maximum refund, your heating costs could be no higher than $1250 a year. ($1250 x 40% = $500).  For most homes, you probably pay much more than that annually for heat. Another example:  if your fuel costs were $3000 last winter, and you only experienced a 20% reduction this coming season, you would only qualify for $500 of the $600 you were owed.

While the 40% fuel savings claim is a great marketing tool, by limiting the refund to $500 and only making it apply for the first year, your new Newpro windows may not ultimately save you as much money over their life as you might expect. 

The even deeper details  say they do not calculate your refund based on the costs of heating from last year to this, but rather on your consumption (with oil falling in price, this is a good thing). Additionally, only their high-end windows qualify. And, if it is a really cold winter this year (“abnormal weather conditions”), the claim will be reduced.

So if you plan to make a $10,000, $20,000 or $30,000 purchase of new windows, keep in mind that a possible refund of $500 is miniscule in comparison, for what many say are grossly overpriced windows.

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Green Umbrella’s All-in-One $9.95/mo. Extended Warranty

Green UmbrellaFrom the folks who bring you FreeCreditReport.com, now there is Green Umbrella. It is an extended warranty plan for many household goods, and is sold by the month. Rather than buy a separate policy for each item, their plan is blanket coverage for multiple items in your house.

The company claims that “one plan can cover all your* Home Appliances, Personal Computers, and Electronics.”

Unless you just landed on planet earth (and didn’t bring anything with you from Mars), by its very terms, the plan cannot cover ALL items because:

*MOUSE PRINT:

“Covered Item means Electronics, Appliances, and Computers that meet the following requirements:

— Are purchased during the Coverage Period or within sixty (60) days prior to the Effective Date listed on the Cover Page of the Agreement; “

So, only items purchased no more than two months old are covered, as well as newly purchased items. The plan will not otherwise cover your existing computers, electronics, or appliances.  [Note: Green Umbrella is running a promotion for September only whereby all qualifying items purchased during 2008 will be covered.]

How long does coverage last? As long as you pay the monthly fee, but you could fall into a trap. The coverage for any particular item is limited:

*MOUSE PRINT:

“Coverage begins on the date You purchase the Covered Item and terminates thirty-six (36) months from the purchase date”

You could easily be lulled into believing that your continued payments continue to cover everything purchased since the plan went into effect.

The service agreement is over 5500 words, and there are many catches and requirements, including having to register new purchases within 30 days; already purchased items must have come with at least a 12 month manufacturer’s warranty; if your DLP or LCD HDTV lamp burns out, they will only give you the bulb for you to replace on your own; you can only make two claims per year; and much more.

If you purchased the covered item with a credit card that provides extended warranty coverage, for say the second year, your coverage under this plan may be limited:

*MOUSE PRINT:

“Coverage is secondary to any other applicable warranty, insurance, indemnity, or extended warranty available to You. Coverage is limited to only those amounts not covered by any Other Coverage.”

So, if you have a manufacturer’s warranty for say a year, you must make a claim through it, and not this plan. The credit card warranty will kick in if you have a problem in the second year of ownership. And therefore only in year three will this plan provide any benefits. So you really have to do the math and recognize that your payments for the first two years of coverage cover nothing. In total, you will pay roughly $360 to get coverage in your products’ third year of life.

One last insult:

*MOUSE PRINT:

“The Coverage Period must continue without any lapse in payment (i.e. the Monthly Agreement Charge for this Agreement is not paid when due). If there is a lapse in payment a new Agreement will be issued upon receipt of the payment for the Monthly Agreement Charge. Only Electronics, Appliances, and Computers that qualify as Covered Items under the terms of the new Agreement will be covered.”

Translation: If your monthly payment arrives late, your old plan is cancelled and a new policy is issued. Therefore, all previously covered items will no longer be covered unless they were purchased in the prior two months.