Saturday, 20 August 2016

Get insured!

I don’t own shares in any insurance company. Honestly I don’t.

The reason that I encourage people to get insurance is simply because it protects them. The problem is that so few of us understand what insurance actually is.

Every couple of weeks we’re contacted by consumers who tell us the same story. They had a funeral policy but their circumstances changed, perhaps they got another job that offered an alternative plan or they simply couldn’t afford the existing policy, so they cancelled the policy. Their complaint is that the provider then refuses to refund the premiums they paid over the last few years, even if they never actually made a claim.

Our job is then to explain to them that they misunderstood what insurance is. An insurance policy isn’t a savings plan or an investment that offers a return. When you buy an insurance policy you are buying something. Cover against risk.

Insurance is about transferring risk. You pay an insurance company to take a financial risk instead of you doing so. With a funeral plan the insurance company is the one that takes the risk of paying for your funeral should you die. They take that risk every month, so long as you’ve paid. If someone listed on your policy dies then they pay for the funeral. If nobody dies, they don’t pay but you still had the comfort of knowing they would have done and they will do next month if something tragic happens.

I’ve sometimes been tempted to ask to one of these people complaining that they didn’t get their premiums refunded, if they would rather someone had died so they could have claimed?

People frequently complain about insurance being something they can’t afford. It’s too expensive, they tell us. But compared to what? What about compared to not being insured?

Some months ago we got an email from a consumer whose wife had also been in a car accident. Nobody had been hurt but minor damage was done to the other driver’s vehicle. Everyone involved accepted that the collision was her fault. The other driver, who had vehicle insurance, submitted a claim and his car was repaired. However, there was an “excess” amount of P3,000 that the other driver was required to pay. This is common in insurance policies, there is an amount that the policy doesn’t cover which the insured person has to pay. So the other driver came to the husband, the owner of the vehicle, and asked him to pay him back for that sum of P3,000 which he willingly did.

Months later the other driver’s insurance company wrote the husband a letter demanding that he compensate them for what they paid towards the repairs, P10,742. He asked: “Am I legally bound to pay this amount?”

The answer was simple. Yes, he WAS required to compensate the insurance company. The other driver did nothing wrong, so he deserved to be paid back for his losses but the insurance company didn’t do anything wrong either. They were both “innocent parties” and they deserve to get their money back. It’s perfectly normal practice.

Of course what he should have done is have his own vehicle insurance policy. That way his insurers would have paid the price for him.

But he was lucky. He only had to pay for P13,742 worth of repairs. What if his wife had totally destroyed the other guy’s vehicle? A contact in the insurance industry told me about an identical case where someone faced a bill for over P500,000 for destroying the other person’s car. Can you imagine the bill you might be facing if you destroyed someone’s brand new Range Rover or top of the range Mercedes? You could end up owing more than a million.

Or, if you prefer, you could owe almost nothing, if had a third-party vehicle insurance policy. Third-party insurance doesn’t cover your losses, just those of your victims if you cause an accident.

That’s the comparison you should be making. The certainty of spending a few hundred on a third-party vehicle insurance policy, or the risk of having to pay a million and possibly losing everything you own to do so.

I’m the first to admit that it doesn’t always go smoothly. A reader contacted us recently about the cellphone he’d bought from a branch of House And Home that was subsequently stolen. Luckily the phone came with an insurance policy that covered the reader in the event of theft. So far, so good. But why, five months later, having given them all the necessary paperwork, had he not received the insurance payout? When we spoke to them their answer was simple. That’s just how long these things take. Somehow, because the claim had to be processed in South Africa, that excused taking so long to process the simplest of transactions.

It’s simply not good enough. Section 15 (1) (a) of the Consumer Protection Regulations says that services must be delivered “with reasonable care and skill”. Taking five months to process an insurance claims is careless and without skill. Leaving their customer with no cellphone for five months isn’t good enough.

So maybe that’s one of the reasons why so few people have insurance policies. Insurance is seen as expensive and insurance isn’t always as simple as it should be.

Last year we asked people how much they trusted a range of industries, including the insurance business. Only 22% of the people we questioned said they thought the insurance industry was honest and I think that’s a real danger. More people should be buying insurance products to protect themselves against risk and the fact that some insurance companies and stores let their customers down by taking months to process a claim undermines that.

Friday, 19 August 2016

The Voice - Consumer's Voice

Is Helping Hands International legit?

People have been approaching me to join Helping Hands International. They say I can get a house, a car, a laptop and income for life. Can this be true?

I think you know the answer to this question already, don’t you?

I’ve seen some of the advertisements on Facebook for Helping Hands International and they show all the signs of a pyramid scheme. They use phrases like “start to live your dream”, “residual income” and “financial freedom”, just like all the other pyramid schemes.

One of their recruiters posted some questions and answers about the scheme on Facebook. These questions tell you all you need to know about this scheme. One was “When I sign-up, do I need to sell any goods like other MLM companies?” The answer was “No. We dont sell any goods.” Another question asked whether the scheme is supported by any reputable organisations and they claim that they’re supported by Apple, Hyundai, HP and even the United Nations. In case you haven’t guessed already, this is a lie. A complete lie. Do you trust liars?

I think the evidence about Helping Hands International is very simple. As their representatives say, there are no products on sale, you just need to recruit people who in turn recruit other people, each of whom pay money to join. It’s a pyramid scheme, they’ve confessed that themselves.

Like all pyramid schemes this one will eventually collapse leaving a lot of people who devoted a lot of money, time and effort to recruiting other people beneath them poorer and frustrated. Do you want to be one of them?

Won’t they fix my car?

I bought a car from one of the car dealers in Francistown and the car gave me a problem the following day. It was producing some sounds in the engine. I returned it to the dealers and they refused to help saying there is no warranty. I did not sign any documents when I bought the car. They just signed the registration papers of the car as we were registering the car into my wifes ownership

We never came across such words about the warranty we just paid and got the car and everything was done. There was too much excitement of a new car so we didn't waste any time as we were looking forward to enjoy our new car. So there was less talking with the gentlemen. We just talked about the price and that was it. Please help. I am now helpless since I can not drive it anymore?

Unfortunately, I don’t think there’s much you can do. When you buy a second-hand car, particularly from one of the less reputable dealers, you usually buy the vehicle without any warranty. The words might vary, some will say the sale is “voetstoots” (meaning “as it stands”), others will say “as seen”, others are more direct and simply say “no warranty”.

When you sent me the receipt that they gave you it was quite obvious. Stamped right in the middle of the receipt were the words “No guarantee”, meaning that the dealer offers you no assurance that the vehicle is roadworthy.

The law on these situations is quite simple. You disclaim your right to a warranty when you agree to this condition. This doesn’t mean that the dealer can lie to you, they can’t hide some disastrous fault in the car but they are able to say that they won’t help you if the car fails. Given that this is an old car then it’s reasonable to assume it’s going to break down sooner or later. Unfortunately for you it was sooner.

Unless you’re an expert mechanic you are taking a real risk when you buy a second-hand car. Our advice is always to get a trusted mechanic to check a car you’re considering buying before you hand over your money. If you don’t know one, I’m sure the last garage that serviced your last car will lend you one for a small fee. It might cost you a few hundred but it could easily save you tens of thousands.

Friday, 12 August 2016

Can you read?

I’m obviously not saying you’re illiterate. The fact that you’re reading this shows that you can read. But can you really interpret and fully understand what’s written before you? Can you read “between the lines”?

Here’s an example on when someone didn’t read. A few weeks ago a consumer contacted us to complain about a hotel in Gaborone where she’d booked a room. Being a modern woman, she’d done this online, using a well-known service called This was a last-minute thing, she wanted to stay that same night. She selected the date, the type of room she wanted and the site asked her for her debit card details to make the reservation. Which she gave.

A little while later something happened to change her mind and she no longer needed the room at the hotel. Can she cancel and get a refund, she asked? No, said the hotel, you can’t have your money back. That’s when she came to us. Was this permitted, she wanted to know?

Unfortunately it was. I took a look at the hotel’s details on and even went to the stage where I was asked for my card details. Right next to the “Book now” link was another link saying “Booking conditions”. Click on that and it says “You can cancel free of charge until 5 days before arrival. You'll be charged the first night if you cancel in the 5 days before arrival.”

Given that there weren’t five days between her booking and the date she planned to stay in the hotel, was it fair not to give her the chance to cancel the booking? My answer was simple. Was it the hotel’s fault that you booked at the last minute? What had they done wrong?

I know it’s frustrating to have lost nearly P1,000 on a room you never stayed in but the booking conditions were quite clear. If you cancel with less than five days notice, they’ll charge you for the first night’s stay whether you’re in the room or not. But had she actually read the conditions before paying? Probably not.

It doesn’t matter whether it’s online or a purchase you make the old-fashioned way, you really must read the conditions that are presented to you before you hand over your money and before you sign anything either digitally or with ink. If you don’t…

I was once shown a furniture store’s hire purchase contract. Near the end, written in very small letters, was a clause saying “I have inspected the goods and they are in a satisfactory condition”. But this is the contract you sign when you buy something, not when it’s delivered. The goods might not be delivered for another few weeks but you have to say in advance that they won’t, at some future date, be damaged when delivered? Why would any sane person agree to that? The answer is very simple. They agree to it because they haven’t read it.

Another clause in the agreement said that “I have read this agreement and understand it fully and I agree not to claim that this is not so.” I wonder who that clause is targeted at? I think we can guess. People who don’t read the agreements they sign.

Just as important as reading documents, is making sure that you read them critically. You have to read things while wearing your skeptical hat. The key lesson of skepticism is that you shouldn’t believe something just because someone says you should or because you read it somewhere. You should only believe things when there’s a good reason to do so.

Would you believe this if you received it in your email?
“I write to introduce this urgent/important business opportunity to you irrespective of the fact that we have not seen or known each other believing that it will be of immense benefit to both of us. My name is Mr.Johannes Smith, the head Auditor of Standard Bank – South Africa, I got your contact through the South African Chamber of Commerce in my earnest search for a reliable individual…”
Most of you will recognize this as the beginning of an advance fee scam. Someone claiming to be a very senior manager in a South African bank contacts a total stranger offering you something “of immense benefit to both of us”? And he claims to have got your name from an organization you’ve probably never contacted? The email goes on to say that there is a fund of $18.5 million that he plans to steal and he needs your bank account details so he can send the money to you. He says you get to keep 40% of it in return for helping him in his crime. Of course this is really about a payment he’ll want from you in order to process the fake transfer.

You probably wouldn’t believe the email if your received it but the scammer doesn’t need you to believe it. He’s not looking for people who are skeptical, he’s looking for people who are gullible. In fact, the evidence shows that the more ridiculous the claim in the first email are, the more likely the scammer is to make money from the scam because only the catastrophically na├»ve will respond. He won’t waste his time trying to persuade you and me, he’s concentrating on our less skeptical friends, family members and neighbours.

Not only must we learn to read everything, we must learn to read things in the right way. Skeptically. Read things without believing them. Only believe things when reason, logic and evidence are there to support what has been said or written. Until then, don’t believe a word you read.

The Voice - Consumer's Voice

Can I change my mind?

Kindly clarify. I bought a dress from a store at Game City last week Wednesday. Yesterday I took the dress back as I did not use it for the intended purpose because it does not fit well. I also have evidence in the form of a picture, that indeed I did not wear the dress to the intended event, I wore a different dress. I had removed the tag from the dress but I had it together with the receipt. The shop took back the dress and told me that I cannot get my money back, and this is also stated on the receipt. I was further made to understand that I would rather get something in the shop for the same amount. So at the moment there is nothing that I want to get from the shop, and I was told I will get a call when new stock arrives, which they always do because I'm a regular customer. All I have right now is the receipt which shows that I have paid P1,099 and that I will go and collect an item of the same value from new stock. Also, if I find something that's worth a lesser amount I will not get my change back, it has to be the exact same amount or more. Now my question is, what if I don't ever get to find something that I like in the shop? Is this practise even lawful?

Yes, this is completely lawful.

As a consumer you only have a right to return an item if it’s faulty or if it was somehow mis-sold. If the dress had been second-hand, torn, was so badly made that you couldn’t wear it or disintegrated the first time you washed it, then you could have taken it back and you would have been entitled to one of the three Rs: a refund, replacement or repair. That’s your right as a consumer.

But you don’t have a legal right to change your mind.

In fact, the store could have refused to do anything for you. Think of it from their side. Have they done anything wrong? They sold you the dress in good faith, you presumably tried it on and chose to buy it and it’s not their dress any longer, it’s yours. Offering you a replacement item was actually quite a reasonable thing for them to do.

Sorry I don’t have better news for you. Hopefully something amazing will turn up in the store sometime soon.

Can I get a Range Rover?

I saw a post on Facebook which said “For the very first time on Facebook! We are giving out 10 Range Rovers to 10 lucky winners! From now till the August 10, 2016. Do you want to participate and WIN?”

Can this be true?

No, it’s certainly not.

I have some shocking news for you. You might need to sit down and take a deep breath before you read any further.

You can’t believe everything you see on Facebook.

In fact, you can’t believe everything you see on the Internet. Every time you see something remarkable or surprising on any part of the internet the first thing you should ask yourself is “Why is this liar lying to me? What does he want from me?”

In this case, there are no Range Rovers being given away. Companies like Land Rover just don’t do this. I’ve seen messages supposedly from a range of well-known companies such as British Airways and Emirates and even individuals such as Bill Gates offering free stuff if you just like their post and share it with your friends. But they’re not really from these companies and people, they’re fake. This is a form of “clickbait”, a trick to get you to click somewhere, boosting the popularity of a particular web page or Facebook profile, probably to increase their advertising revenue.

Please don’t fall for this. Don’t click on like, instead report the post to Facebook so they can remove it.

Friday, 5 August 2016

Logical thinking

Organic food causes autism.

Actually it doesn’t, but if you not a skeptic then you might think that it does. That’s because there’s a startlingly close relationship between the consumption of organic food and the number of cases of autism that are diagnosed. The lines on the graph that shows the number of cases of children receiving special education support in the USA and the sales of organic food products between 1997 and 2009 are identical. For the nerds amongst us it’s a correlation coefficient of 0.9971 with a p-value of 0.0001. It’s a scientist’s dream to find a relationship between two things as close as that.

Source: Genetic Literacy Project

But do you really think it’s true? Do you really think that organically produced food causes learning difficulties among American children? No, it doesn’t. Something else behind the scenes is affecting both of these things.

There’s actually no evidence that levels of autism are increasing. What’s actually increasing is simply the diagnosis of autism. Doctors are now better educated and notice it more readily. They now have a diagnosis that they are willing to use instead of just calling a child “retarded” or “slow”.

Autism has had its share of controversy. The internet is full of shameful, dangerous lies that suggest that autism is caused by things as varied as genetically modified food and vaccines. These are nothing more than lies.

At the same time a growing middle class around the world believe that so-called organic food has something to offer them. They’ve been led to believe that food produced without the use of “artificial” fertilizers and pesticides is somehow better for them than food produced conventionally. In fact, there is absolutely no evidence for this. Simply none. There is absolutely no evidence that the truly minute traces of synthetic pesticides and fertilizers used in modern agriculture that might be found on the food we eat are hazardous to us.

The proponents of “organic” production will argue that the chemicals are dangerous and that’s certainly true. But only if you consume them in very large amounts. Yes, the workers in the factories who produce the chemicals are required to wear safety gear but that’s because they’re dealing with tons of them, not almost invisibly small quantities.

What the organic movement often fail to mention is that their preferred fertilizer, manure, is a much more dangerous product. The biggest danger to consumers from food is E. coli, the bacteria found in cattle poo. That’s what’s most likely to harm you, not modern pesticides. One study showed that consumers were five times more likely to encounter E. coli from organic food than conventional food.

In fact, there are only two things that organic food does guarantee you. The first is price. The last time I checked, the “organically” produced pasta at my local store was three times more expensive than the conventional type. I’d rather have three packets than one thanks.

The other difference is the environmental impact of organic food production. Some studies have suggested that organic food production is only half as productive as conventional farming. Organic production per hectare is enormously lower than conventional agriculture. A world facing massive population growth needs to be increasing productivity, not lowering it. Growing organic food is a massive step backwards.

Back to the point. Although there’s a lot of nonsense spoken about both organic food and autism, there is simply no direct connection between the two things. Neither of them causes the other. Both are in fact a sign of the growth in information over the last few decades. Frankly I blame the internet.
But I can understand why people fall for connections like this. The see two things happening at the same time and they assume they’re connected.

A good example is cancer. The number of people dying of cancer around the world is increasing. But is that caused by any of the other things that are increasing at the same time? Cellphones or cellphone towers? Genetically modified foods? The internet?

No, the growing levels of cancer are caused by people living longer. In the 21st century we now live longer (on average) than ever before. In the past we were much more likely to die from communicable diseases, warfare and poverty. Even with HIV, we’re now lucky enough to be living long enough to die from the diseases of old age like cancer. The irony is that the growing levels of cancer are a sign of success, not failure.

This is really all about a logical fallacy, that correlation implies causality, that because two things are related, one must be causing the other. However, more often than not there’s a third factor such as easier access to information, greater public education or better health.

Here’s a challenge for you. Can you explain why people with very large feet have much higher levels of income than people with very small feet? Do large feet really make you richer?

I think that critical thinking, skepticism and a basic understanding of logic should be taught in schools so that when our children emerge from their education they are already equipped with the skills to tell truth from fiction, to identify deceptions and to protect themselves. Otherwise we’ll still have people falling for scams, believing the lies told to them by the bogus pastors taking their money and handing over their money to people offering them remarkable profits.

Is that what we want?

The Voice - Consumer's Voice

They aren’t my messages!

Please assist. I bought an SIM card a year ago and ever since then I have been receiving banking details of what appears to be a former user of the number. These messages tell of the account number, where the withdrawal took place and how much is left. I am getting really annoyed by these texts and thinking of just posting the details on Facebook so that the owner of that bank account can do something about it because I am also concerned about safety of such info reaching elsewhere?

Firstly, please don’t post these details on Facebook. The former owner of this number doesn’t deserve to be embarrassed. Instead send me the cellphone number you bought and I’ll let the bank know so they can stop these messages going to the wrong person.

It really is very important that every time any of us change our cell numbers that we let the right people know what’s happened, most importantly our banks. I’m surprised that the previous customer hasn’t noticed that they aren’t receiving their alert messages any more. Wouldn’t you be worried if you stopped getting them? I know I would.

The former owner is also at some risk. Don’t they to get a call from their bank if they spot something suspicious happening with their account? I know I’ve received calls when I’ve been in another country from my bank checking that it’s really me using my credit card and although it’s sometimes a little irritating (it’s feels a bit like my Mum checking up on me) I recognize that it’s actually in my interest as well as theirs.

So let’s help our banks keep us informed about what’s going on with our accounts.

Is Pipcoin genuine?

Mr Richard, please educate me more about #PIPCOIN. Is it another pyramid or Ponzi scheme?

Several people have asked us about Pipcoin, asking if you can really earn the 35% monthly profit they claim. Is it real or a scam?

It’s a scam.

Their web site describes it as "Africa’s first P2P Cryptocurrency" and they say "you don't have to make contracts or pledge your property. In Pipcoin there are no lenders and no debtors. Everything is very simple: one participant asks for help – another one helps. The only thing that Pipcoin demands from its participants is to be honest and kind to each other."

This sounds just like the other big Ponzi scheme at the moment, MMM Global. A mysterious scheme where money just grows magically. Smartly, what they've done, just like MMM Global, is to claim to have invented a new currency. MMM Global has the bizarre 'Mavro', these guys offer you the chance to trade in their mysterious Pipcoin, something they're trying desperately to imply is like Bitcoin, a genuine virtual currency.

The closest they get to explaining how you can make your fortune is when they say that after joining the scheme “you will be exposed to many options of making income such as buying coins from a minimum of R100 to registering an affiliate for a bonus of 10%. Traders can only withdraw their funds after a month or can choose to leave it to grow higher as calculations."

That's just a sequence of words with precisely no meaning. And the 35% return? We all know, don’t we, that there is no genuine investment that can make that sort of return. If there was, don’t you think bank and big investment companies would be doing it? The only way they can pay out 35% is by using the payments from newer members to pay older members. That's called a Ponzi scheme.

Pipcoin is no more than a Ponzi scheme that can't explain how it works or where money will come from, that hints at the current sexy online currency issue and which claims you can make 35% profit per month.

Don't waste your time, effort and money in yet another scam.

Friday, 29 July 2016

Anarchy in the marketplace

I want anarchy in stores.

In fact, I want anarchy every time and in every place that consumers spend their money. I want to overthrow the existing powers and let consumers seize power.

On numerous occasions we’ve either been told ourselves or we’ve heard from consumers that they’ve been told how to behave by a service provider. I don’t mean about illegal, indecent or immoral conduct and I certainly don’t mean anything criminal. I’m not endorsing threats or rudeness. In fact, I’m entirely behind any manager who defends and protects their staff. While we can complain as much as we like we must remain polite. That’s part of our nature as a country. We’re a courteous people.

However badly you feel, I promise you that if you express your complaint in a calm, measured, reasonable manner your chance of getting a solution will be much, much better than if you go in furious. The reasonable complainant will probably even be thanked for his or her complaint. The shouting, rude ones will get the same treatment a friend who is a Managing Director gave to the customer who stormed into her office shouting and swearing, having already abused her receptionist and another customer. “Your contract with us is terminated. That gap in the wall over there is the door. Use it now.”

My problem is when companies tell their customers, the one who keep them in business, how they can voice their opinions. The ones who dictate how consumers are permitted to complain.

My message is simple. While dictating how your customers were permitted to complain might have worked in 1916, 1966, or even in 2006, it doesn’t work in 2016. Complaints procedures have gone. Like carbon paper, floppy disks and smallpox, complaints procedures have been relegated to the past.

I think it’s surprising that in 2016 you still see multiple-stage complaints policies being published. Just a few days ago a member of the Consumer Watchdog Facebook group posted the complaints procedure from a hospital in the public service. It has nine steps. The first person to receive your complaint should apparently be the Supervisor in Charge. If that doesn’t resolve your problem you then escalate your complaint to the PR Officer, the Hospital Manager, the Hospital Superintendent, the Ministry HQ toll-free number, the Deputy Permanent Secretary, the Permanent Secretary, the Minister and finally to the Office of the President.

My view is that any complaints procedure with nine steps has six steps too many. Worse still, the procedure started with this: “In case customers are not happy with service provided at any of the hospital department/Unit, they have to follow the procedure below”.

“Have to”? We are obliged to follow this procedure? Says who? Show me the law that says that and maybe I’ll agree to it. Or maybe not.

Until there is a law that says that any other provider of products or services, including a hospital, is entitled to tell you and me how we can express our opinions about them, we are free to complain exactly as we see fit. If you do feel the need for some structure then you can adopt the Official Consumer Watchdog Three Step Consumer Complaints Procedure.

Step 1. Complain to the individual who offended you. Whether it was the nurse who ignored your suffering, the rude waiter or the vanishing bank teller, that person is the person to whom you should first complain. If they refuse to accept your complaint or don’t show suitable humility and contrition, go to Step 2.

Step 2. Complain to the most senior person in the building. Their title will be something like “Branch Manager”, “Hospital Manager” or “Restaurant Manager”. Don’t bother with supervisors, administrators or team leaders, only the most senior person will do. If they don’t fix the problem, go to Step 3.

Step 3. Complain to the most senior person in the entire organization. Their job title will be something like “Managing Director”, “Chief Executive Officer” or “Minister”. In special cases you might accept people with titles like “Country Manager” or “Regional Manager” but it must be someone who has the capacity to frighten the person who originally offended you.

I’m not blaming the hospital for having complaints procedure that is much, much longer than necessary but I do think they need to get with it. Firstly, they shouldn’t be telling their patients, the taxpayers that fund the public service, how, when and where they should express their complaints. They certainly shouldn’t be telling them that they “have to” follow their procedure. Secondly, that procedure is absurd. It could take years to exhaust the nine steps and do we really even need to involve the President’s office? Isn’t something simpler required?

Service providers, whether they’re hospitals, banks or network providers also need to remember that it’s 2016. Whether they like it or not, and in most cases it’s the latter, social media has taken over. The age of writing and faxing letters of complaint has long gone. We are firmly in the electronic age, in fact the social media age. If your complaints procedures don’t include email, Facebook and Twitter then your competitors’ certainly will and they’ll be seen as the company that listens and is prepared to give customers some control over their own lives.

They also need to understand that despite what they think, they’re not in charge. The party with the power in the relationship is the consumer, not the supplier. The party who can choose to go elsewhere is the consumer. The party who can make or break a company is the consumer, not the supplier.

So let’s have some anarchy when we deal with the companies that sell us things. Let’s just ignore any attempts that are made to control us. Let’s be anarchists.