Saturday, 26 August 2017

Is Bitcoin an investment?

Bitcoin doesn’t show any signs of going away. In fact, the growing hype about it just makes it more and more appealing to people. The problem is that most of us know so little about this new currency that we’re open to being exploited by those who see Bitcoin as an opportunity to make money from us rather than from Bitcoin itself.

So let’s start at the beginning. What exactly is Bitcoin?

Bitcoin is a currency, but it’s not like any currency we've seen before. With Bitcoin there are no coins or notes, no bits of metal or paper you can put in your wallet or purse. This currency exists solely in cyberspace. It's a digital currency, sometimes called a virtual currency or more often a cryptocurrency. ‘Crypto’ refers to the fact that Bitcoin transactions are kept encrypted online.

The biggest problem about Bitcoin is that it’s confusing. As soon as you start researching Bitcoin you encounter terms like "blockchain", "distributed ledger" and "Bitcoin mining" and they’re hard to understand for us amateurs. There's also the confusion that your money is "out there" in cyberspace and not in your pocket. That's something new and hard to comprehend.

In fact the "out there" element is very new and innovative. The blockchain, an online database of Bitcoin transactions that records and confirms every transaction ever performed between people using Bitcoin, is hosted all over the world, not in one place. There is no central repository of these transactions, they’re all over the place. That’s the “distributed ledger”.

Then there are the so-called Bitcoin Miners, the people who run the computers on which the Blockchain is hosted. These miners, using enormous computing resources, can earn themselves Bitcoins by holding and verifying the transactions but it's important to know that the required level of computing power required to be a profitable data miner is way beyond individuals like you and me and can only really be achieved by "mining farms" with enormous processing power and energy consumption.

As I mentioned, one of the most important elements of Bitcoin is that it’s encrypted and as a result it’s currently extremely difficult for banking and intelligence agencies to track the payments that are made using Bitcoin. It’s effectively impossible to see what someone is buying or who they’re paying. Whether it’s you buying a plane ticket or your neighbour buying drugs, child pornography or explosives, the transactions are untraceable. For some that allows them some reasonable privacy, for others it’s a great way of hiding criminal and terrorist activities. This scares law enforcement agencies all over the world.

Despite all these issues I suspect that Bitcoin, or maybe something like it, might be the future of money. Many of us already use international online payment systems such as Paypal and Apple Pay and local money transfer services like eWallet, MyZaka and Orange Money but they're all based on currencies that we know. Bitcoin is the next step along the monetary evolutionary staircase. Not only is it an online payment mechanism but it’s a currency of its own.

But it's highly risky.

Bitcoin is still so new that even financial experts have no idea of what it's future will be. Some are already saying its days may be numbered. What's more, and despite what some proponents are saying, its value can easily go down as well as up. If you bought Bitcoins in November 2013 you would have lost 78% of your "investment" by January 2015. Before anyone criticizes me for using those figures I admit I chose the highest and lowest values but my point is that it's volatile. All currencies are volatile but Bitcoin is clearly even more volatile than others.

Today the value of a Bitcoin has increased dramatically again. At the time I’m writing this, the value of one Bitcoin is over $4,000, more than twice the value it had three months ago. Those of us who were considering buying a few months ago are probably kicking ourselves right now but does that mean we should buy into Bitcoin now? Just because the value has increased so much recently, that doesn’t mean that rise will continue any further. In fact, while many people are encouraging us to “invest” in Bitcoins, many others are warning against the same thing. There is absolutely no guarantee that Bitcoins will continue to increase in value, no guarantee that it won’t crash and burn.

The biggest complication that worries me is that Bitcoin is surrounded by scams and people desperate to exploit our ignorance. On Facebook you’ll see a number of advertisements for people making the most of the Bitcoin name. For example, I saw an advertisement announcing the “Bitcoin Revolution with BitClub Network” at a hotel in Francistown next month. The ad proudly displayed images of the three “Bitcoin Entrepreneurs” who would appear at this revolutionary event and that amused me. Is there such a thing as a Bitcoin Entrepreneur? Is there such a thing as a Pula entrepreneur? A Dollar entrepreneur? A Rand entrepreneur? Of course not.

You have to ask yourself this. If someone came to your town and advertised a seminar on making money from the US dollar, would you think of attending? You should also ask yourself this. How do these “Bitcoin entrepreneurs” benefit from you attending the workshop or joining their scheme? If they have a way of making money from Bitcoin, why are they offering to share it with you and me? Doesn’t this sound a bit suspicious to you? It certainly does to me. In fact, my view is that BitClub Network shows all the signs of being a pyramid scheme. The reason these people are trying to recruit other people is that they make money from new people joining rather than from the value of Bitcoins.

My recommendation is simple. If you’re tempted to “invest” in Bitcoins then do so but understand that it’s a very high risk place to put your money. Like any other such investment you should only invest money you can afford to lose. Don’t invest the rent or your loan repayments and don’t trust anyone who wants you to join their Bitcoin scheme.


Note: In the print version of this article I erroneously referred to "Data Miners" instead of "Bitcoin Miners".

Friday, 25 August 2017

The Voice.- Consumer's Voice

Where’s my laybye?

I need your advice and help. In March I placed laybye at a store at BBS Mall and the due date was 11th July. I had misplaced my receipt so I went to the store about a week ago to inquire if I can collect my clothes without the receipt and they clearly said No. The lady advised me to go look for the receipt, I asked her what will happen if my laybye expires and she said I could take something from the shop with the money I put down for laybye which was P105.

I found my receipt yesterday and I went to the store to collect clothes. To my dismay the lady told me that I long collected my clothes on the 21 of July but I swear I never collected the clothes. I even showed them the receipt and they refused to refund my money or let me get something amounting to that money. I know its not that much but for me P100 is a lot of money as I’m a single parent caring for my kids alone, so a big shop like pep to cheat its not right. How can I be assisted?

There are several things you can do. Firstly, you can suggest to them that they have breached Section 17 (1) (d) of the Consumer Protection Regulations by “causing a probability of confusion or of misunderstanding as to the legal rights, obligations, or remedies of a party to a transaction”. I think that by telling you that you have no rights to the goods you paid for and without offering any proof that you really collected the goods already, they’ve clearly caused some confusion about your rights, haven’t they?

Another thing you can do is go to a Police Station and ask them to intervene. If the store is claiming that someone has taken the goods you paid for then a crime has been committed, against both the store and you. Ask the police if you can make a formal statement that you did not take the goods and then present that to the store, assuring them that if you are shown to have lied when making the statement, you’ll willingly submit to prosecution for making a false statement.

Finally, we can get in touch with the store to ask them to be a little bit friendlier. Because so far they’ve been the exact opposite of that!

Who should pay for the goats?

Hello sir I need your help I bought some goats from someone and then we agreed with one another to keep the goats at his place until the transfer went through. We didn’t agree with any payment he was saying those goats are for security until the money went through and it takes 14 days for the transfer so now the money went through into his account and he is saying I must pay for the feeds for that 14 days so can you please help with that one. What can I do?

I think this is a very good example of a situation that wouldn’t have occurred if your agreement had been put in writing. If you’d sat down together and written a sale agreement you both would have known who should pay for what and you would have avoided all doubt. I always suggest that whatever it is you’re selling or buying, both sides benefit from having the agreement in writing. That way if there is ever any disagreement you have that agreement to go back to.

Incidentally, what sort of money transfer takes 14 days in 2017? There shouldn’t be any reason for such a long delay.

Given that you don’t have a written agreement to rely on, I suggest you offer a compromise. The other guy did incur costs feeding the goats during the time the money took to transfer but it wasn’t something you had agreed to pay for. Why not suggest to him that you’ll split the costs between you. Maybe he’ll be reasonable?

And next time? Get it in writing!

Friday, 18 August 2017

The small print

It’s not the big things that will hurt you, it’s the little ones.

We all know that the most dangerous mammal in Africa is the hippopotamus, don’t we? Except that it’s not true. The most dangerous mammal in the one you see in the mirror every morning. Human beings are much more likely to kill you than any other two or four-legged creature. Even more dangerous are the critters with six legs such as the mosquito. Even more dangerous are the ones even smaller with no legs at all: bacteria and viruses.

As consumers, the same rules apply. The big, obvious, “in your face” things like advertisements, special offers and fancy displays of goods in windows are seductive but it’s not them that will end up hurting you. It’s the little things that will do that. The little words in the contract you sign. The words you either didn’t read or didn’t understand.

Despite being a passionate believer in the liberal, free market this is an area where my former radical left-wing opinions still sometimes appear. The capitalists are screwing us, the workers. That’s because they can afford lawyers and we can’t. Or perhaps they can just afford better ones than we can. They can write contracts that exploit our ignorance, naiveté or laziness.

Mmegi readers will know that the leader of Tibetan Buddhism, Tenzin Gyatso, the 14th Dalai Lama was due to speak in Botswana, probably right now as you are reading this. However, following his “exhaustion” he was forced to cancel his appearance just a week before he was due to arrive. I’m not going to comment on the politics of this. As you’ll all know the Chinese government were very angry with us and our government for permitting him to come here and exercise his right to speak his mind on such dangerous topics as spirituality, Botho and Ubuntu. No, I’m really not going to comment on their bullying tactics, colonialism and contempt for our tradition of free and open speech. No, I really won’t.

Instead I’ll avoid such sensitive subjects and talk about the contract that applied to anyone who was planning to attend the event and listen to him speak. Several people have asked for our advice following the cancellation and how they should address the organisers who have apparently said that the money people paid to be there either won’t or can’t be refunded. Is this reasonable, they ask?

In fact, what matters most is not whether their refusal is reasonable or not, what actually matters is what the contract says.

In the contract that apparently applies to this event, there is a clause that says:
“The Organizer reserves the right to modify the program without prior notice. The Organizer may announce possible program changes on its home page and/or at the venue of the event.”
Yes, technically speaking, the non-appearance of the key person at the event, the keynote speaker, the (almost) universally respected leader of a global religion is a “program change”, in the same way that KFC without chicken, a bar without beer or a bank without money would be a “program change”. And yes, the Dalai Lama was only one speaker at the event, there were plenty of other people scheduled to say their thing. But can you name even one of them?

KFC can give you chips without chicken, a bar can serve you lemonade or wine and a bank can pester you with Know Your Customer information demands, but a Dalai Lama event without the Dalai Lama is different.

But regardless, there’s no refund and that’s probably understandable. The organisers have already paid a deposit for the venue and the catering, bought flights for the other people who were going to speak and paid staff their salary for persuading people to stand up against a foreign government determined to tell us how to run our country and dictate who can speak their minds here. Whoops, I went there again, sorry.

So they’ve incurred costs and a full refund probably isn’t morally possible but the small print is what matters most. In fact, it’s the only thing that matters. But maybe the organisers should have followed the advice offered by a member of our Facebook group. Why didn’t they take out insurance against this happening? It would have added to everyone’s costs but it would have enabled them to offer their disappointed customers something instead of just irritation and frustration.

The thing that worries me most is how often we hear from consumers who are faced with financial ruin because they didn’t read a contract. Or perhaps they did read it but they didn’t understand it. It doesn’t matter whether it’s a furniture store’s hire purchase agreement, an insurance policy, a cellphone contract, a banking agreement or a lease, so many people simply sign on the dotted line and don’t take the time to understand what it is they’re committing themselves to. And then they get into trouble.

Perhaps the most unsettling clause I ever saw in a contract was in a hire purchase agreement. After several pages of tiny text, including a mixture of Latin, long words and confusion, it finished with a statement something like “I have understood this agreement and promise never to say that I didn’t”.

So what should we do? How can you and I protect ourselves? The first thing is simple. Never, under any circumstances, sign a document that you haven’t read and understood. Secondly, always ask to take an agreement away with you so you can read it at leisure. Go back the next day and sign it if you think you commit to it. If a store won’t let you take the agreement away then ask yourself what it is they’re trying to hide.

Another thing you can do is take control. Just above your signature, write something like “I do not agree to clause X”, or “I have not read or fully understood this agreement”. Maybe even cross out and initial any clause you don’t like. Always write “Not inspected or tested” on any delivery note you ever see.

Above all, understand the importance of your signature. If you sign it, you’re committed and there’s often no way out.

UPDATE: The organisers have stated that refunds WILL be available to those who request them. Good news!

The Voice - Consumer's Voice

Where’s my ring?

Hi Mr Harriman. I bought a ring worth P4300 in a certain company and it got damaged the upper part detaching. Their policy says they can either repair or replace or refund. I took the ring to them and they said they can repair in 2 weeks. Two weeks is over and they called me to say they haven’t found the parts to repair it and I should start counting another 3 weeks. I don’t agree because I have waited too long. The ring was 3 months old. Do I have the right to ask for an exchange or refund because I can’t wait for another 3 weeks. My marriage is new and it pains me to live without my ring.

I agree with you entirely. You’ve waited too long. You spent a huge amount of money on an item that was incredibly important to you, something of enormous sentimental value. A wedding ring isn’t the same as a watch or a necklace, it’s meaningful and the delay that this company has caused you is completely unacceptable.

The store is right that they are required to offer one of the three Rs, a refund, repair or replacement. They’re also correct that it’s up to them to decide which of the three they offer you. However there a limits. They had three weeks to repair the ring and although I’m clearly not an expert on jewellery, I can’t imagine why it should take so long to repair a wedding ring. I think you have the right to escalate the situation a bit. I think you’re entitled to tell the store that they’ve had more than enough time and that now you expect a solution within a week.

I suggest you tell them that a repair or a replacement are now the only solutions you will accept. We’ll also get in touch with them and see if we can’t get them to accelerate things a bit.

Is Helping Hands International ok?

Please help. Is Helping Hand International with its money pyramid a genuine NGO and is it registered in Southern African countries?

Helping Hands International is a pyramid scheme. The people marketing the scheme have described it as a “non governmental organization” attempting to “empower the less privileged people and orphanage homes”. They also claim that joining the scheme will offer a variety of things, including “passive income”, new cars, laptops, a “house of your own”, free trips abroad, loans of up to P500,000, scholarships and “residual income for life” but none of this is true. Not a single thing.

Unlike Multi-Level Marketing schemes like Amway and Herbalife, Helping Hands International has no products and its business is based entirely on recruiting people beneath you and those recruits recruiting people beneath them. Everyone joining is promised the prospect of money magically flowing in their direction. That’s what we call a pyramid scheme.

Some months ago I had a WhatsApp conversation with someone who was busily recruiting people into Helping Hands and I asked him “So you earn money by recruiting other people? I don't have to sell anything, just recruit more people?”. His answer was simple. “Yes Sir”. See, the scheme’s own recruiters even confess it’s a pyramid scheme.

They’re also liars. Their advertisements claim that they are “in partnership with Bill Gate Foundation, Hyundai Motors, Apple Corporation, HP” but in reality there are no such partnerships. Reputable people and companies like these don’t endorse pyramid schemes like Helping Hands International.

In summary, this is nothing more than a pyramid scheme run by people who tell lies. Like all pyramid schemes Helping Hands International will eventually collapse, leaving its victims disappointed, embarrassed and poorer. Do you really want to be a victim? Please warn everyone you know about them. Let’s spread the word and help protect our family, friends and neighbours.

Friday, 11 August 2017

Are we all pirates?

I caused some disturbance in our Facebook group last week when I posted the details of a conversation I had with someone who posted an advertisement in the group. His advertisement offered a range of technology services including “Laptop repair(any problem)”, “Theory Test Software(for Laptop/Desktop & phones” and “*asswords removal both pc & phone” but the one that interested me most concerned Windows.

The ad offered “Operating system Windows 7,8,8.1,10”. I messaged the guy and asked him how much Windows 10 would cost me. “p100”, he told me. Given that Windows 10 currently costs about ten times that much if you buy it directly from Microsoft, I’m sure you can understand that I was suspicious. “Is this legal”, I asked? “What's legal??upgrading your machine??that's ur laptop u do whatever u want...”, was his response. I asked if this wasn’t software piracy and he said “No sir if you know IT that's not a piracy”. My final question was “Are you paying Microsoft their licence fee?” and that when he lost patience.

“Old man get your facts together then talk to me when ready I got no time to argue with u let me help those who want my service”.

I posted this exchange as well as a copy of his original advertisement so everyone in the group could see it and the reaction was mixed. The overwhelming majority expressed surprise or shock at what was clearly software piracy but a vocal minority had different reactions. One member of the group said “Leave the guy alone, why are you trying to disturb his hustle”. Another asked “How are you ripped off when he sells a software worth more the P1500 to you for P100?” Someone else suggested that “That's how the world works, until then, let the guy be, hes trying to make cash akere”.

I should state that I admire small entrepreneurs, those people who try to make some money the hard way, by hitting the streets (or Facebook) buying and selling things, trying to make a profit. But I don’t admire hustlers. My dictionary defines the word hustle as “to obtain illicitly or by forceful action” and that’s an approach we shouldn’t accept. I also don’t admire thieves.

And yes, I do think this guy is a thief. The simple truth is that the only way he can afford to sell people copies of Windows 10 for on tenth of its normal price is if he is selling pirated copies of the product. And selling pirated copies of anything is a form of theft. The fact that it’s common is no excuse. Many people exceed the speed limit when they’re driving and drive through red lights but does that make it right? Does the frequency of a crime excuse that crime? No, it doesn’t. It also doesn’t matter that someone else might have done the same thing. That doesn’t excuse you doing it.

The fact that the person or company having its products stolen is fabulously wealthy is also irrelevant. Software pirates aren’t modern-day Robin Hood figures robbing from the rich to give to the poor, they’re keeping the money for themselves.

It’s also important to know that they’re selling you a product that probably won’t work properly. Companies life Microsoft are smart enough to build protections into their technology to ensure that piracy is difficult for its consumers. Sooner or later the computer running the pirated version will connect to the internet and then will declare itself to Microsoft’s servers and will then start the process of shutting itself down. One member of the group appears to have that problem, posting “My software is not genuine. My laptop keeps on popping that message whenever am using it”. Eventually the software is going to stop working completely.

Not everyone was sympathetic to our pirate. One member of the groups suggested that if “you are comfortable buying pirated software, then you might not mind buying a stolen cellphone or tv.” Another described his customers as “being ripped off by unscrupulous crooks masquerading as businessmen”. Yet another correctly suggested that his services should be avoided because “he's breaking a handful of laws in doing so and making the recipient a criminal as well.”

And that’s a very good point. Section 317 (2) of the Penal Code says that:
"Any person who receives or retains any property knowing or having reason to believe the same to have been unlawfully taken, obtained, converted or disposed of in a manner which constitutes any other offence, is guilty of an offence and is liable to the same punishment as the offender by whom the property was unlawfully obtained, converted or disposed of."
Meanwhile I also acknowledge that Windows 10 is an expensive product. It comes already installed on almost all personal computers but if you need to buy it new, you’ll need to pay about P1,200 online and more if you go to a computer store. If you add the price of Microsoft Office on top that’s roughly the same price again so it really can be an expensive business.

But the irony is that you don’t need to spend any money at all to get a computer working. You don’t need to spend a single thebe on Windows or Office if money is tight.

The alternative is to be radical. Go for an entirely legal, safe and free alternative to Windows. Yes, I did say “free”. Install a version of Unix such as Ubuntu or Linux which you can download for free and it even comes with the equivalent of Word, Excel and Powerpoint and is really easy to use. Better still it even runs on the older, lower power computer you might have. I’ve done it several times and I have computers at home and in the office running Linux right now. Even better still, like its distant cousin, the Mac, a computer running Unix is almost immune from viruses and malware?

If money is short (or even if it’s not) the alternative is there. You don’t need to spend your precious, hard-earned money with Microsoft or even a hustler selling you stolen goods.

The Voice - Consumer's Voice

Must I pay so much?

Kindly assist me with information and possibly solution.

Someone borrowed P5,000 from a motshelo. I had referred him to the lady. He did not pay as per agreement. It took long but I ended up paying P13,000 for this P5,000. The lady insists that she is owed P27,000 for this P5,000.

What help can I get if any and where can I get the help? Please note this is not a registered micro lender.

I would really appreciate your assistance with this.

I think the lady should stop smoking whatever has driven her insane.

This is nonsense. The “in duplum” rule, a piece of common law applicable in Botswana says that when a debt is settled, the interest charged may not exceed the capital amount outstanding. If the original amount borrowed was P5,000, the interest at the time you settle the debt cannot legally exceed that amount. The lender can charge a modest amount for administration costs but they can’t use that to avoid the in duplum rule.

Also, although motshelo schemes are “informal”, they are nevertheless covered by NBFIRA, the Non-Bank Financial Institutions Regulatory Authority. I suggest you call NBFIRA tomorrow and ask for their advice. Their numbers are 3102595 and 3686100. If you can’t get through to the right person let me know and I’ll find someone there for you.

Is this loan genuine?

I received an email from a company called African Loans offering to lend money. I applied for a loan of 15,000 Euros and they have asked me my banking details and a registration fee of 215 Euros. They say they will lend me the full 15,000 Euros and I must pay them 638 Euros monthly for 48 months at an interest rate of 2% per year. They say that the total monthly payment will be 15,314 Euros.

I’m concerned because I have also lost a lot of money through the 419 scams by Nigerians.

Could you please check this one out for me?

I think you know this is a scam, don’t you? Given that I can see from your email footer that you work as a finance officer, I’m sure you’ve done the maths already. 48 monthly payments of €638 is a total of €30,624, more than twice what they say it is. Also, I’m sure you will have calculated that interest rate they claim they’ll charge is 26% per year, not 2%. Tell me you noticed that they can’t do maths?

You’ll also have wondered how a lender would claim to lend anyone money at a level lower than the inflation rate either in Botswana or anywhere else, and so much lower than your bank can do.

I also hope that you’ve wondered why a genuine finance company would use a Gmail address ("") rather than a more business-like one? I’m certain that you’ll also have wondered why a company that says it’s based in Europe would consider lending money to someone in Africa.

Again, I’m sure you’ll have wondered why you need to pay them a “registration fee”. You’ll have tried to remember the last time your bank tried to charge such a fee, wouldn’t you?

Given that you fell for a 419 “advance fee” scam in the past I’m sure you’ll have noticed the overwhelming similarity between that scam and this loan offer? You’ll remember how the previous scammers offered you, a total stranger, something amazing so long as you gave them money in advance. You’ll remember how you didn’t get that money back. You’ll have learned that scammers don’t offer refunds if you complain.

Please tell me that you saw all these things? Please?

Friday, 4 August 2017

The Voice - Consumer's Voice

Can they keep my money?

Hi Richard. I went to a bed shop a month or two ago and saw a bed was interested in but I was told I can laybye it for 6 months. Unfortunately I am no longer working and won't be able to pay my monthly so I opted to cancel the laybye and they are saying they are going to charge me something out of the money I already paid. This was never explained to me when I took the laybye so they just won't refund me.

There were no instructions whatsoever on the laybye regarding the terms and conditions.

Are you sure there wasn’t a form you signed explaining the conditions of the laybye? I’d be surprised if a reputable store didn’t insist on a written agreement for this sort of purchase. If there isn’t how can they expect to know who owes what to who?

In normal circumstances I can see how a store might want to charge you a small fee because of the minor inconvenience you’ve caused them when you cancel the deal. They’ll need to update their records to show that the bed is no longer reserved for you and they might even have turned away another customer who wanted to buy the bed. This will have cost them some money through no fault of their own.

However, if there isn’t such a written agreement then I can’t see how they can demand that they keep a portion of what you’ve already paid them. They can’t just make up conditions to suit their interests. Section 15 (1) (e) of the Consumer Protection Regulations says that a company fails to meet minimum standards of performance if, when a deal is cancelled, they fail to pay back a down-payment or deposit “promptly”. Section 17 (1) (d) also says that they can’t cause “a probability of confusion or of misunderstanding” regarding your legal rights” by just making up conditions when they feel like it.

I suggest you go back to the store and ask them to show you where you agreed that they could deduct any amount from your payment. If they can’t then they have no right to do so.

How much interest can they charge?

I wanted to ask if it's within a Shop's right to charge one interest in a store card that is way more than what that said person owes them? E.g. Maybe I owe them 5,000 and I don't pay them for 1 year because I'm not working can they charge me interest monthly and then the amount I owe becomes 15,000?

Yes, they can. There are no limits to what a lender can charge you with one exception. That’s the so-called “in duplum” rule which says that when a debt is settled, the interest cannot be greater than the capital amount that is remaining. So if you go to them owing P5,000, they can’t charge more than P5,000 in interest. But that’s only at the time you settle the debt in full. If you’re paying the interest over an extended period then there’s no limit. That’s why if you buy something using hire purchase or have a long-term bank loan the interest could exceed the capital amount.

Meanwhile you’re entitled to a full statement of your account that should show you every payment you made, every charge they applied and the penalties and interest they applied when you were in arrears. I think you should ask for such a statement and check that their records are correct and that their arithmetic is correct.

As for the numbers they’re quoting they seem possible to me. The costs of using store cards and buying on hire purchase are enormous and if you get into arrears they can be even greater. Our advice is to avoid hire purchase and store cards like they’re an infectious disease. While store cards are sold to us by stressing their convenience and the ease with which you can buy things, the real reason stores want you to have them is that they make separating us from our money so much easier. If you do ever get one please make sure that you read and understand the terms and conditions before you sign the application form. If by any chance the store won’t let you take the T&Cs away to think about it, then you know they have something to hide!

We're ignorant

Last week I asked whether we’re stupid. This week I’ve been wondering if we’re ignorant. The answers are very different.

No, I don’t think we’re stupid, at least not all of us. Yes, we’ve all heard stories of consumers doing things that can only be described as stupid, like lending large amounts of money to total strangers without a written agreement but most of us are smarter than that, aren’t we? Most of us know to sign agreements that we’ve read and fully understood and that don’t screw us, don’t we? Please tell me that’s true?

Let’s assume that only a few of us are stupid. So that’s ok. I think that there’s a threat just as dangerous as stupidity and that’s ignorance. Don’t get confused, they’re not the same thing. Stupidity is the lack of ability to think properly, ignorance is just a lack of information. I’m fairly ignorant about the electrical systems in motor vehicles but that doesn’t mean I’m stupid. I also know almost nothing about gardening, dress-making or the traditional religious belief systems in Mongolia. But that doesn’t make me an idiot.

The problem is that ignorance threatens consumers just as much as stupidity. It puts us at the mercy of suppliers who don’t have our interests at heart or those who are actively trying to deceive us. The simplest example is with modern technology. Most of us know very little, perhaps nothing at all, about the technology that surrounds us. We don’t know how our cellphone or laptop works, how messages travel through the internet or how that video connection to our cousin in a faraway country happens. So long as it works we’re happy.

You might ask if it even matters? So long as it works, my emails arrive, I can chat to cuzzy and I can make that call, who cares how it works? That’s true in those cases but what happens when the laptop goes wrong and the company repairing is say you must pay them P2,500 for a new motherboard? Do you have any idea whether they’re telling the truth or not? What happens when you’re buying a replacement and the salesperson just starts talking about kilo-this, mega-that and giga-the-other. Do you understand a word they’re saying?

It’s no different with financial products. Very few of us are sufficiently well-educated to know the difference between different types of investments and we rely on the salesperson to give us the information we need. The same salesperson who is probably paid a commission on the size of your investment, not how well it suits your needs.

In all of these areas we need suppliers of complicated products, whether they’re computers, cellphones or investment policies to educate us openly and fairly, taking our interests into account. But you know they’re not going to do that, don’t you? So we need to force them.

Here’s a simple tip for you. Whenever someone claiming to be an expert in their area tries to explain something complicated to you and you don’t understand, use this phrase:

“Explain that do me again but this time imagine I’m only 12 years old.”

If that doesn’t work, try this one, my personal favourite:

“Explain that to me again, but using different words.”

Anyone who’s a real expert in their field will be able to do either of those things easily. Anyone who can’t clearly isn’t an expert.

There are also areas where we’re ignorant simply because we’ve never experienced something before. Bitcoin is the best example right now. As you might now by now, Bitcoin is a currency, but not like any currency we've known before. There are no coins or notes with Bitcoin, no bits of metal or paper. There’s nothing you can put in your wallet or purse. It exists purely in cyberspace. It’s a “cryptocurrency” and it’s all a bit confusing until you’ve done some serous research. Until then we’re ignorant? The danger is that this ignorance is being exploited by people who have only their own bank balance in mind. The crooks selling “Billcoin” and “Pipcoin” are doing their best to persuade us that their schemes are either similar, or connected to Bitcoin when in fact they’re nothing more than scams. Our ignorance in this area is likely to leave a lot of people very poor.

There are also situations when our ignorance of procedure presents a risk. Until last week, I didn’t know what you were meant to do when someone died in their home. The background isn’t relevant but we recently found ourselves alone in a friend’s house just hours after he’d died, having been discharged from hospital so he could die with dignity at home and surrounded by the people who loved him. Ok, we thought. What next? The first funeral parlour we called, one you all know, was unhelpful. No, we can’t do anything without a death certificate, they told us. But he died at home on a Sunday, we told them and no doctor was present. You need to take him back to the hospital so they can certify him dead, they told us. Can’t you do that, we asked, you’re the experts on transporting deceased people. Not without the death certificate, they said. You’ll need to take him back to the hospital so they can certify him dead, they continued. “Have you got a truck?”, they asked us.

That’s when we hung up and called a more sympathetic competitor. An hour later, a friendly doctor and the competitors’ team arrived and everything was sorted out. Between them, they’d been able to explain and provide some assistance.

I’m not asking for miracles but I think both the hospital and the funeral parlour have a duty to tell those of us ignorant about the technicalities of death how it’s meant to be. Why don’t hospitals produce a guide on what to do for those of us who are amateurs? Why don’t funeral parlours have a link on their web site that explains how the process should work? Why don’t they help us overcome our ignorance?

In this case our ignorance not only caused us some distress but it led to a big company losing business and receiving a formal complaint about their arrogance, lack of sympathy and stupidity.

Yes, I DO mean stupidity, not ignorance.