Thursday, 23 August 2012

Negotiating your bank fees

by Rob d'Apice
The many layers of bureaucracy that sit atop our world of mass-commerce have removed a fundamental truth about the relationship between buyer and seller: it's two people exchanging goods and services at a negotiated rate.

So when a bank imposes a $35 late fee on your credit card, instead of saying 'well - them's the rules!', why not instead call your banking provider and say: 'I'm not happy.'

You can do it. And it works. 

Example 1: $150 cash for not cancelling my card. I called to cancel I card I'd signed up for as part of a promotion. I told them I wasn't interested in the card and I didn't think the rewards were competitive. They put me on hold, and when they came back, they offered to put $150 onto my account. For free. For me to spend. On anything.

Example 2: Halving an annual fee forever. I was charged a $250 annual fee on a credit card I had a few years back - the fee was lower in the first year and I forgot the 2nd year fee was coming around. I called and complain about the fee - I thought it was considerably higher than similar cards from other banks. I asked them to refund the fee and told them I would like the card cancelled. Eventually, they offered to halve the annual fee I'd been charged and halve it permanently if I kept it. I agreed.

Example 3: $200 worth of points for complaining. A friend signed up for a Balance Transfer credit card. She was transferring a large amount of money, and the application kept getting held up within the organisation. She called and complained about how long it was taking and the inconvenience this was causing her. They gave her 20,000 complimentary reward points (worth about $200) for her troubles. Bam.

Example 4: Refund my late fees. A friend once got a $35 late fee on their credit card - on about a $40 credit card debt. They had forgotten they had spent something on the card. After complaining about the fee - I've been a customer for X years and I don't think $35 is fair, I'd like to cancel the card - the bank apologised, refunded the fee and the interest he'd been charged over the previous month. Anything else I can help you with?

There are plenty more examples like this - but it's time for action! Pick up your phone and make sure you are getting a fair deal. Here are our five simple steps to making sure you get a fair deal from your bank.

1. Understand your alternatives

To equip yourselves for a negotiation, you need to be sure you understand your options. Are you unhappy with your credit card? Have a look at other options and find another product that you're genuinely willing to switch to if your bank doesn't improve their offer. It's good to have factual information about why you think this deal is better (they have a lower annual fee, they have a better interest rate, etc.)

Don't know how to compare? Don't worry, we've got that bit covered:

2. Explain your issue

The next step is to get on the phone with your bank, and calmly explain the situation. You should make sure you explain to them exactly what you are unhappy about - a particular fee, an unnecessarily high interest rate, etc.

The customer service people will explain to you how and why the fee occurred. This is fine, but remember it isn't about the what the rules were - it's a negotiation about what the rules should be in order for them to keep your business. 

3. Point to competitors

As with any negotiation, you need to show that you have other options. Don't be vindictive or accusatory - that isn't going to get anyone on side. Instead, you should firstly explain that you've been a loyal customer for X years, and that you've until now really liked the service you've received. You should explain the number of products you have with the particular bank.

But... you should say that this fee/interest rate/whatever has soured your view of the bank and you feel like the bank may no longer be looking out for you. You feel like you're being exploited.

Then... say you've already done some research and you're thinking of closing your account(s) and moving to the other product because of its better features [better interest rate/lower fees/friends have told you they are good].

4. Let the customer rep talk

Make sure you give the rep a chance to negotiate with you - don't be overly forceful or brief (just close all my accounts please!).

The rep will apologise for the situation, and will generally do a good job of trying to rectify it. They may offer other products in their repertoire that better suit you. Make sure you fully understand those other products and how exactly they'd be better for you. And if you are complaining about a particular fee, make sure they refund those fees for you as well as switch your products.

5. Be grateful

You've got a human on the phone, so don't be an arsehole. They didn't charge you the fee. Thank the rep for helping you out and wish them well.

Did the bank not try to save you? If the bank is combative and isn't willing to do anything to make you stay, you're probably with the wrong bank. If you're in a patient mood, try hanging up and calling back immediately - you may have better luck with a different customer service representative.

Have you ever asked for a better deal on bank fees or charges? Let us know in the comments below!

Wednesday, 1 August 2012

Haven't done last year's tax return?

by Rob d'Apice
It's 2012 Tax time.

For some: the prospect of some free money. For others: the fear of a hefty tax bill. But for a final group of chronic procrastinators: an anxious reminder that last year's tax return (and the prior year's? and the years before that?) is still unfinished.

Stop procrastinating. You've either got a tax bill that's accruing interest, or you've got a tax return that isn't accruing interest, and you need to fix it right now.

Step 1: Find your documents

You need a few things to make your claim. Search your pile of 'important paper' for:

  1. Your PAYG statements. You'll need the end-of-financial-year statements you got from your employer(s) in each of the tax years that you haven't completed a return for. If you're missing one, pick up the phone and get your employer (or ex-employer) to send you a new statement.
  2. Receipts for deductions. You may think that this is a lost cause, but hold up a sec. Do a search through your emails for 'receipt' - you're looking for anything that was an expense related to your profession. Search for 'charity' or 'tax deductible' - any payment over $2 to registered charities is deductible. If you're really keen, scan your credit card / bank statements for possible transactions

Step 2: Download old e-tax software

The ATO doesn't offer prior year e-tax software for download, but you can download them all here. You won't be able to submit them electronically, but e-tax will be able to print out your completed tax return for you - which will save you a lot of heartache with pen and paper.

Step 3: Take 5 minutes for some preventative medicine

Set up a folder in your email client called 'tax deductions'. Whenever you get a receipt that is tax deductible, send it to this folder (if it's paper, scan it in and chuck it in). This will save you time and money come the end of tax time this year.

But Prosple, I'm not going to do any of this!

Get an accountant. They'll do all the grunt work for you, and they are on top of the rules about deductions and documentation. They'll charge you a fee for their services, and this fee is also tax deductible.

Want some tax tips for maximising your return? Check out our tax tips from last year, which are all still relevant for this year.