Better Deals

Sellers like loyal customers. But some corporations are not returning the compliment by telling their customers regularly how they can get a better deal. Take these examples as illustrations:

Airlines don’t search their computer to get you the cheapest fare after you tell them where you want to go and how long you are staying.

Banks will let your loyal savings account wallow at the lowest interest rate even though they know your savings habits and have a higher interest rate offering that they are not telling you about. They might tell new savers, however, to attract new business to add to your loyal business. Tens of billions of dollars of savings account, many held by elderly people, are receiving the lowest rates year after year.

Then there is the case of Betty C. Shank who made a small down payment on her new home and was obliged to pay $42 a month in mortgage insurance to protect the lender in case she defaulted. She had paid off nearly all of the mortgage in 18 years but was still paying that mortgage insurance premium.

It took a class action lawsuit to get the lenders attention. Like many in the mortgage industry, this company neglected to tell borrowers that when the principal of their mortgage is paid down to 80% of the house’s value, they can stop paying this monthly insurance fee.

Conservative Congressman James Hansen (R-UT) spent four years trying to get his mortgage servicer to cancel the insurance on his condo. Fuming, this legislator, who is not known for his pro-consumer votes, filed legislation requiring notice by the lender so people can stop paying monthly this windfall to the mortgage industry.

General Electric Capital, a mortgage lender, is offering to save you much money over the life of your mortgage if you enroll in its new bi-weekly mortgage conversion program for an “inexpensive” $340 fee. Sounds great. Until you learn that you can avoid paying any fee and save even more by simply asking the lender to automatically deduct an equivalent pre-payment amount every month, advises the Pocket Change Investor — a regular financial advice newsletter.

The same newsletter shows how many folks still pay top dollar to AT&T, MCI and Sprint — the carriers’ highest rates — until they call their company and ask for the least cost plan.

Companies do not seem, in many cases, to advance the ethical principal of advising their long-time customers about the best deal that they often propose to new customers to get them on board.

So, the best advice is for you to always and regularly ask the company you are patronizing: “Are you giving me the best deal and are you offering me the same good deal, as a long time customer, that you are giving your potential customers.