United First Financial (Scam Warning)

[BartBandy]

Updated monthly MMA sales for 2009:

Jan 3,473
Feb 2,177
Mar 2,428
Apr 2,058
May 1,353
Jun 1,092
Jul 849
Aug 710
Sept 583
Oct (no data)
Nov 369

Remember, there are almost 70,000 UFirst agents.

Monthly MMA sales are now down 89% since the start of the year. Two senior software developers have quit (Ben Day and Eric Jensen). Over 300 BizPack clients cancelled. Their IT staff are working on a 32 hour work week. They laid off Carol Eaquinto even though it was her job to prevent refunds (she is threatening legal action against UFirst). All this on top of more IT and call centre layoffs.

On a positive note, they are trying to incorporate Yodlee online banking usability into version 5, which would actually address one of my minor criticisms about how bad the MMA is to use. It'll still be a huge rip-off, slow at repaying debts, dangerous, etc., but at least it will have a slicker interface.

Of course, if Version 5.0 is full of bugs like version 4.0 was, no new feature will be worth the hassle.

[sslinn]

Have you looked at the new SmartEquity program in Canada? Same type of thing, less expensive and only available through mortgage brokers.

[BartBandy]

SmartEquity is another product that has entered the Canadian marketplace. From what I see it is exactly the same, just a little cheaper.

Have you looked at the new SmartEquity program in Canada? Same type of thing, less expensive and only available through mortgage brokers.

Just did a google search. You're right, their marketing looks like it was ripped off from UFirst.

United First Financial marketing graph:


SmartEquity marketing graph:


SmartEquity cost:

The cost will be 1595.00 plus GST plus 75.00 annually after the first year plus a mortgage broker placement fee. The mortgage broker fee is decided upon the mortgage broker; minimum is 'zero' and the maximum allowed is $800. So a client will pay $1595 (plus GST) plus the mortgage broker fee. A range of $1595 to $2395 (only the $1595 is charged GST; broker fee is non GST).

Ridiculous cost? Check. Ridiculous marketing? Check.

They claim not to be a MLM. I have my doubts about that, but I didn't look into it deeply, and it doesn't really matter. They really seem to think their similarities to UFirst is a good thing.

From here, the smart money says SmartEquity is a scam.

[BartBandy]

December 2009 MMA sales were down again. This time, to 278.

Jan 3,473
Feb 2,177
Mar 2,428
Apr 2,058
May 1,353
Jun 1,092
Jul 849
Aug 710
Sept 583
Oct (no data)
Nov 369
Dec 278

From January 2009 to December 2009, MMA sales dropped a whopping 92%. That's 70,000 agents, or one sale last month for every 251 agents, on average.

Anyone still think this is a money-making opportunity?


Also, a conversation I've been having with a UFirst agent for the past few months on another Canadian site has reached the attention of UFirst head office. Their only consolation was that is was on "some Canadian website, not very popular at all". Well, RFD is a Canadian website, and a little more popular. Read it if you want to, but it's a long conversation:

http://www.canadian-money-advisor.ca...view/1238.html

Scammers. It's what's for dinner.

[BartBandy]

Sent April 19th

NOTICE TO ALL ALBERTA, CANADA, AGENTS
Pending further notice, all Money Merge Account® sales in Alberta, Canada, are temporarily suspended. Due to the complex nature of Canadian business regulations, United First Financial® must take additional steps to ensure compliance and therefore your continued success with the Money Merge Account program.

We are also working to obtain special provincial licensing, and will notify all affected Agents when we complete the process. We thank you in advance for your patience as we endeavor to bring the satisfaction of financial self-reliance to our esteemed customers and Agents.

UFirst™ Legal Department

I'm hoping to find out why UFirst had to suspend operations in Alberta. Perhaps the problem extends to all provinces. If anyone has more information, please forward it to me, and I'll be happy to send it along to the correct people in every province.

[sslinn]

I am guessing that is wasn't profitable and using "compliance" as a reason was the cope out. I don't imagine those agent who got sucked into the software doesn't want to hear that the product sucks.

I am not sure what they would have to comply with at all. They are just marketing pricy software.

[sslinn]

My grammar sucks at this time of the morning and I can't edit on my bb.

[BartBandy]

I considered that, but if that were the case, they would have suspended sales in Canada - not just Alberta. It may be that there are no Canadian sales outside of Alberta!

[KenMc]

I was asked about this company by a friend in the U.S. They are a mortgage acceleration company. Further, they sell their software product (actually - web app access) through independent agents - most of whom are clients who purchase the option to become "agents" for a nominal fee. Most of these people are not financially savvy, or they wouldn't have become clients in the first place. Here's why:

United First Financial (UFF) espouses the Money Merge Account (MMA) strategy to pay off your mortgage. This involves the homeowner to take out a Home Equity Line of Credit (HELOC - or ALOC) against the equity they do have in the home. The first $3500 USD goes to UFF. No joke. Their fee is $3500, and paid right from this line of credit. The selling agent shares in a $2500 commission with those "up-stream". Again, $2500 commission on a $3500 product.

The homeowner then rolls all chequing and savings account money into the HELOC. Cheques are deposited to, and written from, the HELOC.

The homeowner inputs all the relevant information into the software regarding the mortgage, plus household income and expenses. By logging in once per month, the homeowner is told by "algorythms" how to move money between the HELOC and the 1st mortgage, in such a way as the mortgage can be paid off "in less than half the time", "with little to no change to their day-to-day spending habits and without increasing their minimum required monthly mortgage payments".

Anyone with half a brain should be able to see through statements like that.

These people are now focusing on growth on Canada. If you see anyone promoting this, or worse, if a friend or family member has already been sucked in, there is good information on the web about why this is a scam:

Google search:
http://www.google.com/search?source=...=Google+Search

Excellent thread in a US deals site:
http://www.fatwallet.com/forums/finance/741118

Another good discussion:
http://www.friendsinbusiness.com/boa...es/read/122068

An open challenge to UFF agents, as yet unanswered:
http://www.friendsinbusiness.com/boa...es/read/129143

I'll leave the mathematical proofs for later. Everywhere a scam warning has been issued, UFF agents or "people who know somebody using an MMA" arrive quickly, defending the product. We can get into the math then, but here's a common challenge they've yet to answer:

$5000 income per month (paid $2500 on the 15th, $2500 on the 30th).
$1500 per month bills, due on the 25th.
$200k mortgage, 6%, 30 years, $1199.10, due on the 1st of each month. 7.5% heloc
$5000 in the bank, 3% interest.

Show me the movements that payoff the mortgage and HELOC ASAP with MMA, I'll payoff the mortgage ASAP. If you are right, you'll pay it off first. If I am, I'll pay it off first.

I will attempt to answer you on this, because I am a United First Financial customer...They do it by advising the client to borrow $5,000.00 from a line of credit and then use it to pay down the mortgage by the same amount. The cost of borrowing from the line of credit in this case is small, due to the low amount being borrowed, the relatively short time the line of credit can be paid off (compared with a 30 year mortgage), and the flexibility of a line of credit type of loan when compared with a conventional mortgage. Using a conventional mortgage calculator, you will see that a one-time payment of $5,000.00 on this mortgage will result in 23 months and over $23,300.00 saved...that is quite a lot!

[AllWheelDrift]

I will attempt to answer you on this, because I am a United First Financial customer...They do it by advising the client to borrow $5,000.00 from a line of credit and then use it to pay down the mortgage by the same amount. The cost of borrowing from the line of credit in this case is small, due to the low amount being borrowed, the relatively short time the line of credit can be paid off (compared with a 30 year mortgage), and the flexibility of a line of credit type of loan when compared with a conventional mortgage. Using a conventional mortgage calculator, you will see that a one-time payment of $5,000.00 on this mortgage will result in 23 months and over $23,300.00 saved...that is quite a lot!

The $5000 from the LOC will almost certainly have a higher interest rate than the mortgage. If you can pay off the $5000 LOC in less than 30 years, you can just as easily make $5000 in prepayments (over the same time it would take to pay off your LOC) to the mortgage without borrowing to do so and then you'd truly be better off.

[sslinn]

How putting the $3500 cost of the software against the mortgage.

Don't get me wrong I like the concept, but the price of the software is ridiculious.

Further to that I think the software is flawed. When I went to a presentation the example wanted to pay down the 6% mortgage rather than the high interest credit card. When I asked why the reps just said it was the most efficient way to pay off debt. IMPOSSIBLE!

[KenMc]

The $5000 from the LOC will almost certainly have a higher interest rate than the mortgage. If you can pay off the $5000 LOC in less than 30 years, you can just as easily make $5000 in prepayments (over the same time it would take to pay off your LOC) to the mortgage without borrowing to do so and then you'd truly be better off.

Yes, the $5,000.00 from the LOC may have a higher interest rate but it most certainly will not have a higher interest cost!!! A cost-benefit analysis is really the best way to approach this. The benefit?...Well putting down a one-time $5,000.00 prepayment onto this sample mortgage will provide a net return of $23,437.28, according to the mortgage calculator on http://www.hsh.com/calc-amort.html. The cost?...Well a $5,000.00 LOC can easily be paid off in a year or two by most consumers who will use this same LOC into which to deposit their paychecks and out of which to pay their bills. Let's use an extreme example, however, and say that it will take this consumer 3 years to pay off this $5,000.00 LOC. Even if we use 10% as our LOC interest rate and use a non-declining-balance analysis, this will cost the consumer $1,500.00.

So let me get this straight...I can pay $1,500.00 in interest costs, to save over $23,000.00?!!!...Hmmmm. I guess I'm better off doing things the United First Financial way after all!

[sslinn]

You have been brain washed. I will show you the math with your example tomorrow when I am near a computer.

Your savings of over $23K is a projection. Look only at the current term.

[KenMc]

How putting the $3500 cost of the software against the mortgage.

Don't get me wrong I like the concept, but the price of the software is ridiculious.

Further to that I think the software is flawed. When I went to a presentation the example wanted to pay down the 6% mortgage rather than the high interest credit card. When I asked why the reps just said it was the most efficient way to pay off debt. IMPOSSIBLE!

1) A one-time $3,500.00 prepayment on this sample mortgage will cancel $16,753.76 of mortgage interest; whereas, the client will cancel over $158,000.00 of interest with United First Financial.

2)$3,500.00 for software does sound ridiculous; however, to invest $3,500.00 in order to cancel over $158,000.00 of interest sounds like a pretty good deal to me! Not only that, the $3,500.00 includes 16-hours/day free customer support, webinars, live chat, training videos, unlimited one-hour coaching sessions, toll-free telephone (and the support reps actually speak English!!!). Also, all software upgrades are included at no additional cost. Yes, $3,500.00 is a lot of money, but for me (I am a UFirst customer), it has been well worth it.

3) The reason the software prompted the client to pay off the 6 % mortgage before the credit card was due to interest COST, not interest RATE. Interest rate is irrelevant; interest cost is all that matters.

It is just math!

[KenMc]

You have been brain washed. I will show you the math with your example tomorrow when I am near a computer.

Your savings of over $23K is a projection. Look only at the current term.

It is not a projection, it is a fact...check it out for yourself. Do the math on any mortgage calculator like http://www.hsh.com/calc-amort.html