Warning! Manulife Bank ripping off Manulife One mortgage account customers
They have a product called the "Manulife One Account" or "M1" that wraps all your debts in a line of credit secured against your home.
They charge a hefty monthly fee, and market the loan itself at prime rate pricing. For several years this meant paying a more than you would elsewhere for the sake of extra convenience.
When rates rose, they raised the rate on this account accordingly.
But now that rates are dropping, they're doing something sneaky. They've introduced the concept of a Manulife One "base rate" which they are keeping above prime.
I think it's highly questionable that they took the gains when rates were rising, but now fail to pass along the reductions as the rates drop.
Until they reconsider this shady practice, I urge everyone to avoid Manulife. Trust is definitely an open question with Manulife Bank.
UPDATE - NOV 12 2008:
Over the last month I've since tried reasoning with Manulife Bank but have encountered mostly misleading and deceptive responses. The most senior official I dealt with yelled and hung up on me when he realized I was taking notes of his claims during our discussion. Some Manulife officials have openly admitted the loans have always been sold and represented as prime rate, while others are denying this verifiable fact.
Manulife is requesting I send my case to someone they are calling an 'ombudsman'. However I found out that their claimed 'ombudsman' is actually a Manulife employee with a blatant conflict of interest as they are working under the direct compensation and control of Manulife.
It's noteworthy that on the same day Manulife officials were telling me they were losing money, their quarterly earnings report was released showing the opposite.
I would strongly re-iterate my earlier suggestion that customers avoid Manulife. Their initial action doing this was bad, and they have more than enough opportunity to correct the problem.
However their terrible response over the month that follows reinforces that they are not an organization that customers can trust.
UPDATE - DEC 10 2008:
Another month has elapsed and Manulife continues to rip off customers who were tricked by Manulife's bait-and-switch mortgage pricing.
Not only does Manulife continue to overcharge existing customers, they seem to be planning to pocket most of yesterday's Bank of Canada rate cut for themselves as well.
On Dec. 9, Bank of Canada cut the key lending rate another 0.75%, but Manulife has only dropped their rate 0.25% to 4.25%, a full 1.00% above the prime rate which they promised to tens of thousands of customers.
Once Manulife's accelerated compounding charges and high monthly fee are taken into account, the Manulife One account cost is running at approximately Prime + 1.2%.
Putting this into perspective, a family with a $250,000 mortgage is now paying an $2,500 extra this year in unfair interest charges, interest charges about which they were blatantly misled by Manulife. This amounts to Manulife ripping that family off by over $208 per month!
Since this ripoff commenced in Oct 2008, Manulife's conduct in responding to concerned customers and the media show they cannot be trusted. I urge everyone to avoid Manulife no matter what product, promise, or price they try to sell you.
UPDATE - MAR 4 2009:
The Manulife Bank One mortgage customer ripoff continues... and worsens.
While all the other major lenders in Canada passed along the governor's 0.5% rate reduction, Manulife has scammed half the rate cut for themselves. Innocent customers are being over-charged a further 0.25% beyond what their Manulife sales and service people told them they would be charged.
Note that the almost identical product from National Bank is at 2.5%. National Bank - like most ethical lenders - has moved their rate in accordance with their promise to customers and passed on the full 0.50% rate cut. Manulife has not.
When the economy improves and Manulife pretends to be competitive again, I hope consumers remember how dishonorable they were to their loyal customers.