Personal Finance

Warning! Manulife Bank ripping off Manulife One mortgage account customers

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[OP]
Deal Addict
Aug 24, 2002
3569 posts
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Warning! Manulife Bank ripping off Manulife One mortgage account customers

This is warning to anyone considering using Manulife Bank for a mortgage.

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.
689 replies
Sr. Member
Apr 6, 2007
506 posts
58 upvotes
BoC dropped it's key lending rate 0.5%

All Canadian banks followed with drops of 0.15 to 0.25%

Manulife dropped theirs 0.25% - among the better. Follow along...
Member
Feb 19, 2008
415 posts
4 upvotes
bc
florch wrote:
Oct 11th, 2008 2:54 pm
BoC dropped it's key lending rate 0.5%

All Canadian banks followed with drops of 0.15 to 0.25%

Manulife dropped theirs 0.25% - among the better. Follow along...
Pretty sure most banks did .5% to .4%
Sr. Member
Dec 25, 2002
628 posts
197 upvotes
Hmmm. I've noticed that the Canadian Tire One and Only account seems to be doing the same thing (right now they have prime listed at 4.5 and the O&O account at 4.75. Right now we have our house up for sale so we will stay with them because of the open aspect. When we sell/buy new though if they are still above prime then we will be switching too.

The nice part about these products though is that they are open so if their rates start to get unreasonable you aren't stuck with them.

Kelly
Deal Guru
Dec 31, 2005
13270 posts
700 upvotes
squid wrote:
Oct 11th, 2008 6:00 pm
Pretty sure most banks did .5% to .4%
No many banks were .25 or less. One of the main statements about the 25 Billion was the hope that banks would move to meet the initial .5%
Deal Fanatic
Jul 1, 2007
7921 posts
766 upvotes
squid wrote:
Oct 11th, 2008 6:00 pm
Pretty sure most banks did .5% to .4%
Yup. In regards to the new "base rate", all the major banks have a new rate of P+1 on new HELOCs, however as far as I know they're honoring prime rate on existing HELOCs set to that rate. I think the only way that M1 can get away with what you're saying is if the agreement you sign with them states that your interest rate will be "base rate + 0" and at the time you signed it base rate was equal to prime.
[OP]
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Aug 24, 2002
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Thalo wrote:
Oct 11th, 2008 8:44 pm
Yup. In regards to the new "base rate", all the major banks have a new rate of P+1 on new HELOCs, however as far as I know they're honoring prime rate on existing HELOCs set to that rate. I think the only way that M1 can get away with what you're saying is if the agreement you sign with them states that your interest rate will be "base rate + 0" and at the time you signed it base rate was equal to prime.
I'll have to find the agreement and see what the fine print says. But fine print or not, the Manulife One rate has always been equal to prime.

For long periods of time that meant paying a more than the going rate. I was fine with doing so because I was confident I'd benefit later when rates drop.

Except Manulife is trying to play a trick. They liked charging prime when prime was higher than the competitive rate. But now that it's dropped a couple of times, they flip their stance.

A variable rate mortage where the lender creates their own artificial prime rate? Very shady in my opinion.

I'm going to be doing everything I can to make them accountable for what appears to be a bait and switch.

Anyone thinking about a Manulife One account - DON'T DO IT unless they are willing to cross out any fine print about using this special artificial prime rate of theirs!
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Sep 25, 2008
218 posts
Canada
Neil wrote:
Oct 12th, 2008 2:16 pm
I'll have to find the agreement and see what the fine print says. But fine print or not, the Manulife One rate has always been equal to prime.

For long periods of time that meant paying a more than the going rate. I was fine with doing so because I was confident I'd benefit later when rates drop.

Except Manulife is trying to play a trick. They liked charging prime when prime was higher than the competitive rate. But now that it's dropped a couple of times, they flip their stance.

A variable rate mortage where the lender creates their own artificial prime rate? Very shady in my opinion.

I'm going to be doing everything I can to make them accountable for what appears to be a bait and switch.

Anyone thinking about a Manulife One account - DON'T DO IT unless they are willing to cross out any fine print about using this special artificial prime rate of theirs!
Keep us up to date on this.
Deal Fanatic
Jul 1, 2007
7921 posts
766 upvotes
Neil wrote:
Oct 12th, 2008 2:16 pm
I'll have to find the agreement and see what the fine print says. But fine print or not, the Manulife One rate has always been equal to prime.

For long periods of time that meant paying a more than the going rate. I was fine with doing so because I was confident I'd benefit later when rates drop.

Except Manulife is trying to play a trick. They liked charging prime when prime was higher than the competitive rate. But now that it's dropped a couple of times, they flip their stance.

A variable rate mortage where the lender creates their own artificial prime rate? Very shady in my opinion.

I'm going to be doing everything I can to make them accountable for what appears to be a bait and switch.

Anyone thinking about a Manulife One account - DON'T DO IT unless they are willing to cross out any fine print about using this special artificial prime rate of theirs!
I'm definitely not defending Manulife, as they're a competitor of mine, but all the banks have encountered higher costs of borrowing in the last little while and thus the reluctance to cut rates along with the BoC. Manulife tries hard to get deposits through their high interest accounts and because they have to pay such a high rate of interest they need to keep rates higher.
Jr. Member
Aug 11, 2008
131 posts
ON
kellya wrote:
Oct 11th, 2008 8:19 pm
Hmmm. I've noticed that the Canadian Tire One and Only account seems to be doing the same thing (right now they have prime listed at 4.5 and the O&O account at 4.75. Right now we have our house up for sale so we will stay with them because of the open aspect. When we sell/buy new though if they are still above prime then we will be switching too.

The nice part about these products though is that they are open so if their rates start to get unreasonable you aren't stuck with them.

Kelly
I'm not sure about Manulife, but I was told that Can Tire doesn't change their One & Only account rate until the first day of the next month if prime changes.
Sr. Member
User avatar
May 27, 2007
560 posts
4 upvotes
And it's been what? 1 business day since the big banks gave in and dropped the full .5? Maybe 2? I dunno, it's the weekend, I'm not keeping track.

Give Manulife a day to get sorted. Geez. 'warning! scam! ripping off!' People use strong terms with abandon around here.

No, I don't use Manulife, but come on people.
Deal Fanatic
Jul 1, 2007
7921 posts
766 upvotes
BillyParadise wrote:
Oct 12th, 2008 8:31 pm
And it's been what? 1 business day since the big banks gave in and dropped the full .5? Maybe 2? I dunno, it's the weekend, I'm not keeping track.

Give Manulife a day to get sorted. Geez. 'warning! scam! ripping off!' People use strong terms with abandon around here.

No, I don't use Manulife, but come on people.
Haha, thank you for that. Same goes for anyone accusing the two banks who only dropped 15bp for ripping off their customers. It just happened.
Sr. Member
Dec 25, 2002
628 posts
197 upvotes
pdurple wrote:
Oct 12th, 2008 5:38 pm
I'm not sure about Manulife, but I was told that Can Tire doesn't change their One & Only account rate until the first day of the next month if prime changes.
Cool! Thanks for the info :)

Kelly
Deal Addict
Aug 7, 2003
2815 posts
13 upvotes
investors group has a All in One, exactly the same as the manulife without the monthly fee. Was at prime, but not sure if they have changed?....
Sr. Member
Feb 1, 2004
809 posts
226 upvotes
Markham
The .15 to .25% drop announced by everyone on Friday is not effective until Tuesday. Everyone has to wait a day.

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