Personal Finance

Warning! Manulife Bank ripping off Manulife One mortgage account customers

  • Last Updated:
  • May 18th, 2016 10:18 am
Deal Addict
Aug 24, 2002
3569 posts
19 upvotes
Sask
The people who should be really terrified would be anyone that got tricked into Manulife's "IncomePlus":

http://manulifeincomeplus.ca/

Now there's a product that makes some rosy long term promises - promises that are probably about as fake as the ones they made to sucker customers into their Manulife One Account.

Consider this...

If Manulife - by their own claims - is too financially crippled to honor their promised prime rate pricing on a few mortgages over the short term, how confident should anyone be that they can actually deliver on the lifetime promises they make with their GIF Select Income Plus?

Manulife has demonstrated total disdain for the mortgage customers and has callously breached their own mortgage promises. Does this sound like a company that would hesitate even a moment to rip off the annuity customers if they felt like it?

As I write this, their tricks team could be trying to hide evidence the same as they did on the mortgages. Manulife management is probably coming up with weasel wording to hide in contracts or coming with up with phoney baloney spin for them to use when the IncomePlus product blows up on them.

If you believe Manulife's earnings report (instead of the nonsense Manulife's management and fake ombudsman are spewing) it's clear Manulife can afford to charge prime rate, they are just opting not to and taking the difference as profit. To charge prime (as promised) would still provide over 100 bp of gross margin. The only real thing that seems to be driving Manulife is jacking up their profit.

Think about the credit squeeze that Manulife is attempting to use as justification for this betrayal. Most if not all experts say it's a short term issue. Then think about these IncomePlus annuities and their "lifetime guarantee" and how many years such a promise could conceivably have to cover.

Ask yourself - if Manulife is willing to rip off customers for such a small extra profit as the mortgage bait-and-switch scheme will get them, can they be trusted with the much larger and longer-term promises associated with those annuities?

Why am I thinking down the road customers will be looking back at claims like this one:

"5% bonus EVERY year there
Newbie
Oct 21, 2008
18 posts
aurora, on
One of the unbelieveable things about the manulife statement is that they quote their website as a source of authority regarding how their rates work. As has been documented in this thread, their website, on dates after October 10th, explicitly stated that the Manulife One Base Rate is the same as the Manulife One Prime Rate.... of course, this was quickly rectified once it was pointed out to Manulife in consumer complaint emails.

Also unbelievable that they say that the rate has 'moved in tandem, for an extended period'... Hmmm... lets see, maybe we should remember that the truth is that the rate has moved in tandem from the introduction of the product until their recent weasily moves to not honour their obligations to their customers.

Further, advertising pieces and their own information sources for their reps have explicitly tied the rate to prime, as has their own 'explanation of interest rate charges'.

That they have been forced to admit that enough customers are complaining to make it worth their while to post something on their log in page is something.

Unfortunately for manulife, I think they are doing too little too late to salvage their reputation. Now that they are forced to state that their rate is not based in anyway to the prime rate, it will be ALOT harder for them to sign up new customers; at least any that are engaged and read through the documention and question their advisors (who will no longer be able to reassure customers that base rate = prime rate).

No decent financial advisor or mortgage broker should recommend this product when the institution can change the rates at any time they want in order to protect their bottom line at the expense of the consumer. It is simply waaay to risky.

Manulife One = RISK for the consumer.

Caveat Emptor.
Newbie
Oct 21, 2008
18 posts
aurora, on
timcs wrote:
Nov 7th, 2008 8:14 pm
https://hermes.manulife.com/Canada/reps ... r_2007.pdf

This is a public document readily available from the Manulife one website without need of a password or any such, although I note it is primarily intended for Manulife advisors.

Here you can see that the body of the document refers only to prime rate, and it is left to the footnote to say that the manulife one mortgage is actually at the manulife one base rate, which is as of that moment at prime.

It is easy to see how reading this document leaves one just focused on the message of 'prime rate minus income' as being the feature of the Manulife One mortgage that matters... and it is messages like this that likely had our advisors telling us that the manulife one product is at prime.

The question posed in the last paragraph of the first page is a good one to bear in mind given the recent issues we have faced with the manulife one base rate; "If you can get a good rate (prime) and lower your principle as well (with your income), you've got a "prime minus your cash flow" mortgage that's tough to beat."

Now that manulife no longer offers such a product, they are in effect advising us M1 account holders to switch to one of the all-in-one products that does, such as Canadian Tires product or the National Bank of Canada. :!: Oh, the irony.
Interestingly, since posting this message, the document is no longer available on Manulife's website. surprise surprise...

Fortunately I saved a copy. If anyone wants one, please pm me and I can send it to your email as a pdf attachment :)
Newbie
Oct 23, 2008
26 posts
mork wrote:
Nov 17th, 2008 5:13 pm
Manulife has posted the following on the login page:


The "questions" they've been getting are really "complaints" and the "clarity" they have provided is the "gotchya" of they're bait and switch tactic.
I view the posting from Manulife as part damage control. If they state openly that the man one rate is not their prime rate, they are reducing their exposure in case any legal action is taken against them. In effect, it is their get out of jail card with only a hand slap. If a lawsuit did occur, their liability would be isolated up to the date they posted this message on their website.

Sounds to me they are starting to feel the heat and are positioning themselves for a possible legal fight.

RFD users should continue to let their voices be heard to anyone who will listen. Let your words do the talking while your accounts do the walking ;)
Newbie
Apr 8, 2007
21 posts
SE British Columbia
tareks wrote:
Nov 16th, 2008 12:25 pm
But as of right now, unless someone can point me into another direction, it seems like M1 has the most flexibility and freedom in terms of types and number of sub accounts which is very important to me.
Thanks.
I believe as you do your research, you will learn that Manulife One sub accounts are an accounting sleight-of-hand, as there are not really any secondary accounts -- it's just book-keeping as you might do with a ledger. The National Bank AIO truly appears to be separate accounts which can have separate cheque books, accesses, etc. It really is a very different option than M1.

Or, by using the web interface of the big banks, you can effect something similar, though you might have to manually move some funds around on occasion.
Sr. Member
Jan 1, 2007
734 posts
37 upvotes
timcs wrote:
Nov 11th, 2008 3:40 pm
Honestly, Manulife does not care about their customers at all, and have misled them with the Manulife One mortgage in a big way.

My advice to any existing M1 customers is leave now, and switch to the National Bank All in One product (or the similar ones from CT or Investors Group).

My advice to anyone considering any Manulife product.... DONT DO IT! They can't be trusted. To quote a favourite saying of a friend of mine, they "speak with a forked tongue".
I would never consider a Manulife One product, ever. Just stick to a regular mortgage, checking account and HELOC!
Deal Addict
User avatar
Apr 14, 2005
1584 posts
66 upvotes
I site I read frequently, consumerist.com, would probably publish an article on this fiasco. They essentially do "consumers getting screwed" type of coverage and are always looking for something to write about. They also have a large audience - mostly US of course, but it couldn't hurt to reveal Manulife on that site.

Someone should put together a little snippet for the Consumerist.com editors - not too much detail, but just a well written explanation of the concerns we Manulife One clients have. Maybe drawing parallels to how it is potentially much worse than the sub-prime mortgages seen across the US.. to me, that is the media angle.

If we got it there, we'd at least have a few more eyes on the issue and maybe some follow-up coverage by other sites.
[OP]
Deal Addict
Aug 24, 2002
3569 posts
19 upvotes
Sask
devilmeister wrote:
Nov 17th, 2008 8:55 pm
I view the posting from Manulife as part damage control. If they state openly that the man one rate is not their prime rate, they are reducing their exposure in case any legal action is taken against them. In effect, it is their get out of jail card with only a hand slap. If a lawsuit did occur, their liability would be isolated up to the date they posted this message on their website.
I'd say the opposite. By publishing statements that attempt to revise history and cover up the facts, Manulife is demonstrating knowledge of their own guilt. And by trying to hide the documents and web pages, Manulife may be adding aggravation to the matter.
Sr. Member
Apr 16, 2007
561 posts
26 upvotes
Toronto
Wow, I am just finding out about this thread now although it seems to be quite old.

I am in the consumer protection field, but I don't spend a lot of time working on issues surrounding mortgages and major financial institutions. I'm involved in regulation. So, I am having a hard time understanding this financial issue and what exactly Manulife is being accused of here on the Manulife One product. Could someone explain it simply?

Are they lying about their rate on Manulife One somehow?

I personally, have considered this product in the past and touted its valuability to people because it seemed like a good alternative to a traditional mortgage with a fairly low interest rate.
Newbie
Oct 23, 2008
26 posts
mark2000 wrote:
Nov 18th, 2008 11:41 am
Wow, I am just finding out about this thread now although it seems to be quite old.

I am in the consumer protection field, but I don't spend a lot of time working on issues surrounding mortgages and major financial institutions. I'm involved in regulation. So, I am having a hard time understanding this financial issue and what exactly Manulife is being accused of here on the Manulife One product. Could someone explain it simply?

Are they lying about their rate on Manulife One somehow?

I personally, have considered this product in the past and touted its valuability to people because it seemed like a good alternative to a traditional mortgage with a fairly low interest rate.
Hi Mark,
The discussion is about how Manulife one clients were sold HELOC and would be charge prime rate as the interest rate. In my package, I have multiple documents (marketing type documents) stating that I would borrow at prime.
As Manulife bank stated "due to extraordinary circumstances" they are no longer charging their clients prime and in effect are denying that it should be prime.

Check out my documents on page 6 of this thread and judge for yourself.
The other posters also have information found on this thread. It is long, but you should read to be a well informed poster!

BTW, know anyone in your area of expertise who can look into this for us. We'd appreciate the help ;)
Sr. Member
User avatar
Oct 9, 2001
772 posts
24 upvotes
Toronto
Hopefully articles in national newspapers like this will help everyone here in getting back to prime:

Source: http://www.reportonbusiness.com/servlet ... ents2/home

Think your borrowing costs are cast in stone?

ROB CARRICK

Globe and Mail Update

November 18, 2008 at 6:00 AM EST

When you deal with companies in the financial sector, you run the risk that their pain will turn out to be your pain.

This is what's happened recently to clients of Manulife Financial, Canada's biggest insurance company, and Envision Financial, a large credit union in British Columbia. Affected in various ways by the global financial crisis, both have made changes that resulted in higher borrowing costs for some clients.

In the past few years or so, virtually all financial institutions have bumped up the cost of mortgages and lines of credit. But Manulife and Envision differ in that it's not just new clients who will pay more. Existing clients who may have thought they had a particular arrangement in place are now paying more as well.

Before the financial crisis, you could get away with signing up for a mortgage or line of credit without asking about your lender's ability to change the rules determining your interest rate. Now, it's clear that you have to ask, or risk a surprise increase later on.

Manulife's changes affect a popular niche mortgage product called Manulife One. The current rate for this product is 4.5 per cent. If financial markets weren't in an uproar and if Manulife hadn't been affected, customers would quite likely be paying 4 per cent.

Earlier this month, Manulife announced that it had arranged a $3-billion loan from the big banks to help strengthen its financial position. Manulife is not in trouble or anything like that, but it has taken a hit from plunging global financial markets. In the third quarter of this year, profits dropped 50 per cent.

Manulife One is what's known as a flexible mortgage account, or all-in-one account. The concept: You combine your various bank accounts and your mortgage into one, thereby allowing your fluctuating deposit balance to count against your mortgage debt and thereby help cut your interest costs. The account also functions as a line of credit that lets you easily reborrow what you've paid down on your mortgage.

The core of Manulife One is a variable-rate mortgage, a type of loan where the standard practice is to link customers to the prime rate that financial institutions reserve for their best customers. Manulife does things a bit differently, though.

Company spokesman Tom Nunn explained in an e-mail that Manulife One is pegged to a
Sr. Member
Apr 16, 2007
561 posts
26 upvotes
Toronto
Is this an Ontario-only product or is it available nationally?

Complaints on provincially-regulated companies such as Credit Unions, Finance Companies, particular mortgage brokers or provincial trusts, would go to the consumer protection branch of the provincial government, the Ministry of Finance (re: Mortgage Brokers Act), or the Ministry of the Attorney General (the Mortgages Act).

For federal bank issues, I would say, talk to the Federal Office of Consumer Affairs.

Since Manulife is actually an insurance company, FSCO, the Financial Services Commission of Ontario could point you in the right direction.

It sounds like, in this case, if you are saying that Manulife is in breach of the stated contract, you're looking at a pure civil court matter, in which case Manulife customer who feel they have been jilted, should band together and approach a lawyer to talk about a civil suit.
Newbie
Nov 7, 2008
7 posts
Woodstock
We are being heard. With Manulife's message on the logon page and Carrick's article in the globe. Keep the information/complaints coming.

The end of the Globe article basically tells us what is happening. The article states that STANDARD practice is to LINK variable rate mortgages to Prime. Manulife LINKED to prime for many years. Manulife knows that it will be difficult to get a better rate and say that they still offer a competitive rate when compared to others. They know its not so easy to switch so why lower the rate! It is not about the cost of borrowing. It is that the competition has changed their stance when withdrawing the availability of new prime helocs and new discount variable rate mortgages. Manulife is taking advantage of the situation.

Jump ship... the cost of moving your mortgage will likely be covered by the new bank and the $100 closing fee may be saved in 1 months interest. Why should you pay an additional ~10% over what the mortgage was presented as. Hit them where it hurts... hit them in the pocket book!
Newbie
Oct 23, 2008
26 posts
brockster wrote:
Nov 18th, 2008 4:00 pm
Hopefully articles in national newspapers like this will help everyone here in getting back to prime:


Existing clients who may have thought they had a particular arrangement in place are now paying more as well.
Maybe Mr. Carrick should view the documents I posted on Page 6 and judge for himself.

Company spokesman Tom Nunn explained in an e-mail that Manulife One is pegged to a
Member
Jun 30, 2007
260 posts
Toronto
ck1234 wrote:
Nov 18th, 2008 6:14 pm
We are being heard. With Manulife's message on the logon page and Carrick's article in the globe. Keep the information/complaints coming.
What is Manulife's message on the logon page?
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