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A Canadian couple living in the UK had RRSPs with a Canadian investment firm. While visiting Canada, they met their advisor to discuss their accounts. They were upset because the advisor had kept their money in cash for almost a year and were also upset because for two months the money had only earned 0.25% interest. The advisor explained that he was waiting for the right time to invest and that the money had not been invested in a higher interest account because of an administrative error. He discussed some potential stock picks.
When shopping for a credit card in 1993, the client was attracted to one of his bank's cards which included a reward program for first-time homeowners. The more spent with the card, the more he accumulated reward "dollars" which could be credited toward an undiscounted (i.e. posted rate) mortgage from the bank.
The clients, a retired couple in their early 70s, were approached by an advisor who had been referred to them by a friend. The advisor recommended that they take out a $90,000 home equity line of credit and use the money to invest in various equity mutual funds. The couple had $15,000 in retirement savings and had only fair investment knowledge. Their income came from government and company pensions. Since they did not have adequate income to cover monthly interest payments on the loan, the advisor set up a regular withdrawal to be taken from the investment account.
In early 2002 a client sold a rental property for $175,000. He asked his accountant if there was an investment product that would guarantee his capital and provide him with a regular income. His accountant suggested income trusts. Through an advisor referred to him by his financial institution, he invested in income trusts recommended by the advisor. However, the distribution from the trusts soon reduced to a trickle. Even though the capital was guaranteed, the client was not happy and looked for an alternative.
A couple took out a mortgage from a bank, agreeing that their payments would include property taxes that the bank would remit to the city. A month later, they received a notice from the city saying their taxes were due. After some finger-pointing about whether the bank's or clients' lawyer was to blame, the bank agreed to reprocess the paperwork to make sure the taxes would be paid automatically. Four months later, another notice arrived from the city: their taxes were overdue. Upset with the two missed payments, the couple told the bank they were considering moving the mortgage because of the possible impact on their reputation with the city and their credit ratings.
A client was solicited by a bank mortgage broker for a mortgage for his new house. They discussed the Home Buyer's Plan (HBP) option, a government sponsored program that allows consumers to withdraw up to $20,000 from their RRSP without penalty to buy or build a home.
The client and his now ex-wife had a joint unsecured line of credit with $8,800 owing when their marriage ended. Neither was willing to make any payments on the line. Before long, the bank's collection centre contacted the client. He told them to contact his ex-wife and said that he would not be making any payments.
A couple decided to sell their home in a major city and relocate to a smaller town. They made arrangements through their longtime banker to apply for mortgage financing for their new home. The mortgage application was completed and approved by the bank. Prior to the mortgage closing date, a bank representative met with the couple to finalize the application and insurance documentation. The couple then made arrangements for moving.
The client, a novice investor in her 60s, was looking to invest $75,000 of an inheritance she received. This money was a significant portion of her net worth. With the help of a long-time friend, she opened a margin account with the firm. Through her friend, the client completed the account opening documentation. She never met with the advisor. In fact, they only spoke twice by phone when the client wanted to withdraw money from her account.
The client was recruited by a company, via the Internet, to collect accounts receivable on their behalf. She would be sent cheques from Canadian companies to be deposited to her account. She would then wire 90 per cent of the amounts to designated third parties overseas, and keep 10 per cent as her collection fee.
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