Tonight ` You cheeky little rabbit. Beryl's been paying and paying and paying. Now, don't take this the wrong way, but you've just lived a bit too long. I have lived too... (LAUGHS) My name is Cassie. I'm Jono. G'day, I'm Greg. They're all trying to hit the sweet spot. What's changed? Anything? Could that be any smaller? And... We will achieve mortgage-free status just as fast, if not faster, living outside of Auckland. Copyright Able 2015 Welcome to Fair Go. A real money theme tonight. Is that credit card offer as cheap as it seems? Can we save another couple from frittering away their money? But first up, the insurance policy that keeps taking from you and giving to the insurance company. Here's Hannah. This is an insurance story. So why wouldn't we start it with Scooter the dog... You cheeky little rabbit. ...and Misty, the naughty cat... Look at the look on his face. ...before we get to 94-year-old Beryl White... Dead-heavy. Oh, there you are. ...and an insurance policy she took out when she was just 76. Tell me about what you remember about taking out this policy out. Very little. Very little. Back in 1997, Beryl bought BNZ's advanced care policy for her funeral expenses. It was with Farmers Mutual; it's now with Fidelity Life. For 18 years, she paid $25 a month into it ` almost $5500 ` but the pay out will only be $2188. And you didn't understand how it worked? I had no idea. No idea, until this came up, you see. What came up was this. Well, Mum said to me, you know, 'There's something funny here. She said, 'I've got this insurance policy and I've paid a lot more 'than what the amount is that's guaranteed upon my death.' The guaranteed sum - the payout - is that $2188. Anything paid on top of that goes to the insurer. They said Beryl could cancel, but she'd lose it all. We would end up with nothing, and I really felt quite pressured abut this. I was disgusted. Um, I was really upset. I think that if my grandmother had realised at the time she was going to be locked in to something for decades, something that was going to pay up $2100, she probably would have had second thoughts. The family only recently saw these policy documents. Here's the table which shows that, yes, paying $25 a week gets you a sum insured of $2188 and not a cent more. If you'd fully understood how it worked, would you have bought it? Oh, no, no. They never would've have got a cent. No. Who in their right mind would? You don't have to be a rocket scientist to look at this policy and say the payout's peanuts. It's $2000. So` So why do you even bother paying $25 a month for a $2000 payout when you've probably go that amount sitting in the bank anyway? If all insurance cover is a gamble, then this is a pretty poor bet. It's out of all proportion, and I think the reason is because the sum insured is so low. I had a look at look at my policy this morning. I'm a 52-year-old overweight lawyer. I pay $70 a month for $300,000 worth of cover, so you only have to do the maths to work out that $25 a month for $2000 cover is probably not the bargain of the century, is it? For the first two years, Beryl was only covered for accidental death, and in fact, she needed to die within seven years to make on the policy. Now, don't take this the wrong way, but you've just lived a bit too long. I have lived too long. (LAUGHS) I should have pegged out a long time ago. (LAUGHS) The family, of course, are very happy that Beryl's still around, but they say Fidelity should've contacted her once she'd reached the sum insured of around $2000. And if we'd had the opportunity of cancelling at that stage, we would have. Naughty cat. Shush, shush! Fidelity no longer sells the product Beryl bought, but funeral policies are very much on the market. Absolutely. They're advertising them on TV at the moment. These policies are very common, and the insurance companies make money by selling huge amounts of them. OK? The premium's relatively cheap, the sum insured is relatively low, and they sell massive volumes, and that's how they make their money. Beryl doesn't remember what financial advice she got from the BNZ when she bought this policy off them. What I advise people to do is to talk to a properly qualified financial adviser. And if you want $2000 set aside for your loved ones, there may be other options that are much more financially viable. The family wants to alert others to the pitfalls of this sort of insurance. They'd like to be able to cancel the policy and get all Beryl's money back. Yeah, I think they should show a bit of humanity and bite the bullet and give it back. Fidelity Life say the terms of the policy were clearly set out in the Beryl's paperwork. They disagree the benefits are minimal. They say wanting a refund if your premiums exceed your sum insured is the same as getting back your car insurance premiums if you don't have an accident. Fidelity say there are about 1800 of these policies still in force. They've offered Beryl and her family a confidential settlement. The family is considering it. And the BNZ says the policy was sold by direct mail to its customers, and they provided an 0800 help number and a 30-day cooling off period. The BNZ points out that under this policy, if you died after paying just two years' premium ` $600 ` the payout would be a couple of thousand dollars. Now coming up, we're going undercover to check whether an industry is following up on its promises to Fair Go. And can you tell when something's too sweet and you are overindulging? My name is Cassie. I'm Jono. G'day, I'm Greg. Can they better the banks at their own game? The sweeteners that come with credit cards these days are pretty sweet. Promises, promises. So what we found at the garden centres and DIY stores that we visited was mostly pretty disappointing. And modest income, big challenge for Hannah McQueen. There are always savings. There are always things that you're spending money on that doesn't really make you any happier. There are always things that you're spending money on that doesn't really make you any happier. Welcome back. It's no secret that we love to use credit cards, and we can say that because Kiwis owe an astronomical amount in debt. And if you hadn't noticed, the banks are brawling for new customers at the moment. Yes. Zero percent interest; balance transfers; reward schemes. It is a great time to take advantage of these offers. Or is it? Brodie has some advice so you don't get caught up in money madness. DING! Got one of these bad boys? Well, chances are you do, cos we Kiwis love to spend on them. And the sweeteners that come with credit cards these days are pretty sweet. OLD-TIME MUSIC We're at the BNZ museum in Wellington, and haven't things changed since these were our go-to banking items? Today, it's all about the plastic. We do seem to like our credit cards. Actually, NZ, I think, is one of the most cashless societies in the world. Why wouldn't we be when the banks are sugar-coating their offers? And consumers are snapping up the deals. My name is Cassie, and I switched from ANZ to ASB because they were offering a 6-month interest-free credit card. I'm Jono, and I switched from ASB to Westpac cos they were offering airpoints on a credit card and I wanted a reward I could actually use. G'day, I'm Greg. I swapped from BNZ to KiwiBank because they had zero interest. Meet our three relatively savvy bankers, who all have made the most of credit card sweeteners. Cassie was lured in by an ASB credit card offering six months interest free on purchases. I was going overseas and I needed a credit card. So instead of going with the bank that I was already with, I decided to go with ASB because they were offering this interest-free rate. Greg wanted to consolidate some debt with a balance transfer. I picked Kiwibank cos they looked the best, in my opinion. And, um, when I went in and swapped all my bits over, they offered me a six-month interest-free for my credit card, and I thought, 'Hell yeah. I'll take that please.' And Jono wanted some bang for his buck. I went in to get the credit card sorted, they did the old sales pitch and 'We'll give you this, we'll give you that, we'll give you this.' And all of sudden, it's like, 'Well, that's actually quite a good deal.' Now, to be clear, this isn't an ad for the banks. This is me wanting to tell you what to look out for when shopping around for a credit card. And here to help me help you is the banking ombudsmen. Look, there's a responsibility on everybody to understand what it is that they're either offering or getting into. I do think that a lot of the problems are caused by the fact that consumers don't necessarily understand what they are signing up for. We're gonna start with balance transfers because most of the major banks are offering them. It's when a bank transfers your existing credit card debt over to a new credit card with them, and then, that new bank will likely give you 6 to 12 months with little to no interest on that debt. But there are a couple of things you need to know about balance transfers so you don't get caught out. The first being how the repayments work. What happens is that if you make repayments, it goes back to the low interest first, and so if you make subsequent purchases and you haven't paid off everything that you already owe, then that will attract the really high rates of interest; the 19 to 22%. You can, if you're not careful, end up worse off. The other thing that it's important to know is that just because the balance transfer is at zero percent doesn't mean it's your credit card interest rate. I think people just get caught out not knowing that really they can't spend any more. Not spend anymore? Yes, that's right ` unless you want to be stung by higher interest rates. And hey, one more thing about balance transfers ` don't forget to actually pay the balance off. Otherwise you're whacked with massive interest cos you haven't actually paid the thing off. Got that? Well, just to reiterate, the first thing you will repay is the transferred balance so any new purchases will accrue interest. So sorry, no spending until you've paid off that balance. Now onto paying off that big big mountain of debt we've got. So we Kiwis owe more than $6B on personal credit cards. Did you know what that could buy you? Well, we could get the LA Lakers team; we could buy the Solomon Islands; a return trip to the moon; and a couple of Airbus A380s and we would still have change. So to ensure we at least try and get that down, don't get caught in the trap of only paying the minimum payment amount on your credit card statement. There are catches. You've gotta be really careful, because people also need to understand that the minimum repayments won't get you there. You've gotta make more. As of this month, banks will have to warn you that paying only the minimum amount now will cost you more later, so that's good. Back to our savvy bankers with some lessons they've learnt. If you don't know what the lay of the land is and read all the little fine print, then you could easily get in a lot of trouble. If you can manage credit cards, you're OK, but if you can't, stick away from them. Don't borrow money you don't have. And how about bank all that advice next time you go to swipe? Good advice there, Brodie. Yeah. Yeah. Beware of banks bearing gifts. Yeah, exactly. Now, it's the first official week of winter; odd time, perhaps, to talk about gardening, unless you're planting garlic. Is that right? It's also been a year, more or less, though, since our story about a man who was nearly killed by his compost. Yes, compost ` it really can be lethal. The gardening industry promised that they would do a better job of warning gardeners of the risks. Now, we remember that sort of promise. We check. Here's Hannah again. Garden centres and DIY barns ` not the sort of places we normally do hidden camera filming. But we want to see if our awareness campaign's reaching those who make and sell compost. Here's why we've been hammering on this for five years. Oh, it's a terrible thing. Legionella longbeachia - a common enough bacteria which thrives in the moist warmth of compost and potting mix. When we open the bag, it can become airborne and get in the lungs. It got in the lungs of Paul Savage. I thought, 'Gee, I don't know whether this is the last time on Earth or not.' (CHUCKLES) That's how close it was. Paul spent weeks in intensive care. Thing is, no-one needs to get sick or die from compost. This is not just a minor illness; this can be very serious. Sometimes it can kill people, but it is imminently avoidable. Avoidable with a few basic precautions. Gloves, facemask. Avoidable too, if gardeners know what precautions they should take before they open the bag. Looking for the warning, nothing along the top and there's nothing at the back either, which is important cos that's where you'd open the bag. And then on the back, here's the warning ` not very prominent, right down the bottom of the bag. This is more like it - nice bold warning, top of the bag. Life saving stuff. Last year, we asked for more prominent warnings, including 'wear a mask'. I'd be very happy to advocate for the standard to be changed and certainly to ask the manufacturers to consider that in terms of their labelling on their bags. That was last autumn. What's changed? We visited a dozen retailers - North and South Island. Mixed results. The health warning's down here. Warnings were often hard to find. Nothing really on the front of anything. Could that be any smaller? We'd argued for warnings right at the top where the bag would be opened. Sometimes they were at the top, but were hard to read. Here, a warning about dangers to animals in larger print than the warning about human health. Wash hands. But on many of the bags we saw, nothing about those life-saving masks. Gloves, eye protection. Actually, nothing about masks at all. As for selling masks, either with or linked to the compost, that wasn't happening. Can't see 'em anywhere. So what we found at the garden centres and DIY stores that we visited was mostly pretty disappointing. But there were a couple of exceptions. Some spot-on bag labelling, and several places had masks with the compost and with warning signs - bravo. So it's been a year since we last spoke. We'd gone back to John Liddle to ask - what's new? We've been working on signage and publicity which we utilise through retails. This is what John means. We saw these in several Mitre 10 outlets. 1000 were sent to retailers; that'll be repeated in spring. That's good. And new labelling is being designed with warnings top and bottom of the bags. Whether somebody's opening it at the top or the bottom, there is a warning in close proximity to where they are opening the bag. < One of the things that we were really hot on was that the word 'mask' often was just never used. < Has that changed? The word mask is part of the new recommendation. < So, but again, not compulsory. Not compulsory. We're in no position to tell people what to do. It's entirely up to them. < But you are in a position to tell people what to do. Oh, so` Well, so we can tell people what they should do or what we might recommend; we're not in a position to force them to do something. Recommended then that bags say 'wear a mask' ` in fact, a particulate respirator. So we're getting there. How soon? I believe that the first of it may well be available in spring this year. So the first of the old bag stock will need to be sold before we'll see any of the new labelling. But - The manufacturers we've been working with have been very positive about the opportunity to do this better. John says they've also encouraged retailers to be more compost savvy. Making sure customers are aware of the risks. But again, things like selling masks with compost or warning customers at checkout ` all voluntary. Yeah. Look, again, I say it's completely up to the stores. I mean, we can led a horse to water; you cannot force it to drink. So progress is slow, then. It's not gonna happen overnight; it's not even gonna happen the next day. Spring at the earliest. In the meantime, it's probably up to us ` the consumers, the gardeners ` to spread the word about the dangers of compost. This compost campaign of ours is all about saving lives and preventing serious illness. It may well take your help to keep this campaign on track. Talk to your friends and family, to your garden centre, and as Hannah says, spread the word. We've got more info on who's most at risk from Legionnaires, and a simple safety demonstration, on our website and Facebook. Now, for our financial challenge, you wanted us to find a family earning around the average wage. So here we go ` modest incomes, but a big challenge for our financial saviour Hannah McQueen. There are always savings. There are always things that you're spending money on that doesn't really make you any happier. Can this couple on a modest income be happy and mortgage-free sooner rather than later? We will achieve mortgage-free status just as fast, if not faster, living outside of Auckland. You don't need to earn the big money, cos when you earn the big money, you just spend more than what you need to anyway. cos when you earn the big money, you just spend more than what you need to anyway. Welcome back. We had amazing feedback about the Mason family's fight against fritter, helped by financial personal trainer Hannah McQueen. Yes, The Masons are now well on track to ` get this ` pay off their 30-year $400,000 mortgage in less than six years. Six years! Now, many of you felt the Masons earned too much to be considered an average family. You wanted to see how Hannah McQueen would work with someone earning closer to the average wage. So Mark hit the road. REFLECTIVE MUSIC So in our quest to find the average NZer with the average wage, hilltops were crossed that were lashed with snow so deep that our cameraman Ross had to dig the truck out. But we made it. We've come here to Otago ` the heartland ` and it's a bit chilly. And this is our couple ` Rachel Sloan and Richie Olsen. I wouldn't think we live an exuberant lifestyle. I mean, we're on an average wage, average income, average cars, average house. Rachel's an occupational therapist. She makes $65,000 a year. Richie's a teacher - 53 grand per annum. We make all our bill payments, and, you know, payments for various things, but just probably feel like we're struggling to get ahead financially. Cover your ears, Aucklanders, but Rachel and Richie's warm and toasty two-bedroomed house in rural Waikouaiti cost $186,000. They scraped together a deposit, but the mortgage is still $150 grand. Obviously, it's a bit daunting looking at that, sort of` the mortgage long-term being upwards of 30 years. Add to that over $50,000 in student loans and you can start to understand why they want to do some financial personal training. Enter Hannah McQueen. If the goal is to get you mortgage free, we will achieve mortgage-free status just as fast, if not faster, living outside Auckland. You don't need to earn the big money because when you earn big money, you just spend more than what you need to anyway. The kitchen needs a bit of a do-up, but Rachel and Richie aren't big spenders. They get Sky TV because they love their sport, but hardly ever have a night on the tiles. Yeah. Not big drinkers. Yeah. I guess in saying that, there's the odd leer up here and there, um, but it's pretty few and far between. They make their own lunches, and groceries are around $150 a week. That includes cat food, dog food. We've got a large dog so he eats a lot, but often, I leave, like, 20 or 30 bucks extra so we can get more fruit and veges the following week. Normally, I come out on a Saturday when this one's playing golf so, you know, things don't get put in the trolley that aren't required. Banned for unnecessary items I think it was, wasn't it? In fact, all in all, Rachel keeps a pretty tight rein on the purse strings. Sometimes, getting this one to sit down with me and sort all that out is like pulling teeth sometimes. Yeah. In saying that, though, there's accounts set up for absolutely everything. I'm sure there's a better way that we could go about doing that. There are always savings; there are always things that you're spending money on that doesn't really make you any happier. Any extra mostly goes on sport - running, biking, kayaking and golf for Richie on the weekends. He's pretty good ` got third at the national speed golf champs in sunny Rotorua. We give ourselves $150 a fortnight, and it's not really a lot, but that seems to be enough. And I find that, really irrespective of your income levels, there's still an amount of fritter - money that disappears. Rachel and Ross recently splurged on a trip to Melbourne. It was a great trip. Basically, yeah, bought a ring beforehand, so made it expensive at the same time, but, uh,all well worth it, I hope. (LAUGHS) Yes, that's right - Richie popped the question in Melbourne. So I'm assuming you said yes? Yes, I did. Yep. Took me a while, because I was so surprised that he could actually organise something like that without me finding out. (LAUGHS) A wedding is set for February. That'll be another 20 grand. Yeah, I always wanted to do the wedding on the cheap, but after we've started to add up a few costs of different things, it seems to be getting, um, a little bit up there. Money's tight and it can get even tighter. Car bills have popped up from time to time, which have been a wee bit worrying, and then we've had the odd vet bill as well. Having the payment for that can be a wee bit tricky at times. So modest incomes. No outward signs of extravagance or overspending or frittering. I think Hannah might have her work cut out for her here. In their situation, their fritter is less than some people, but relative to their mortgage, it's still significant enough to create some compelling results. How compelling? We'll tell you next week. You will be surprised. Uh, and Richie's up for a challenge ` he was the national 1500 metres champion in 2007. Oh, very cool. And that is the show, but we will be on Facebook for the next half hour to answer your questions. Our programme, of course, is all about your thoughts, your problems, so do get in touch. We really do want to hear from you. We're on Facebook. Email us at fair go at tvnz.co.nz Write to us - Private Bag 92038 Auckland 1142 Yes. And next week ` Bonus Bonds ` And you haven't seen them since? What's the date on them? 1979. We take a look at our love affair with them. So Mum or Dad might have bought them for you? Yeah, or maybe my grandfather, or, you know? So 31 years ago. Goodnight.