Single mum’s persistence helps MLC into $67m super refund

A SINGLE mum confused by a $20 monthly charge on her super wouldn’t take ‘go away’ for an answer. Her persistence saw MLC repay members $67 million. Here’s how she did it and why questioning your bills pays off.

I WANT to introduce you to Mia, who this week became a quiet hero to hundreds of thousands of Aussies around the country … without them even knowing it.

Mia is a single mother of two kids.

Recently she read my book and got to the part where I encourage readers to check their super fees by reading their statements and the fund’s PDS (Product Disclosure Statement). So that’s exactly what she did.

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When she checked her MLC (a division of NAB) Masterkey Personal super statement, she noticed she was being charged a $20 monthly “Plan Service Fee” … and had been since way back in 2012.

Read your super statement thoroughly.

She called MLC and was told the fee related to an accounting firm … she’d never heard of.

“I have very little in super, I’m a migrant and a single mum. I have never, ever seen an adviser or got any financial advice”, she told the MLC rep. A polite brush-off was all she received.

But Mia persisted.

(After all, 20 bucks may well be peanuts to the NAB, but it’s a lot to a single parent with a tiny balance.)

Yet, after multiple phone calls, MLC basically told Mia not to call again: there was nothing she could do.

But Mia persisted.

She spent hours reading through super legalese, and commented (in an email to me) that she found much of it eye-popping and painstaking: “I can’t tell you the number of times I dozed off trying to read and understand some parts of the PDS and that fine print. It took me weeks, but at the end it was worth it!”

That’s because MLC finally admitted the plan service fee was a mistake. And they not only offered to pay her back, but as a “goodwill gesture” offered her an additional $400.

But Mia persisted.

“I thought, are you kidding me … a goodwill gesture?”

So she lodged a complaint with the Superannuation Complaints Tribunal. After months of back and forth, guess what the result was?

Last week MLC was ordered to repay a whopping $67 million to 305,000 members for dodgy “plan service fees”!

There’s another word for “fees for no service” — it’s called theft.

Yet for some reason the law draws a distinction between being robbed with a pen and being robbed with a gun.

Still, Mia is a hero. She persisted, stared down an arrogant bank and won — not only for herself but for 304,999 other customers who all deserved better.

Tread Your Own Path!

IS THE ROOF CAVING IN?

NEIL WRITES: After reading your column on mortgage stress, I was curious what you think of American demographer Harry Dent’s predictions for Australian property. He seems like a pretty educated man and his predictions seem terrifying — our housing market could fall by more than 50 per cent by 2020, according to him.

BAREFOOT REPLIES: Harry Dent has, in his own words, “predicted nearly every major economic trend over the past 30 years”.

True.

Though that’s possibly because Dent predicts the future like my two-year-old plays ‘How many fingers is Daddy holding behind his back?’

You have zero control over what the housing market does.

Namely, by yelling out random numbers and giggling hysterically: “12!”, “4!”, “382!”

Or in Dent’s case, his financial finger game is about predicting by how much Aussie property prices will crash: “55 per cent!” (2009), “60 per cent!” (2011), “50 per cent!” (2014).

All these were wrong. Not only did prices not fall, since 2009 they’ve risen nationally by 69 per cent.

And now Dent’s saying prices will fall “50 per cent by 2020”.

Mind you, he’s had no more luck picking America’s benchmark Dow Jones share market index: “40,000!” (2004), “5600!” (2014), “3000!” (2018).

(The Dow is currently at 25,000.)

Dent’s economic theory is based on tracking how the life-stage spending of Baby Boomers affects the share market and property prices. And that’s one point we agree on: that our demographics eventually become our destiny. Yet, as Dent has also proven, that doesn’t mean it gives him a crystal ball that will pick future prices.

The bottom line is this: you have zero control over what the market does, but total control over what you do.

Plan accordingly.

SHOULD I BUY A PIZZA HUT FRANCHISE?

LINDA ASKS: My partner is considering buying a Pizza Hut franchise. He knows that most franchisees have had a hard time but he is going into business with a friend, and both have previous fast food management experience. Also, they will be working as managers, so will get a salary as well as profits.

He thinks they can make it work. He has had a hard time finding a job since he left his last job (he was not happy there), so he thinks this will be the best option at his age (40). Should he do it?

BAREFOOT REPLIES: Personally, I wouldn’t buy a food franchise for all the pizza in Prahran.

However, I’m biased by what I’ve seen over the years, namely, decent hardworking people getting financial food poisoning from the likes of Pie Face, Donut King and Michel’s Patisserie. Many of them invested their life savings into buying an 80-hour-a-week job, and were left broken and broke.

Better to buy a pizza than a franchise.

It could be different for Pizza Hut, though a quick Google search served up a 2015 class action that “alleges Pizza Hut parent company Yum Brands breached its duties to its franchisees by denying them the chance to make a profit”.

I don’t know how much profit there is in $6 takeaway pizzas, but I think it’d be hard to make a crust. Maybe suggest he calls up any of the dozens of Pizza Hut franchisees who are currently offering their business for sale, and ask them.

Is this a scam?

TRUDY ASKS: I recently received an unsolicited phone call from an investing group offering to invest my savings in their share trading scheme. A promise of 18-22 per cent sounds attractive, but I could not find them or their associated company on the ASIC website. Is this a scam?

BAREFOOT REPLIES: Yes it is.

 

THE WARRIOR

TEGAN WRITES: I just want to thank you from the bottom of my heart. I am a veteran who can’t work due to injuries and PTSD from service. I am also a single mum. When my ex left he took everything, including my super, leaving me with nothing but a mortgage behind on repayments and credit card debt — living only on a veteran pension. I fell into the cycle of taking high-interest small loans, and just fell further and further behind.

Three weeks ago I grabbed your book in a last-ditch effort to save my financial life — and it has! Up until then I was constantly $400 (at least) under what I needed to pay the bills. But I sat down to work out what to pay, and I had money left over — this has never happened before! I have now negotiated down the debt payments and insurance, and cancelled things I don’t need. Best of all, I am able to afford food, and have even saved $800 into my Mojo account. I have a long way to go, but it’s a start to a bright future for my daughter and me. Thank you for giving me back my life.

BAREFOOT REPLIES: Thank you for your sacrifice to our country, and for your story.

Look, plenty of people read my book … and do nothing. You’re using it to take control of a situation that was, until recently, totally out of control.

As you’ve no doubt learnt from the army, the enemy is indecision. Once you make a decision and start taking action, you’re already free. Then it’s a matter of time until you achieve your goal.

Yet the best thing? Your daughter’s watching you, and this is a life lesson that will stay with her.

You got this!

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice

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