Angry Clients Weigh In On Line Of Credit Interest Rate Hike

Since I wrote last week about TD Canada Trust’s recent decision to adjust the interest rate on their personal lines of credit, I have received emails from several more people affected by this decision. This is a pretty big deal, and I was lamenting that this issue had not been publicized more. But on February 5, Ellen Roseman picked up the story over at Moneyville. And on February 6, Rob Carrick ran with the story at the Globe and Mail.

Ellen spoke with TD spokeswoman Barbara Timmins who said the adjustments were intended to “ensure a risk-based approach that evaluates factors including a customer’s credit situation and their relationship with us.”

Of the TD clients with unsecured LOCs who are getting notices, 60 per cent will see their rate go up and 40 per cent will see their rate go down, she said.

Here’s are comments from some of my readers:

TD client #1: I too received this letter. My credit rating is impeccable according to my mortgage broker. I am not late with the payment. I have had an account with TD since I was 12.

I will soon be 50. My rate will increase to 8.25% TD prime 3.00% plus current variance plus Additional Variance 5.25% = New rate of 8.25%. I don’t know where they get 5.25% as I am currently been paying 5.75% since September 2011.

I have had to write to them before because they were going to charge me $35.00 because I had not used my line of credit for over 1 year. My policy is not to use credit if you do not need to. Needless to say this annoyed me and I wrote to them. They waived the fee and added a credit to my account.

I will be writing a letter and sending an email to Mr. Engel. Right now I just have an outstanding balance of $3,500.

I will not use this line of credit and am prepared to remove my accounts. I have another line of credit which is much lower and I will use this one.

TD client #2: I sent this to Mr. Engel today, probably on deaf ears. I hope he gets bombarded… I’ve placed this on my Facebook as well.

Hello Mr. Engel,
We received a well written letter from you advising that you no longer want our business. I am pleased that you will give us till April 2 to move the PLC limit to another financial institution. I guess those Sunday branches are causing you to squeeze as much out of every client as possible. I understand that making over a Billion in profit is simply not enough.Well you will not be making much of that any longer from us.

We are a young family, with our first born just under 5 months old, my wife is on mat leave till August… yet we still make our regular payments as required, with Beacon scores in the mid to high 700’s.

The great aspect of the internet is that people communicate with each other, I can promise you once this email is sent, my Facebook will be updated to advise all my contacts, and will invite them to ‘like’ my link so they can inform their other friends of your kindness.

Have a great day

TD client #3: I’m one of those people affected by this atrocious and greed fueled hike.

I have a great payment history AND a co-signer on this LOC. I spoke with a customer service rep and two local branch managers, who have obviously been schooled on talking out of both sides of their mouth. Not one of them could even tell me how much revenue was generated by the bank they work for in 2011 when asked. They handed me a complaint form and said “sorry, there’s nothing we can do.”

In addition to the LOC, I have a checking account with TD, a visa and car insurance policy. I am currently planning my EXIT strategy. My local credit union will be more than happy to watch my money.

TD client #4: From what I was told last night, they are doing this across the board to everyone with a variable interest line of credit – and no wonder; prime has been so low for so long that they aren’t making nearly as much money anymore. But the jump takes my rate, as an example, to 2% higher than the highest it’s ever been (2003) AND only a percent lower than my TD Emerald Visa card!

To add to your stats, I’m a student, with 15 years of TD services. I have my accounts, RRSP, TFSA, Visa, the works there. Having gone back to school, money is tight BUT in 15 years I have never missed a payment, and also have a high 700 credit rating. MY PLC balance is 15,000 right now (leftover from a previous degree). My interest rate is jumping to 10.75 percent – a 58% jump.

TD client #5: That’s unfortunate. What’s even more surprising is that someone thought this was a good idea BEFORE the RRSP season. Bad move on their part. By the way, this is happening to me and I worked for them for 4 years.

The last word: It’s a truism in business that you will hear from your unhappy clients far more than you will from your satisfied clients, and so far this is what I am seeing. But if in fact 40% of TD Canada Trust’s PLC clients received a rate reduction notice, where are they? I would love to hear from any of you.

Related Article

• Credit Cards Can be Cheaper Than a Line of Credit