Paying for a budget

Jackie and her partner were told at a seminar that enableMe had a “patented formula” that would enable them to pay back their mortgage faster. They were to find out there was no approved patent and the calculations were by no means unique.

Save on interest costs

enableMe’s flier, which the couple read, says clients save on average $300,000 in interest costs by taking actions such as spending less on coffee and other frivolous expenditure.  The flier says: “enableMe educates people in the fundamental skills of personal finance plus the key strategies behind successful money and debt management.”

One of enableMe’s accountants told Jackie and her partner they could save $700,000 over the life of their mortgage if they followed the company’s advice. They agreed to go ahead and were given a budget – based on figures they’d supplied enableMe in a template.

Several pitfalls

The crunch came with the strategy suggested by the “mortgage optimisation formula”, which enableMe tried to organise with Westpac.  Jackie’s personal banker at Westpac, who knew her and her partner’s situation, spotted several pitfalls.

The banker noted the deal would not be in the couple’s interest because of enableMe’s charges and the break fees they’d incur. Moreover, advice from enableMe that they open new bank accounts, and reorganise their spending and bill-paying, was cumbersome and would incur increased bank charges.

Jackie and her partner put on the brakes, but enableMe sent them a bill anyway. 

Payment disputes

Jackie says their first reaction was to pay $500, which they understood covered the budget analysis and advice about reorganising their accounts – even though they felt they’d done most of the work themselves – but to dispute the remaining charge.

The New Zealand Federation of Family Budgeting Services believes they should not even have paid for those services. Chief executive Raewyn Fox expressed the view that: “Paying for a budget is almost criminal … it’s just plain wrong.”

enableMe, the company purporting to be a debtor’s best friend, hit the couple with penalty interest immediately they refused to pay, and then unsuccessfully took them to a Disputes Tribunal to get its money. That’s despite the fact that its flier says: “The Result? At least $100,000 saved on your mortgage or no charge.”

At the end of the tribunal hearing enableMe withdrew its claims for payment of its bill and the couple withdrew their counter-claim.