Tonight ` The bombshell. Broken promises... I felt sick. ...and the tape. This contains a recording we think is pretty astonishing. Yeah, *555? Motorists dobbing motorists in. I need to report a bad driver in a red car. And ` a lot of Kiwis incorrectly assume that if you have a second property, it is an investment. can our couple really pay off their home in five years? That's crazy. That's amazing. Copyright Able 2015 Welcome to Fair Go. If an insurance company stuffs up, surely it should suffer, not the customer. Our first story is about an insurer stuffing up, and it includes this ` a remarkable recording, a conversation between two quite senior people at Vero insurance. They agree Vero had stuffed up. But Vero didn't suffer; the customer did. When an insurer says they're gonna stand up, you generally expect they're gonna stand up. Pete Downing says Vero insurance did not stand up after saying it would, and his family suffered. It has been a hard year. It was. It was actually really awful. Living through months of stuff like this... CLATTERING, BANGING It was earthquake repairs on this place in Woodend, North Canterbury. They bought it knowing Vero was covering the costs. So, quite a big job. The Downings had to move into a motel paid by Vero for six to seven weeks. 'Paid by Vero' ` Vero promised that again and again. Pete says this recording from Vero is one of many promises to pay. And it's in writing. October 2013, Vero notes say the Downings... May 2014, Vero tells the Downings this ` June 2014, Vero emails the motel where the Downings planned to stay. The same day, Vero tells the Downings,... A couple of days later, Vero emails the Downings ` So at least six times Vero promised to pay for that accommodation. Then just weeks before the building began, the bombshell. Vero got it wrong. Vero would not pay. < hat went through your mind when you saw that email? Oh, I felt sick. Initially, I felt sick. Oh, I think I might have dry retched a couple of times. I just felt physically sick, and I thought, 'What are we gonna do?' I just felt physically sick, and I thought, 'What are we gonna do?' From sickness, it turned to anger. This is Pete's call to Vero after that bad news email. Vero gave Pete this recording after a Privacy Act request. You can't just go out and find somewhere to live for six weeks and four weeks. It's not that simple, not in Christchurch. And the repairs went a bit over time. It was a six-week repair that ended up taking seven months. BANGING, CLATTERING The Downings never moved into that motel. They stayed in the house, moving from room to room. We weren't supposed to be in the house. We weren't supposed to be in the house. No. > < It says clearly on the Fletcher's document you gotta get out. Yep, but you've gotta stay somewhere. (GROWLS) Look at what it did to poor old Al the cat. He ended up on cat antidepressants. The vet said, 'This is` This is stress.' So why won't Vero pay? Well, they should never have told the Downings they would. Turns out the Downings just didn't have cover for accommodation and storage. It was what's called an Assigned Claim, which Vero had known for years. It began with the previous owners, and was assigned ` transferred ` to the Downings, but no right to accommodation transferred with it, despite all those Vero promises. And get this ` Vero say the Downings spent no money on accommodation and storage, so they suffered no financial loss. Try telling the Downings they didn't suffer. Oh, it was exceptionally stressful. Oh, it was exceptionally stressful. < What did it cost you? Oh, it was exceptionally stressful. < What did it cost you? Very near my sanity, actually. We were in the middle of winter, and you couldn't heat the house. We had no privacy for six months either. You couldn't get up in the morning and get in the shower because it wasn't uncommon to open the bathroom door in a towel and have a tiler there with a smile on his` maybe not a smile on his face. Now, even the Downings can see Vero has a point about there being no accommodation cover. You gotta accept that narrowly they are correct, aren't they? They are right, but it was Vero that told us we were covered. It was Vero that assured us we were covered. It was Vero that kept reminding us we were covered. < And then they didn't cover you. < And then they didn't cover you. And then they didn't cover. They pulled it at the last minute. And the Downings want compensation. The Downings think Vero should pay. We think Vero should pay, and this shows Vero's own people thought they should pay. This contains a recording we think is pretty astonishing. (COMPUTER) MAN: We had a claim. It's blown up. It's heading for legal. It was among recordings Vero gave to Pete after his Privacy Act requests. A chap called Peter Downing. It's an internal discussion between two fairly senior Vero people days after Vero gave Pete the bad news. You've had the bombshell? You've had the bombshell? This is the 18th of June, so it's two days later. And this is an internal conversation? Yes. Yes. You aren't part of this? Yes. You aren't part of this? No. An ex-gratia payment is a goodwill payment made when a company doesn't accept legal liability but wants to settle. When you heard this, what did you feel? I was a bit stunned. I was a bit stunned. Listen again. Remember, it's an internal recording given to Pete by Vero. I was amazed when I heard that. Do you remember what you felt when you heard that? Yep, angry. Angry? Angry? They knew they should pay. They knew. But they didn't pay, and then they sent this. Basically, it says to the Downings, 'Sorry. We stuffed up, but your suffering is your fault.' Vero admits they were wrong, and they're very sorry for the error, but they won't pay, and it's the Downings' fault because they didn't put enough money aside for the accommodation and storage. Instead, they spent their money on fixing the house. They didn't have enough money saved for the accommodation. Weren't we stupid? This feels really personal. It does feel personal. It does feel personal. Yep. It does feel personal. Yep. < It does. So, let's just recap. Vero repeatedly promised to pay for the accommodation. They didn't when they realised the claim was assigned, which they'd known for years. Vero's own people thought they should settle, but they didn't. Then Vero blamed the Downings for not putting aside money they didn't put aside because of Vero's repeated promises ` Vero's broken promises. I think they're unethical, and they're not an insurance company I would ever use. It just feels like the insurance companies can do what they want when they want, and that's actually OK. You can't do anything about it. Vero had sent us a statement, but yesterday there was a breakthrough. Here's the man in charge of Vero's response to the quakes. I've looked at the interaction and communications we've had with Mr Downing, and I have to say it's both regrettable and disappointing that we have treated him this way. We certainly do not set out to do that. Um, when we make our promises on our commitments, we want to honour those promises and commitments. In this particular instance, we have dropped the ball, and I have personally apologised to Mr Downing for the confusion that we have caused him and his family. Vero is about protecting customers' assets and restoring their lives when it matters. We want to make things simple, not complex, and, again, I'm apologising to Mr Downing for the treatment we have given him. We've been working on the earthquakes for the last four years, and our claims team is working very hard and in some very difficult circumstances to get things resolved for customers, and certainly that is our intention to finish up this year. What about the money? Vero insist that if the Downings had paid for a motel, there'd be no argument ` Vero would have refunded. But last night they and Pete agreed a settlement. Good news. We know lots of you in Canterbury are still battling with insurers. Pete Downing feels his main achievement was getting that information out of Vero using the Privacy Act, and he wants you to know that you can do the same thing. We've put some information on our website, including a sample Privacy Act letter. Look for our links and info page. Now our true or false challenge ` burning consumer questions and law changes which affect you. Last week we took a crack at Fair Go's first true or false consumer quiz, stopping people in the street, at random, to ask them six questions. If they got five right, they'd win 10 bucks. We're rolling out the questions one by one, week by week, and at the end, we'll let you know who, if anyone, picked up the cash. This week's question? Most people's cars will be cheaper to register this year. True. I say false. True? False, probably. Uh, false. I would say false. Bit of a mixed bag. Not surprising ` I mean, how often do prices go down these days? What do you guys think? True? Or false? We'll tell you later in the show. People found that one very tricky. Now, a cop sees you commit an offence, pulls you up and gives you a ticket. Hate it. Gotta live with it. But what if another road user thinks you've committed an offence and dobs you in? Who knew a cop could issue an infringement based on one person's opinion? Can the police really ticket you on the word of another motorist? Did you know you could get a ticket for doing that? Did you know you could get a ticket for doing that? I did not know. And later ` can our couple do better than this? If we were to stop work, we would survive for a month. Welcome back to Fair Go. None of us exactly like getting a ticket, do we? It's been a long time, I'm glad to say. But a fair cop is a fair cop. But is it a fair cop if another motorist dobs you in, and the first thing you know anything about it is the long arm of the law is knocking on your door? Here's Brodie. HIP-HOP MUSIC *555? I need to report a bad driver in a red car. Would you say you were a good driver? Would you say you were a good driver? Absolutely. Safe and good driver. So, I bet we all think that, right? But what if someone disagreed with you? For Schaa Rabbani, that was most certainly the case. Me, my wife and my 7-year-old son, we were driving from Auckland to Hawera, where my sister lives. Yep, Schaa, Shazleen and Daniyal left their West Auckland house, hopped into the car and drove the five- to six-hour drive to the south Taranaki town of Hawera. Being a truck driver by trade, Schaa knows all too well the importance of taking rest breaks. I stopped at Ngaruawahia for half an hour and then stopped at Piopio for about half an hour. They arrived at Schaa's sister's in the arvo. Then some unexpected guests arrived soon after. I saw these two cops coming into the carport, and they asked me, like, 'Who was the driver of this Toyota Corolla?' I said, 'I was.' Shazleen thought it was a goodwill visit. I see the officers there, and I thought probably they're here to say Merry Christmas to us. You heard right. This was on Christmas Day. The constable said, 'We have received a complaint from another road user 'saying that you were not driving within the lanes.' The complainant said that between Eltham and Normanby, they saw Schaa cross the centre line around six times. They then called the police, then followed the car into Hawera and saw it happen one more time in the township. Schaa was dumbfounded. I said to him, 'This is not right. I was driving perfectly within my lane, and this is not right,' and he said, 'Why would the other road user call us and complain about you?' But despite giving his word... He didn't listen to me. My wife got upset, my sister got upset, my brother-in-law got upset, and he gave me $150 notice. Yep, 150 bucks for 'failing to remain entirely within lanes.' Who knew a cop could issue an infringement based on one person's opinion and on something they haven't seen themselves? It's not common knowledge, but unfortunately, it's an unnecessary side effect ` the fact that people can report crimes or infringement matters, and the police have a duty to follow it up. And we understand that. Over the past few months, the heat has been on people who've been driving dangerously. No one wants to be on the road with someone like this. But a $150 infringement notice based on one person's complaint? A warning would be perfectly adequate. The police have a duty to investigate; not to just issue an infringement offence on the basis of one person's complaint. Surely after speaking to the driver and his wife, they determined there wasn't enough evidence to bring an infringement offence. Someone's made a very poor decision, in my view. Poor decision or not, Schaa is going to repeat that very journey down to Hawera next month, where he has to fight the decision in court. The fine is $150. It's going to cost you more to get there and fight it. Why don't you just pay it? Why would I pay for the thing that, you know, I have not done. And being in the car at the time, Shazleen fully backs her hubby. I'm happy he's fighting it because it's not about the money; it's about something that you've been accused of basically that you haven't even done. So, what did the cops have to say? Well, because the matter is before the courts, they wouldn't front on camera but did send us a statement. It says... But traffic lawyer Steve Cullen thinks it's just helping clog up the already jammed court system. Total waste of resources. They should issue somebody in that circumstance with a warning, because even if it did happen, it's perhaps best dealt with in that way. Well, what do you think? Give him a ticket, or give him a warning? Schaa is in court next month. We'll keep you posted on the result. The true or false answer to our quiz question coming up. And can you learn something from the tough choices our couple on their new financial plan have to make? Everyone fritters money. Remember the Masons? It appears that there is about $50,000 a year that is going walkabout. Whoa. Can they turn that around? < Can you do it? Welcome back. Have you got the answer to our true or false challenge? True. False. 'We're back, hitting the streets of Central Auckland in search of answers.' This year, most people's cars will be cheaper to register? True or false? True. And she's right. Most people's cars will be significantly cheaper to register this year. From July the 1st, the average rego's coming down by a whooping 41%. That means you could save up to $132 for petrol-powered cars and up to $172 for diesel. If your registration is due to expire before July the 1st, you can choose the exact amount of time you want to register it for. They'll even accept one day. So make sure you save the most amount of money you can. Next time, we take on contracts. So, that is great news. So, that is great news. It's a lot of money. So, that is great news. It's a lot of money. It is a lot of money. And one day? I didn't know that. I can get registered for one day. A couple of weeks ago, we met the Masons. Good income; bad money skills ` going nowhere fast. Well, tonight they start making the tough decisions that they hope will turn their lives around. Here's Mark. The last time we saw the Masons, they'd had a bit of a shock from financial personal trainer Hannah McQueen. It appears that there is about $50,000 a year that is going walkabout. Yes, that's right. $50,000 frittered despite working hard at his two IT jobs ` one at Les Mills, where even the breaks require effort ` he makes six figures, but the family still struggles to keep the wolves from the door. If we were to stop work, we would survive for a month. And before you get too judge-y, it could be you. Everyone fritters money, and it works out to be around 15% to 20% of what you earn is getting frittered. The Masons are now at a point where they're only paying interest on $630,000 worth of mortgages. $410,000 of that on their West Auckland family home and the rest on an investment rental property they thought would be as safe as houses. It is costing us $6500 a year to keep afloat after all the income that comes in, so that's a complete loss, and that's just something we've got as a long-term passion of ours to try and get ahead. A lot of Kiwis incorrectly assume that if you have a second property that it is an investment. We've gotta ask, 'Could they be spending that money on something else and get just as much satisfaction?' Reaching your financial goals, says Hannah McQueen, is about spending money on the things that make you happy and writing off the rest as fritter. Hannah asks her clients to whittle it down to three. The non-negotiables for females tending to be grooming, kids' costs or activities and gifts. Males ` never gifts. They could take or leave those. Males tends to be alcohol, socialising and hobbies. The Masons will have to choose, but Hannah McQueen believes she can literally turn their fortunes around. I think if we got serious, I think we could find 50 grand, and we will be able to pay off your home mortgage, which is currently on track to be paid off in 25 years. We will be able to get that down to about five and three-quarters. That's crazy. That's amazing. That's crazy. That's amazing. $50,000. Hard to believe ` the family-home mortgage paid off in less than six years down from 25 years. And that's after the Masons choose to keep their rental. We were thinking that you were going to tell us that we have to sell our rental property. But if it's making you happy, then we factor it in. This isn't about deprivation. As soon as we get to deprivation you're going to fall off the wagon anyway. It will be interesting as we start this journey that some of the things that you've identified as your non-negotiables, they just change. So, let's get serious. This is how it will work. All income will go into one main account which will just pay the bills. A separate account will cover day-to-day expenses, such as groceries and petrol. With that day-to-day account, you're going to manually withdraw cash. Over the course of the year, though, all incomes coming into this main account, which you will not have EFTPOS access to, nor will you have EFTPOS access to the bills. For example, Hannah has allowed $300 in cash a week for food ` groceries or takeaways. How they spend it is up to them. Having the cash in your hand as opposed to using a credit card, though, will surprisingly make you more conscious of your spending. If you've got cash left over, that's yours to spend on whatever you want. If you've got cash left over, that's yours to spend on whatever you want. Just got milk this week. (LAUGHS) No. If it's that tight, you need to call and we readjust. Hannah also renegotiates the mortgages into smaller, morsel-sized amounts. The first one will be $50,000. They will aim to pay that off in a year. And then the next year, they will pay off more again because they're not paying the interest on that $50,000 they've just paid. So each year, they should be able to pay off more and more. It's as much psychological as it is mathematical, says Hannah. This is a plan which is subtle enough to get results so you can build momentum quickly, cos we've gotta see results quickly if we're gonna keep you engaged. It's maths. If you take an extra $1, and you put it towards paying off debt, you're gonna save interest, which kind of isn't compelling, but when you're talking an extra 50 grand a year for the next five years, that's 250 grand that was just kind of disappearing that's now going somewhere, and it's got a purpose. In three months, they should have saved $13,000. < Can you do it? < Can you do it? Oh, completely, eh? I think so. I think so. Yeah, I think so. It's, um` It's encouraging. It's exciting. And good on Kirsten and Mike for committing to that plan. We'll be following their fortunes ` or lack thereof ` in coming weeks. I'm very interested to see how they go with this, because that is not an easy task. I do that cash thing sort of. I do that cash thing sort of. Mm? And it works? I do that cash thing sort of. Mm? And it works? I reckon. Yeah, definitely. That's the show, but we will be on Facebook for the next half hour to answer your questions. Our programme is all about your thoughts, your problems. Do get in touch. And next week ` You may or many not want to admit this, but have you ever read the odd women's mag? Yes. My wife buys them from time to time. And we conduct a wee social experiment. That's ridiculous. Gobbledygook, quite frankly. Just what are these people signing away? It's Fair Go. It's Fair Go. Oh no, you're joking me. It's Fair Go. Oh no, you're joking me. No, trust us. You were great, though. That's next week. Goodnight. Copyright Able 2015