One of the credibilty builders (i.e. smokescreens) that United First Financial agents use when trying to sell their Money Merge Account is… “It’s based on the Australian banking system!” The claim is that this “system” has been used successfully in Australia for years, and so we should believe in it too!<\/p>\n
However, the truth is that this “system” is all but dead in Australia because people (and regulators, to some extent) figured out what a scam they were.\u00a0 Here’s some information provided to me by someone in Australia who has done extensive research on the issue of mortgage acceleration:<\/p>\n
What we found with a number of consumers we assisted, was that they moved from dealing with a very simple mortgage arrangement (just make payments) to a more complicated system.\u00a0 They had been told that the system would cut their mortgage time dramatically, without making extra payments.\u00a0 Some of these borrowers were actually told by promotors that because they would pay their mortgage off so soon, they should look at borrowing extra for a car or renovations.\u00a0 In other cases, the borrowers themselves believed that they had a much shorter mortgage period and therefore were less cautious with their spending.\u00a0 The other problem was that the demonstrations often showed big decreases in the mortgage based on unrealistic spending estimates.\u00a0 When the plan didn’t go to plan, some people just lost financial control – and given that using a credit card was part of the plan – got deeper into debt.\u00a0 In a number of cases borrowers’ homes were at risk due to the additional complexity of the plan and the additional credit made available.<\/p>\n
While software was not usually provided as part of the plans in Australia, my view after looking at some of the software, is that the software would not really help reduce confusion.<\/p>\n
The key problem was that people believed (because they were told) that they could spend in the same way as they always did, and their mortgage would be paid off faster.\u00a0 Anyone going into one of these things with that belief is likely to struggle – or get into real trouble.<\/p><\/blockquote>\n