The Toronto Legal Blog

Not so much "Good Bye" as much as "I'll See You Later"

2010-01-31T15:06:02Z

It's been a while since I updated this blog, and mostly before the holidays, it was just due to sheer volume of closings that were happening. In January, I was planning on getting back into updating the blog, and I even had some great articles planned with my outlook for the year. Unfortunately, some personal matters have arisen and I need to attend to them. As a result, I don't know when I'll get back to posting articles here.

People who know me have stood by me over the past few weeks and I want to thank them for their support. I recognize that there are a lot worse problems out there, but at the same time, I cannot ignore or try to escape from what I need to address. I have decided to not only take some time away from updating, but I will also be away from the office a little more in the next while. It is not that I am giving up on writing on my blog, but rather, refocusing my efforts onto something else that needs my attention.

If anybody is actually reading this and is interested in reading my writing, I can be found on Twitter at http://twitter.com/TOLegal.

Sent from my BlackBerry device on the Rogers Wireless Network

Why do we rely on outdated means of communication?

2009-11-09T22:21:00Z

According to the blog, my last post was 57 days ago, or almost two months ago. It's not the longest stretch I've gone without an update, but something new is certainly warranted. I've got plenty to rant about anyway.

This summer, I've been pretty busy. Unfortunately, many of my clients were from a different generation and believe that calling is the best way to communicate with me. While it is efficient if there requires a significant amount of discussion. It starts becoming a hindrance when people begin calling on administrative matters and call every 10 minutes to see if something has happened or don't leave messages.

For example, I was working (and still am working) on a commercial real estate purchase involving a client who does nothing but use telephone calls to follow up on an hourly basis. If he can't reach me after a few tries, he'll show up without an appointment. Whether it's to inquire about if the other side has signed back or if I've received his mortgage instructions, he can't follow the simple instruction of "we'll let you know when we get it". If anything, it causes his file to proceed slower, not out of spite, but out of inefficiency. Look at it this way: Think about when you are focused and working on something, and the phone rings. You need to change gears to address the matter. Once the phone call is over, you need to find where you left off and get back into your same train of thought. Now multiply that by about a hundred and you have a typical day for me.

I'm not insulting the client or complaining about the work, but rather, wondering why people do not embrace the use of technology to help simplify their lives. We have an email address solely for telephone callers that is easy to enter and will reach us almost immediately. I'm currently looking at using Google Talk chatback applications on my website to allow for real time instant messaging with me, where I can intake their information and assess the urgency of the matter. Why are people not using these as means of communication instead of calling?

I tell clients that email will often yield a faster response because I can assess each email and determine how urgent a matter is with minimal interruption to my work routine. In the era of wireless data devices and push email, alternative communication is something that people ought to be embracing and not ignoring in favour of antiquated means of communicating, like telephone calling.

Fix Commissions

2009-09-13T22:44:37Z

I was out with a group of friends and some of them had been considering buying their first home. I recommended the use of real estate agents for their purchase since the vendor will typically pay all of the commissions to their agent, so there isn't a direct cost. They made an interesting point by suggesting that there may be collusion between the agents to keep the price high so that they can collect higher commissions.

I've written before about how many parties involved in a real estate transaction may not be looking out for your interests and are driven by other motivations, usually in collecting commissions. Why is it that lawyers are required to avoid having a financial interest in transactions (i.e. commissions), but agents are not? Can they really be looking out for you if they are paid this way?

An interesting point was made that vendors are also affected by this alleged "collusion". If an agent sells for $10,000 less than market value, it only results in around $500 of lowered commission for them. A small sum considering the thousands of dollars they'll be collecting from commission, but quite a large sum the vendor is out.

This isn't to say that real estate agents are greedy or evil, but simply that there is something inherently wrong with the system. Real estate agents need to be renumberated by other means, rather than the actual selling price. Whether this is done through an hourly pay scale or a flat agreed upon amount in advance (e.g. 5% of the listing price) is something for discussion another day.

In the end, I'd still recommend using an agent, but always be cautious of who you choose. It's like interviewing someone for a job.

On a side note, I've recently heard ads on the radio about how using an agent will prevent purchasers from being left with "only a lightbulb", so it would appear that real estate agents are now taking responsibility for the condition of the property after closing. So if something is missing from your home purchase, ask the agent to fix it.
Sent from my BlackBerry device on the Rogers Wireless Network

How Banks Can Stop Mortgage Fraud

2009-08-30T17:55:37Z

Many recent publications that I've received have addressed the issue of mortgage fraud, but it keeps bringing me back to the same question: Why are lawyers continually held responsible and mortgage agents and brokers are given a pass?

If you think about it, mortgage brokers present banks and lenders with all relevant information to determine risk, along with current identification. The mortgage broker will have met with the borrower before any pre-approval is given by the lender, and mortgage brokers are often privy to much more information about the borrower than the lawyer. However, when a mortgage goes into default, it is always the lawyer that is examined first and the broker a non-factor. Lawyers may be held liable in some situations, but the broker is given a pass, despite their very heavy involvement in the deal.

If banks and lenders care about protecting themselves from fraud, why are they not stopping it at the earliest possible stage, the mortgage brokers? The answer is really more political than practical.

I had a conversation with a colleague about how there should be some rule that if a mortgage falls into default in the first year that brokers should be forced to return their commissions. However, if one bank did that, all brokers would pull their business from that bank, leading to a lower quality and quantity of borrowers dealing with that particular bank.

The system isn't fair, but life isn't either, and it's clear where our society places it's priority; in making sales no matter what the cost.

Sent from my BlackBerry device on the Rogers Wireless Network

Foreign Trained Lawyers Get Priority

2009-05-28T21:47:03Z

In the mail today came another complimentary copy of Precedent magazine, a publication that's supposed to be targeted to lawyers, but really, it's only for lawyers working on Bay Street. I've never really liked their style, but I feel bad about throwing out their work as soon as I get it, so I usually browse through it for a few minutes, looking at the pictures, before declaring that people need to realize that not every lawyer works on for a big firm in downtown Toronto.

Anyway, a brief article caught my eye regarding articling requirements for foreign trained lawyers. The Law Society is now allowing foreign trained lawyers who had work experience elsewhere to be exempted from articling. On the upside, this frees up available articling positions for Canadian law school graduates, since those are in short supply.

The downside, and this is really a negative, is that foreign trained lawyers can immediately open up shop and provide legal services, despite never having worked a day in Ontario. So the next lawyer offerring low prices may be someone who has absolutely no idea how things work in Ontario. Sure, they might have sat through a class and learned the basics, but it's not a real substitute for work experience.

In my view, it also creates a double standard: Canadian law graduates, with a proven standard, are forced to jump through hoops, whereas a foreign trained lawyer from a diploma mill university who worked as a tea server at a law firm under the guise of a junior lawyer can now skip articling completely.
Members of the Law Society, lawyers and paralegals alike, should be bordering on a revolt by now. But I guess unlike me, most lawyers actually throw out Precedent magazine without looking at it.

Sent from my BlackBerry device on the Rogers Wireless Network

Who's Looking Out For You - Part 2

2009-05-27T22:37:20Z

Sometimes people aren't looking out for you not due to personal greed, but due to their own lack of knowledge.

This post comes from a Tweet I had sent regarding why some real estate agents insist on attempting to provide their clients with legal advice. While many times, it helps clients understand, it can often do more harm than good. Many times, the agent will provide incorrect advice to a client, which he or she may rely on, and then proceed with a deal, only for the lawyer to tell them that the agent was wrong. It's not due to any ill-will of the agent, but rather from her over-reaching in her role. The agent's intent is to be commended, but she really would be better served deferring to a lawyer.

The worst part of these scenarios is when the client finally makes it to the lawyer and the lawyer tells them what the law is, the typical response is, "That's not what my agent told me." The result, for me at least, is a lengthy explanation of the law followed by a reminder that real estate agents shouldn't be giving legal advice.

Sent from my BlackBerry device on the Rogers Wireless Network

Condos Need Counsel

2009-05-26T21:25:00Z

I was recently consulted on a case regarding a dispute with a condominium. Many of these consultations usually are issues of fact that are disputed, but I had one that revealed an interesting point of law.

Two clients attended my office regarding the condominium threatening to remove their cats. Both have lived in the building for many years and have never been asked to remove their cats. Now, the condo has decided to enforce that rule. If they had consulted a lawyer, they might have realized that a court will typically not allow a condo to enforce rules that it has knowingly disregarded for a long period of time.

The problem is that the situation is lose-lose for my clients. If they lose, they will need to have their cats removed and pay for legal costs. If they win, they'll be able to keep their cats, but still need to bear some of their own legal costs. If the condo is unable to properly fund the litigation from it's budget, it could result in a special assessment for all the unit owners.

In the end, it's probably a good idea for a condo to retain counsel before it starts to take any serious action.

Sent from my BlackBerry device on the Rogers Wireless Network

Who's Looking Out for You?

2009-03-11T01:17:00Z

I completed a transaction recently that wasn't without controversy. My client had obtained a mortgage that he wasn't comfortable with and asked me if it was a good deal. As all two of my regular readers would know, it's something I can't answer. I told him to speak to his mortgage broker, but he didn't trust her. I gave him the name of another broker and said to seek a second opinion from him. He did so and realized that the mortgage his first broker had set up was not right for his situation and decided to go in another direction.

The original broker started trying to prod around and find out what kind of deal he got. She got nowhere. A rep for the original lender then gave me a threatening phone call, saying that he would deny any application that came in to him me as the solicitor.

Just another day in paradise I guess.

I have to ask both of them this: Since when did I become a partner in the mortgage?

The lawyer's role in a mortgage transaction is to ensure that clear title is given and that there is nothing else affecting the lender's interest. I was not responsible for "selling" my client the mortgage, especially if he was not comfortable with it. The lender even sent me life insurance forms, once again, to try to up-sell my client into something he may not have required. If the client doesn't want the mortgage, how can I force him to take it? In speaking with other brokers, it seems that first broker is upset that she won't receive her commission and the rep for the lender will not meet his targets for new mortgages. That's still not a reason to force my client to take a mortgage that he felt was unfavourable. I'm not engaged in brokering activities, so I had no power to renegotiate his mortgage.

In reality, I think fault lies with the rep of the original lender. He never wanted me as the solicitor on the file and tried to send it to another lawyer, a friend of his who he probably received a kickback. I gave no objection to this arrangement as it was their choice, But their lawyer never returned the calls of the client. The client got so upset he wanted nothing to do with him and came back to me, where I, *gasp*, actually tried to protect his interest. The rep realizes he messed up and now has to answer to the broker who is out of her commission.

So, I guess I'm sorry I did my job and fulfilled my ethical obligations. It had nothing to do with money or respect, but everything to do with customer satisfaction. I guess that doesn't mean much anymore.

It brings me to the point of this post: Who is really looking out for your interests? If the broker is only after commission, the rep for the lender is only out to ensure he meets his quota, and the lawyer that the lender chooses is loyal to the lender only, how can you be sure that you are being protected? Would you want to deal with a lender that behaves like this?

The only way you can protect yourself is to choose your own lawyer. Don't rely on what your real estate agent or mortgage broker wants you to use. As I have said before, make sure you are comfortable with your lawyer. If the lender won't use a lawyer that you are comfortable with, you need to wonder what the lender is trying to do.

Overall,I'm not worried. That rep is only one of many reps working for the lender, and I have no issues with the other reps. Keep everything rolling!

Blogging is so 2008

2009-03-06T22:38:00Z

While driving home from the office today, I was thinking about what I should blog about. After hitting the 401 and seeing the many supporters of our troops, I actually wanted to give my support by Twitter, but realized it wasn't the best thing to do while driving. That made it clear to me that blogging wasn't the way to go for me.

Often, I'll want to share a link or just a random comment from wherever. With Twitter, I can do it easily and right away. For my blog, I need to use a computer and log in before I can start to write. Blogging also requires a lot more time in the sense that I need to come up with a more complicated article to write, rather than just sharing one off comments that don't need further discussion on my part.

In speaking with friends, Twitter doesn't seem very popular with those of my generation. Facebook and MSN seem to rule with them. Many of my older clients barely use email, although one of them surprisingly was following me on Twitter during her closing. I'm not really sure of the best way to reach everybody out there.

Based on the results of my experiment to see if anybody was reading my blog, it became clear to me that only a handful of people were actually looking at the site. I'm going to keep blogging, but maybe not with the same level of enthusiasm as I used to. But given the lack of updates in 2008, does it really make a difference, especially if readership isn't that high?

If you are one of the few people who actually read this site and want more, follow me on Twitter.

Ask Me Anything. Well, Sort Of...

2009-03-04T13:53:00Z

With the drop in local home sales, many condo developers have been pushing their projects into final closing recently, leading to a spike in real estate closings for me lately. Unfortunately, many of these developers do things on such short time frames that I am often rushed to get everything done. This rush is really created because they can't get their figures together in time or they don't advise solicitors of the closing dates, thus forcing us to rely upon our client's memory.

As a result, I've had to close several condos with only a few days notice. The mortgage is often the most complex part. When meeting with my clients, I always ask them if they have any questions or if they want to review the documents themselves in more detail so that they can raise any questions or concerns with me. While some people may feel intimidated asking a lawyer a question that they believe may be stupid, I remind my clients that I've had almost everything asked to me in the past. This includes a client who pointed at the date on a signing document and asking what it was.

On one hand, I want to be able to answer all questions honestly and candidly with my clients, but on the other hand, a solicitor's insurance coverage doesn't allow them to answer or provide "non-legal" services. It's one thing to tell a client that I can't answer a question, but it's another when the mortgage company tells me I need to discuss on a non-legal issue with a client.

For example, I handled a mortgage for a bank where the bank also provided me with a life insurance application and told me to have the client sign it to agree to apply for coverage or to waive such coverage. I really do not believe that it is the role of a lawyer to sell insurance for the bank, but nevertheless, my client needed the funds and the bank would not advance without the completed application, so I put it in front of him for his review. His question, much like many I have had before, was, "Do you think I need this?"

The problem with this question is that it really falls into "non-legal" advice. I don't have knowledge of the client's financial situation or how reliant his family may be on his income. I don't know if he has a medical condition that affect his decision. I really don't know enough about life insurance or about his position to advise him on it. The answer I gave was a pretty standard one, "Ask your insurance professional."

Recently, with the downturn in the real estate market, I've also been getting more questions about what to do with the properties that people already own. These questions can range from "What do you think about the market?" to "Do you think I can flip my unfinished condo before closing?" to "Do you think I got a good deal?" Unfortunately, those are all questions I can't answer as a lawyer. It's sort of like asking your dentist what to do when your leg hurts; the correct person to ask in this situation is your doctor. For questions about the market, you should really ask a real estate agent.

So I'll keep inviting clients to ask me anything. I just can't answer everything.

CityNews Tips on Basement Apartments

2009-02-20T14:34:00Z

Last night, CityNews ran a story about how to convert a basement into a separate apartment for rental purposes. I've always been intrigued with basement apartments as I felt that they would be a nice option for extended family to use as guest suite. I applaud them for their recognition that it may be best to speak to an accountant or financial adviser about possible tax credits since it is always best to get advice from qualified professionals.

However, they did not mention speaking to legal professionals. Other than the permits, which they mention, there is one other issue that they do not address: the mortgage. While they mention that renting out the basement apartment may be a viable means to pay the mortgage, they did not mention that many banks and mortgage lenders prohibit any portion of the property from being rented out.

For example, in the standard RBC disclosure statement, clause M states that owner/borrower may not rent the property, or any part of it, without the prior consent of the bank. If you are negotiating a new mortgage, you will need to disclose the fact that part of the property may be rented out. Renting out the premises may affect your eligibility, interest rate, or principal loan. If you have an existing mortgage, you will need to obtain consent from the bank as without it, the bank can find you in default and call for repayment of the entire loan.

While the bank does not routinely send people to check to ensure that the property is not being rented out, before proceeding, you may wish to review the terms of your mortgage before undertaking such a large task.

UPDATE: Looks like CityNews has updated their article and linked to this post. Maybe someone will be reading!

Ontario Government on the Hook for Large Legal Bills

2009-02-17T17:31:00Z

I'm not really sure how to title this one. I was going to call it "WeirFoulds Sticks Ontario Government with Large Bill", but, while it is attention grabbing, it doesn't properly characterize my post or my opinion of the situation. So I eventually settled on the title that I used.

The Toronto Star is reporting that the Bay Street firm of WeirFoulds has billed the Ontario government an average of $31,113 per week over a 7.5 year case involving a fraud with the Ontario Realty Corp. The writer, and many commentors, appear to be outraged at the amount of money wasted by the Ontario government in this dispute.

The headline of the article suggests that the firm was billing $850 per hour for work, but it's not completely accurate. The article shows how only one of the lawyers charged $850 per hour and many other lawyers who worked on the file charged less. In reviewing the hourly rates, they don't seem particularly extraordinary. The rate is inline with the rates of senior litigators at large firms, so the rate itself does not surprise me. However, the number of hours billed by the senior litigators on the file may be somewhat high. I do not want to condemn WeirFoulds in any way on this matter as I do not know the details of the case, the complexity of the issues or why the hours worked out the way they did. Needless to say, having two senior litigators on a file is somewhat excessive. Usually, there would be one senior litigator, an associate, a law clerk, and an articling student (if available or needed). It would have been more cost effective to have the associate handle most of the file, the law clerk handle the administrative matters and the articling student doing research when necessary to keep the bill low. That way, the senior litigator would only need to bill for a few hours of prep time along with court time.

The Ontario government would also be considered a large client, and the firm would make a lot of concessions to ensure that they kept the Ontario government as a client, including lowering fees or hourly rates. While the firm did submit a cost claim, the reality is that they may have had a deal with the Ontario government to collect a smaller amount if it was unsuccessful in obtaining a cost order from the court. The Ontario government, though, could still strong-arm the firm into giving lower rates under the threat of never using them again. I think the firm would make some concessions in that situation.

Eventually, the government transferred the file to in-house lawyers and had them take it from there. This solution is obviously the cheapest as they can pay their lawyers less than one-third of the billable rate that they pay the Bay Street firms. The downside is that they need to keep staff around. However, I think the Ontario government can justify it given that they inevitably have a lot of litigation to deal with, given that it is the Ontario government.

Overall, this situation is nothing new. Large organizations typically don't have regard to the bills as the individuals approving them are not responsible for it themselves. However, many banks and insurance companies will work out a deal with the firm beforehand to ensure that they have enough in their budget to finance litigation.

LawMail - Email for Lawyers

2009-02-11T22:02:00Z

While browsing the Internet today, I found a service called LawMail which is supposed to be an email service targeted towards lawyers with special features. I haven't tried it, so I can't really comment on the service, but it looks to be ~~a knockoff~~ based on GMail. If anybody is interested in giving it a try, let me know the results.

[via Download Squad] ...

Law Firms Going Public?

2009-02-04T15:17:00Z

Although I'm a little late to the discussion on this, but the Financial Post has published an article discussing the possibility of allowing law firms to become publicly traded entities. The author makes some very good points in this article and it's worth a read. The short version is that, with the removal of the restriction that ownership of the firm must be held by lawyers in the UK and Australia, the author views that allowing law firms to go public is generally a good thing.

I'm not as concerned about the situation cited by the author about "Wal-Mart offering legal services", since with First Canadian Title and Chicago Title (through it's subsidiary FNF Canada) are already providing discounted legal services, that concept already exists. While I believe that such a practice de-values the work provided by a lawyer, I'm not sure that allowing law firms to go public would be particularly good or bad.

The only firms this would affect are the big law firms, and I don't believe that it will put smaller shops out of business. I was talking with a partner at a big law firm who had mentioned that the firm had considered delivering "retail" services to preferred clients which included notarizations, residential real estate and small claims work. He told me that it became an administrative hassle that yield virtually no profits. The areas in the large firms that it would affect are more likely the corporate, IP and litigation sectors, which cater more towards companies and are typically more profitable.

Other than the negative points raised by the author, the other negative impact that may arise may be in the motivation of the lawyers. In a typical partnership setting, many senior associates put their best efforts forward in order to make partner, giving them a share in the firms profits and a say (even if it doesn't go far) in the firm's direction. With a public company, the only way might be to provide stock options instead of making partner, but it doesn't really work. It could also mean that another lawyer could buy shares and basically achieve the same status as what some junior "partners" may have in the firm. The motivation to become an owner is basically wiped away, and it may hurt the quality of work. In addition, securities compliance may place an additional burden on the firm, resulting in reduced efficiency.

As the author notes, it's all speculation until we have a real case to study and determine if it will work. I don't think it will be a popular model, but it's an interesting concept.

Which Type of Real Estate Agent is Best?

2009-02-03T19:35:00Z

I know that I haven't been posting a lot of more serious articles for the average purchaser or seller lately, and it's mostly because with the market the way it is, I haven't seen anything particularly new or interesting that dictates an article. Instead, I've been looking for inspiration elsewhere. While I patiently await to see if my last post shows any readership, I might as well post something more serious, even if it hasn't been confirmed that someone is actually out there reading it.

While awaiting the results of my last post, I began to browse the MLS listings to see what was available in Toronto. There were many properties available, but I noticed that several agents held the majority of listings for certain areas. I started to wonder if it was a good idea for purchasers or sellers to engage these agents because of their presence in the area.

On one hand, a busy agent shows that s/he is familiar with the area and can give you a good idea of what to spend or what to expect to get on a sale. Similarly, one might infer that the agent would not be able to develop such a large client base if it were not for positive results and great exposure to the target market. On the other hand, a busy agent may be too busy with existing clients to focus on your matter. Similarly, s/he may push properties being sold by existing clients to you if you are purchasing. If you are selling, the agent may push other properties before yours. Given that there is only so much time in a day, the agent can only do so many showings, and your matter may get lost in the shuffle.

It's similar to the problem that I have mentioned before with other lawyers who are too busy. The difference is that while some lawyers may just consider your matter to be administrative, an agent does not have that luxury. A busy lawyer may delegate a matter in its entirety to a clerk or assistant, but a real estate agent cannot. The agent must remain active in selling or scouting properties with the client and cannot simply pass it off to an employee.

I don't believe that there is an easy answer to this question. A busy agent does have the exposure, but the not-so-busy agent has the time. The problem is that if a representation or listing agreement is signed, it can bind you to the agent for several months, and trying to go around it could cost thousands of dollars. At least if you don't get along with the lawyer, the cost is usually only a few hundred dollars to transfer your file out. It's a difficult decision, but I think that before engaging an agent that you use the same strategies as you would when choosing a lawyer.

Is Anybody Even Reading This?

2009-02-02T16:27:00Z

I remember watching this routine on Late Night with Conan O"Brien where Conan and his then sidekick Andy would just do whatever they felt like because they thought nobody was watching. Obviously, since there was a live audience, it was a scripted routine.

I've always wanted to do something like that, but was always afraid of reprecussions in the oft chance that someone actually was reading. I've heard from friends and clients that they occassionally read my blog (sometimes through Facebook). I even had one comment that said that my post had been picked up by Google News, which apparently means that I'm well read. But the lack of comments seems to suggest a low (if existent) readership.

So this morning, while stuck on the 401 coming into work, I came up with an idea. MSN lists the top Windows Live Search phrases everyday. Therefore, if I post the most popular search phrases over the past few days in this post, I should have a lot of people viewing this post. If you are actually reading, you can let me know by dropping a comment or voting in the survey. I recognize that this post is probably flame bait, but it's really more for curiousity than anything else. If you are reading this on Facebook, you can drop a comment in the comments section of this note. And if you do decide to flame, avoid coarse language or remarks that are too derogatory . Don't forget that I can moderate them.

Without further ado, here are the search terms:

Akon

Fiat

Aretha Franklin's hat

Presidential salary

Cheerleading coach

Academy Award nominees

Brangelina's new home

Virginia Tech murder

Plastic surgery for the dead

Carnivorous sea squirt

1,800-year-old figurine

Olivia Newton-John's ex

Football concussions

Blowfish poisoning

$13 million house for $100

Best Super Bowl ads

Virgin Atlantic food

Where's the bailout for everybody else?

2009-01-30T19:29:00Z

I was looking on the Internet the other day and came across this somewhat older article about how a business was forced to close after a bridge collapse. While it is common sense to most small business owners that something could happen that would force them out of business, it seems unfair that the government does not provide support to local, small businesses, especially when the apparent cause of their loss results from a faulty bridge built by government contractors.

In a time when governments are just handing over money to large, American automakers, there should be some support for small businesses. The American automakers couldn't compete with foreign products; it's nobody's fault except their own. They developed the leasing schemes, they developed the business model, and most importantly, they developed the substandard and unsellable product. In the case of the Minneapolis business, the closure was the not the result of any mis-management on their part, but on poor government work.

So, why are we helping the American automakers?

Belkin Posted Fake Reviews

2009-01-29T19:14:00Z

Belkin, a manufacturer of networking and computer products, has had to issue an apology for providing reviews of a product that were paid for by the company. A system offered by Amazon.com called the Mechanical Turk paid individuals $0.65 for each review that they posted.

Like many consumers, I was upset about the fraudulent behaviour of the company, but then I started thinking more about it. When researching products online, many people, including myself, will search the Internet for reviews. By using this Mechanical Turk system, it can skew the reviews by making a defective or substandard product look good. It means that you can't trust reviews out on the Internet, even when there are hundreds saying the same thing.

The next thought I had was about how I could use it to improve business. As any reader of this blog can tell you (if any one even is reading it), I don't use the Mechanical Turk system, and it's clearly reflected in the comments section. And no, I don't need to pay people NOT to read the blog postings.

But I could see some people using it. For example, a company that is promoting a product could pay a small sum to those people who join a Facebook group, add them as a friend on Facebook or MySpace or follow them on Twitter. There would then be a "bandwagon effect", which others may hop onto.

More Proof that Windows Vista is Useless

2009-01-28T19:24:00Z

Even though I don't think anybody is really reading this, I've made views about Windows Vista pretty clear before. To further prove the point, CNet has installed the next version of Windows, Windows 7, on a netbook. For those who are unfamiliar, a netbook is a small computer with typically less powerful components and is focused more on Internet use. Technology-wise, the performance should be about in-line with a mainstream computer from about two years ago.

While this version of Windows is in beta, meaning that it is not completely finished, CNet, along with many of their readers, are reporting improved performance over Windows Vista. It is uncommon for a newer operating system to perform better on older hardware than an older operating system. It just establishes that Windows Vista was an ill-conceived product that should not have been released at large. Microsoft would have probably been better suited to skip Windows Vista and focus on Windows 7 as it's successor to Windows XP. For most businesses and individuals, it's not as though Microsoft would have been hurt that much selling Windows XP on new machines since most come with the Windows operating system. Then again, by including Vista, they also force many people to also buy a XP license, but that has largely been negated by the available downgrade license which includes both Vista Business and XP Professional.

It kind of reminds me of this comic strip. Maybe Microsoft is moving following the depicted business model.

Don't Spend What You Don't Have

2009-01-27T19:08:00Z

It's a simple rule that many people can't seem to follow. I've said it before that many people seem addicted to debt and expect to borrow against everything to live in the moment. Ordinarily, I see people refinancing with mortgages to consolidate their debt, but I've seen other things, such as giving up a business as security, offering to allow wages to be garnished in advance, and secured lending with an owned automobile as collateral. Why can't people just save up for things and buy them when they have enough saved?

I was playing poker with several friends who held MBAs and they were telling me about a new version of the board game Monopoly that did away with the concept of cash and allows the use of credit cards. I guess on one hand Parker Brothers wants it to be more realistic, but on the other hand, it doesn't teach kids fiscal responsibility.

An article came out from MSN Money discussing ways in which one could abandon the use of credit and focus more on spending within a budget. To me, the items contained there are pretty common sense, but I guess a lot of people just need to hear it again.

In today's economy, homeowners cannot simply rely on increased housing value to refinance their property and cover their debt. Homes were never meant to be credit cards and the current housing situation clearly shows that they cannot be used as such for the long term.