Consumers and commissions - opening up the business of switching02 Aug 11 03:36PM EST |
CHOICE has partnered with One Big Switch
to help 1,000 Aussies get better home loan deals with our eyes wide open – and focused squarely on the benefits for consumers.
There is nothing new about consumers switching to get a better deal, or about banks paying commissions to sign up customers.
What is new – and the reason CHOICE has embraced the Big Bank Switch – is the potential power of group switching to reset the power between consumers and big business.
CHOICE has spent decades campaigning against this imbalance in areas like banking, supermarkets and telecommunications. In these markets, the negotiating power of a single consumer is never going to extract the sorts of discounts available to the big end of town.
Getting those discounts means squeezing the margins that exist all around the place on essential goods and services, and putting money back into the hands of ordinary mums and dads.
CHOICE will be doing this transparently, as will our partners at One Big Switch, who will use the power of the Big Bank Switch to source special mortgage offers with a genuine group discount.
One Big Switch has made it clear they will be completely transparent about any commissions and will publicly disclose commissions earned. Once published, it is intended that these will set a new industry standard for transparency.
But the CHOICE Big Bank Switch is an experiment - as far as we know, a world-first.
We simply don’t know what deals One Big Switch will be able to source from the banks, and based on this, how many mortgage holders will go on to take up an offer, nor what referral fees CHOICE will receive.
Any funds CHOICE earns through the Big Bank Switch beyond its costs will be entirely reinvested in further advocacy to benefit consumers. Self-funding campaigns are part of the future and will significantly increase CHOICE’s capacity to make sure the consumer voice is heard.
What we do know is that the sorts of profits some are talking about are nothing remotely near the likely benefits for CHOICE and our partners.
We will be judged by those benefits, with fierce scrutiny as we should be. And importantly, we will be judged by whether the CHOICE Big Bank Switch saves money for the most important people in the banking sector – Australian consumers.