The CHOICE Shonky for Blinding us with dodgy science
Magazine ads are littered with terms such as “clinically proven”, “dermo-clinical trials” and “in vitro testing”, while tantalisingly obscure substances with names such as “Tetrahydroxypropyl Ethylenediamine”, “Elemi PFA”, ”Oli-vityl”, “Bioxilift” and “Nutrileum” proliferate.
There are even references to so-called clinical trials, with very precise and impressive-sounding results – “0.7mm wrinkle lift corresponding to a 13.2 year decrease in age”. That sort of thing.
It all sounds so credible, they could be advertising a new wonder drug. But these are all just ads for cosmetics, which – if they actually lived up to any clinically meaningful claims – would have to be registered with authorities, which they’re not. But you’d figure that out anyway if you read the fine print and followed the numerous asterisks, which mention disclaimers such as “cosmetic lift only” and “consumer perception study”.
In other words, shonky science.
Garnier, Chanel, RoC, Nivea, SK-II, Elizabeth Arden, Avon …all the big names do it. But the Shonky goes to L’Oréal – because they’re worth it. Its Elvive shampoo, conditioner and serum regime combo comprises three products to give you hairs that’s “4x smoother and sleeker”. But what do they measure it against for the sake of a scientific comparison? Just one product: plain shampoo. No surprises the trio comes up trumps in the comparison. Shonky? You bet.
The CHOICE Shonky for Profit Protection Insurance
goes to the
Credit protection insurance industry
You know when you sign up for a credit card and the provider tries to upsell you extra insurance? Offered by the likes of the Big Four banks and Citibank, it’s called “credit protection cover”, and it’s supposed to cover your credit card, home loan or personal loan debt if disaster strikes and you can’t make repayments. So, one less thing to worry about if you lose your job, get hit by a rampaging camel or die. However, with plenty of hidden catches and traps, our investigation of these services found they registered high on the Shonky barometer.
For a start, it’s very expensive compared with life insurance or income protection insurance. That’s despite the fact that only 15% of income from premiums is returned in claims payouts, compared with about 74% for other types of insurance. In all, less than 1% of people with this insurance make a claim and then, thanks to some pretty tight exclusions in the policy, 12% of these claims are rejected – a much higher rejection rate than for other types of insurance. Credit protection? Sounds like insurers are only protecting their massive profits.
Given the Consumer Credit Code has hardship provisions for personal disasters, consumers would be better off skipping this shonky credit protection insurance and talking to their lenders about a solution.
The CHOICE Shonky for Sky high surcharges
Qantas and Tiger Airways
Thankfully, ads for budget flights that conceal hefty hidden taxes and surcharges have been outlawed, so now the price you see advertised is the price you pay. Well, almost. If you book online, as many do, be prepared to fasten your seatbelt and watch the price soar as the credit card surcharge is added.
Airlines charge flat fees on a per-flight or per-passenger basis – or, in the case of Tiger Airways, both. Depending on the total travel value, these charges are potentially a lot higher than the airlines’ costs. On a $200 credit card booking for a Sydney-Melbourne return flight, Virgin and Jetstar charge $6 and Qantas charges $7.70 – yet Tiger’s fee is $12, or 6% of the fare. That’s a pretty big mark-up on the average fees paid by merchants to process Visa and MasterCard transactions, which are less than 1%, and even on Diners and Amex at about 2%. Internationally, Qantas takes the prize, with a $25 surcharge per passenger, whether it’s a $500 cheapie ticket to Fiji or a $10,000 first-class ticket to Europe. So we’ve decided to award Qantas the Shonky, with Tiger the runner-up.
Airlines deny the surcharge (which Tiger euphemistically calls a “convenience fee”) is ridiculously high. Qantas says it doesn’t even cover costs – it’s apparently not enough to subsidise the merchant service fee liability incurred by the folk at the pointy end of the plane. We concur with the Reserve Bank, which says “there are some cases where surcharges appear considerably higher than these [merchant service] fees. This latter outcome is likely to reflect the market power of the merchants concerned.” In other words, they charge a lot because they can.
If we could just knock this shonky surcharge on the head, we’d only have to worry about fees and surcharges for baggage handling, dodgy meals, hiring headsets, using on board toilets and so on.
The CHOICE Shonky for Teleconfusication
Tel.pacific phone cards
International phone cards are a cheap and convenient way of phoning overseas. But with their ever-changing terms and conditions and all sorts of fees and surcharges, you never quite know what you’ll actually end up paying.
The Telecommunications Industry Ombudsman has been inundated with hundreds of complaints from beshonkied consumers about inaccurate, incomplete or out-of-date information. This year, the Australian Competition & Consumer Commission even took three phone card companies to court for misleading and deceptive conduct. New industry guidelines for phone card companies now mean fees must be clearly displayed in all advertising bumph. However, that doesn’t mean you pay less of them. And what could have been a great victory for transparency was somewhat tempered by the fact that fees and charges aren’t printed on the actual card.
When we looked at the market, we decided that while several cards deserve Shonky commendations for ludicrous fees and charges, phone card company Tel.Pacific should get the award for the sheer number of outrageous fees charged. We found connection fees, disconnection fees, daily service fees from when the card is activated (even if you never use the card), per minute surcharges for using 1300 and 1800 numbers, fee rounding and block rate charges of 10 minutes or more. The type and amount of these extra charges varies from card to card – and Tel.Pacific offers more than 80 different cards, making comparison shopping fairly arduous.
But then, why even bother? Just when you’ve found the optimal combination of call rates and changes, you’ll note that the rates “may change without notice”.