A very good year
The consumer landscape may remain perilous in many respects, but we thought it fitting and proper to point to some exciting consumer wins from the past 12 months.
From food labels that actually give you some idea about what's inside, to the imminent demise (we hope) of excessive credit card surcharging and the forthcoming review of commission-driven remuneration in both life insurance and mortgage broking – we're making real progress out there.
The following is a short list of recent developments that CHOICE has had a hand in, either through our investigative or campaigning work or through our lobbying of lawmakers.
Some wins are the culmination of many years of staying on the case and demanding change. It's good to know we got there in the end in these cases – or at least helped moved the issue that much closer to a happy ending.
This list is a general round-up – read more about our specific CHOICE Campaigns here.
On the financial front
Serial surchargers on notice
The Financial System Inquiry turned out to be timely for consumers who'd rather avoid getting fleeced by surcharging merchants (think airlines) bent on punishing you with outlandish fees for daring to use your credit card.
We've long called for an end to the surcharging rort, and at long last one seems to be at hand. As of mid-2016, the ACCC will be empowered to punish excessive surchargers. This watershed moment has been a long time coming (since 2003, in fact) and we can only hope that having an enforcer on the scene will stop the surchargers in their tracks.
Mortgage broker remuneration
The government has assigned ASIC to take a critical look at the way mortgage brokers are reimbursed, which is definitely a win in our book.
Shortly before the Financial System Inquiry's report was released, CHOICE conducted a hands-on mortgage broker investigation and found more than a few problems, including pressure sales tactics, inappropriate advice, lack of commission disclosure and upselling with little consideration of risk.
Life insurance commissions
The Financial System Inquiry has called for reform to the commission-driven remuneration model in life insurance.
ASIC's recent investigation into life insurance advice found that 37% of advice failed to comply with legal requirements to prioritise the needs of clients. When an adviser was paid under an up-front commission model, 45% of advice did not comply with the law.
Financial adviser training
Even better, the government has called for higher educational and training standards for financial advisers. Starting in 2017, new financial advisers will have to actually hold a degree in their field of expertise, pass an exam and spend a year developing their skills.
The fact that there have been no such enforceable standards speaks for itself. We've been lobbying for reform to the financial advice industry for more than a decade.
Credit card cost disclosure
In a separate Senate inquiry, credit cards came under the microscope. The resulting report calls on government to impose a number of changes on the industry, many of which centre on better disclosure of the true costs of using a credit card, especially in marketing and credit card statements.
The report is well in line with our submission to the inquiry and touches on many of the issues we've been focusing on this past year, such as cardholders being able to close accounts themselves online – or 'click and close' – instead of having to deal with bank staff trained to talk them out of it.
Following our 2015 Shonkys event in October, a number of shamed recipients came around to doing the right thing in the days that followed.
- Arnott's committed to getting rid of it's highly questionable "school canteen-approved" label on its Tiny Teddy biscuits by mid-2016, after we pointed out that 'hundreds and thousands' are classified as confectionery under the National Healthy School Canteen guidelines and are "not recommended on the canteen menu".
- IKEA also saw fit to remove non-leather couches from the leather section of its website, which we consider a good move. After all, why call it leather if it's not?
- Finally, the behemoth Coca-Cola Company sheepishly agreed to end its funding of the Global Energy Balance Network, whose downplaying of the dangers of sugary, high-kilojoule beverages was certainly shonky-worthy.
On a related note, the ACCC finally caught up with the false and misleading claims of Nurofen's "targeted" painkillers for migraines, period and back pain, which contain exactly the same active ingredient (ibuprofen) than the company's less expensive, non-targeted products. We handed Nurofen a shonky for playing fast and loose with the truth way back in 2010.
The ride sharing service UberX is now legal in the ACT and NSW and will become legal in WA next year, which we think is a win for consumers who will now have more choice. Shortly before these state governments saw the light, we conducted an in-the-field comparison of taxis vs UberX and found that UberX was cheaper than a taxi around nine times out of 10 and that on average, taxis were 40% more expensive than UberX. We also found the UberX service to be safe and reliable.
Mental health and insurance
In a case that we've been on to from the beginning, the Victorian Civil and Administrative Tribunal (VCAT) ruled in favour of a young woman, Ella Ingram, whose travel insurance claim was knocked back by QBE due to a general exclusion for mental health conditions.
VCAT said: "QBE engaged in direct discrimination in breach of section 44 of the Equal Opportunity Act, first, when it issued her with a policy that included the mental health illness exclusion and, second, when it refused her indemnity relying on the terms of that exclusion." We hope the ruling is the shape of things to come.
Health star ratings
After a lot of heated back and forth between our food and nutrition experts and the mega-foodmaker Kellogg's, the foodmaker committed to add health stars to its breakfast cereal products. We hope the likes of McCain, Mars and PepsiCo will soon follow suit.
This is just the short list – we had lots of other little wins along the way that we're confident will add up to bigger wins down the track. All things considered, 2015 has been a pretty good year for consumers. And while there are still many rivers to cross, it's good to know we're getting there.