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Australia’s ‘worst’ products, services named and shamed

AMP and Kogan

AMP, IKEA and Kogan are among the businesses taking out the gongs nobody wants to win, with consumer group Choice revealing the 2019 Shonky Awards.

“Every year we have plenty of contenders lining up for the awards you’d think nobody would want,” Choice said on its website announcing this year’s Shonkys, “[and] every year we receive hundreds of nominations for shoddy products and dodgy services.”

Choice has been running the Shonky Awards since 2006, which the group said is open to products and services that are nominated by the public, and subsequently tested in-house, which:

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  • Fail quality or safety standards
  • Perform poorly during product testing
  • Include hidden fees and charges
  • Lack transparency/create consumer confusion
  • Are marketed with false or misleading claims, or break their promises
  • Leave consumers worse off
  • Are poor value for money
  • Generate demonstrable anger or frustration from users

There were fewer “winners” announced in 2019 than last year, with six reaching the stage of being named and shamed by the consumer group. They are:

AMP superannuation

While Choice noted that AMP has already faced scrutiny at and since the royal commission for its financial planning, it was the company’s “grossly underperforming superannuation” which attracted a rebuke in the 2019 Shonkys.

According to Choice, AMP’s superannuation offering has “the lowest customer satisfaction ratings on record and boasted no fewer than a million-plus inactive accounts across its AMP Retirement Trust and Super Savings Trust products in 2018”.

“These idle accounts are slowly, inexorably losing value as the fees eat into the principal, quite possibly surpassing any gains,” it said.

Choice-affiliated Super Consumers Australia’s senior policy adviser, Cameron Sinclair, claimed that AMP “has a business model that is rotting from the inside out”.

Freedom Foods XO Crunch

The XO Crunch breakfast cereal for kids, made by Freedom Foods, was recognised for “gaming the health stars system”.

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According to Choice, the product is marketed as being a source of fibre, but that eight bowls of the cereal would need to be consumed each day to meet the recommended daily intake, “by which time you’d have eaten 62g, or 14 teaspoons, of sugar”.

“We think XO Crunch’s health stars are hanging from a thread, not least because the current rating system puts naturally occurring and added sugars in the same category. There’s been a call to count these separately, which makes good sense to us,” it said.

Choice claimed that the product is 22 per cent sugar, despite being marketed as being a “fun and nutritious way to start your kid’s day”.

IKEA fridge

It wasn’t the Swedish flatpack retailer’s furniture that drew the ire of Choice, but rather its Nekyld fridge.

“The Swedish game changer turned over $63.6 billion in revenue in 2018. That’s a lot of bookshelves, cupboards and bed frames,” Choice said.

“So why get into refrigerators? Especially when you’re no good at building them — or rather, getting them built.”

According to the group, IKEA’s fridge failed on a number of fronts, including using more energy than it claims, and failing to maintain a constant temperature, potentially spoiling the food contained within.

“Temperatures inside the freezer change by 10°C, depending on the outside temperature. Which means the Nekyld isn’t safe for long-term freezing,” it said.

The IKEA mention comes a month after Choice found that 17 per cent of the fridges it had tested over the past year had “arrived non-functional, had a noticeable fault or failed energy testing”.

Kogan

Online retailer Kogan was alleged to have breached Australian Consumer Law over its customer returns, following “many stories” from customers grappling with trying to get a refund for faulty goods.

Choice said that it previously investigated Kogan at length, following which the retailer “cleaned up its terms and conditions a bit”.

However, Choice suggested that “they’re still ambiguous, and still contain terms that contradict those of the ACL”.

The group went as far as to urge shoppers not to do business with Kogan as it expands into financial services, travel, utilities and car sales, stating “if Kogan’s track record with its electronics business in anything to go by, we recommend you steer well clear of these offerings”.

Medibank

Health insurer Medibank was recognised by Choice for being the worst of a “sector in shambles” and a product that “often delivers little value for money”.

According to the group, private health insurance often “gives you very little beyond what’s already provided free through our national healthcare system”, and cited Medibank’s Basic Accident and Ambulance cover are a prime example.

“When Medibank says ‘basic’, what they really mean is ‘basic rip-off’. We’ve found Basic policies from Medibank that are more expensive than some Bronze policies from the next tier up,” it said.

“The cases vary from state to state, but their Basic Accident and Ambulance ($500 excess) policy, for example, is more expensive than the cheapest Bronze in six states we looked at (NSW, ACT, NT, SA, WA and Tasmania).

“It costs more and it delivers less, which is what gives this slippery financial product its special sheen of shonkyness.”

Pet insurance

The last Shonky Award went not to a particular provider but to a service in general: pet insurance.

According to Choice, the conditions generally imposed by pet insurance policies “make it worthless”.

It said that insurance is generally not available to older pets, even healthy ones, meaning they need to be taken out when the pet is very young, long before the majority of policy holders would need to lodge a claim.

Furthermore, the group took aim at the terms and conditions which they said enable insurers to “make any changes they like when you renew your policy every 12 months, including increasing the premiums; reducing coverage, payment limits and sub-limits; and adding exclusions”, or that some provide diminishing coverage over time or do not cover out-of-hours vet costs.

Adam Zuchetti

Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at This email address is being protected from spambots. You need JavaScript enabled to view it.

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Australia’s ‘worst’ products, services named and shamed
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