1st Jul 2015
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ASIC reviews One Big Switch
ASIC reviews One Big Switch

One Big Switch, the movement that encourages consumers to sign up in large numbers in order to secure discounts from service providers, has had its compliance with financial services laws reviewed by the Australian Securities & Investments Commission (ASIC).

The review follows the sign-up of more than 74,000 customers to its campaign to secure better home insurance deals. However, One Big Switch Pty Ltd did not hold an Australian financial services licence at the time. After concerns were raised by ASIC, the company applied for, and was granted, a licence.

As a condition of granting the licence, ASIC required the group to appoint an independent auditor to review its compliance with financial services law. The group appointed Kemp Lang Strang as a consultant and the law firm found that One Big Switch had potentially featured false and misleading statements in its recent insurance advertising campaign. Examples are:

  • advertising a ‘price beat guarantee’ without prominent and proximate qualifications to the offer, such as a minimum age requirement, and the prerequisite of switching from a comparable policy.
  • advertising an ‘average 30 per cent saving on life insurance’, when the pricing of this product depends very much on the health and lifestyle of the individual applicant.
  • advertising car insurance with an email titled ‘Could you save $600, and lock it in for 2 years?’ when that saving was not necessarily representative of the savings that could generally be achieved.

In response to the findings, One Big Switch has agreed with ASIC’s guidance to improve its compliance on advertising.

ASIC Deputy Chairman Peter Kell said, “In a time when household budgets are tight, offers of group discounts can be attractive to consumers. ASIC wants to ensure those making the claims are appropriately licensed and complying with important consumer safeguards. ASIC will not tolerate promoters’ failure to comply with the law.”

One Big Switch was founded by Lachlan Harris, former press secretary to Kevin Rudd. News Corp Australia bought a stake in the company in February this year after previously having an association through Moneysaver HQ, which also involved Pinstripe Media, David Koch’s production company.

Read the ASIC media release

Opinion: Who really benefits?

Everyone is keen to save a dollar or two on essential household expenses, but when offered a ‘great deal’, it usually pays to ask yourself who really benefits.

We’ve all seen the ads promising you can save $600 on your car insurance, which seems amazing given that in Sydney the average car insurance premium is about $1200. Or how about saving 30 per cent on life insurance – one of the most expensive policies you can purchase? Of course companies shouldn’t make such claims, as the cost of these premiums depends on too many variables, yet is doesn’t stop them.

The examples quoted in such claims are usually those of one or two customers who are at the extreme end of the scale in how much they were paying and how much they saved. For most people the saving is likely to be only a few dollars, which of course, is still better than nothing.

So, what’s in it for the comparison companies and companies offering to save you money if you join their growing numbers? Let’s face it; they’ve got to make money somewhere. Whether it’s commission on a policy, or the opportunity to market offers to members, money is being made, money that could be saved by contacting service companies direct.

Often the most effective way to save money is to shop around and use any offer or price comparison as leverage. Contacting your insurance company’s competitor for a quote then asking your current provider to better it, gives you a double saving. If you live in a state where gas and electricity prices are deregulated, do the same, or consider bundling to get an extra discount. And when it comes to renewing your car insurance, the more information you provide when seeking a quote, or if you can limit your mileage, you can usually save money.

Remember, if a deal’s too good to be true, it usually is.

Have you had a good or bad experience with comparison sites? Do you shop around for competitive quotes or do you tend to stay with the same company? Do the claims made in adverts make you consider switching insurer or utility provider?





    COMMENTS

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    Bonny
    1st Jul 2015
    10:52am
    If they can save me $600 off my car insurance then I'm scratching my head as my car insurance would be extremely cheap if they took $600 off it.

    I always ask them to send me the details of their good deal by email. Then I get don't you trust me that it is a good deal etc. I usually answer "No" and then they hang up.
    MICK
    1st Jul 2015
    1:49pm
    Saving money whilst getting the product or service is what consumers have to do these days with their bank accounts under attack from all sides, including governments at every level and of every persuasion.
    I am in the process of cutting off Energy Australia as my electricity supplier because I SUPPORT RENEWABLE ENERGY. Energy Australia has vested coal interests and has tried hard to keep us at the end of our 2 year contract by offering (supposed) power price cuts of around 10%. But we are going........and I can but hope that others will do the same so that those who profit from dirty energy eventually follow suit or go broke. The jury is clearly still out on that one.
    I suspect that the above story may be a bit if a beat up from competitors more than a genuine concern for customers. If there were problems the reports would be out there in their hundreds, which they are not.
    One Big Switch was one of the replacements I had been looking at but as it was hard to get any sense out of the Indian Call Centre workers I decided they were probably going to be trouble, so avoided them.
    Adrianus
    1st Jul 2015
    2:01pm
    I am pleased to hear you will be off the grid mick, especially If limited battery power means you will not post as much.
    Anonymous
    1st Jul 2015
    2:09pm
    I support renewable energy, as well. I just wish I could find some.
    Rob
    1st Jul 2015
    10:57pm
    I'm with you Frank. A Mick free zone
    dougie
    1st Jul 2015
    11:25am
    I do not trust anyone who has the way to save me big dollars. Whats in it them?
    No body does anything for nothing these days except it seems me. I love to help out with little household maintenance jobs for the oldies around. Do I charge - Never. Big organisations do not do this. Question every offer.
    MICK
    1st Jul 2015
    1:49pm
    Efficiency maybe.
    wally
    2nd Jul 2015
    1:43pm
    More customers paying less now and then jacking up the prices on them later?
    Adrianus
    1st Jul 2015
    11:35am
    I don't care how cheap the life insurance is. How can you possibly check to make sure they pay the claim?
    dougie
    1st Jul 2015
    1:37pm
    Frank,

    You are so right as even the Insurers that you think you can trust are shifty. I have friends who went through a one in 100 year plus storm and suffered damage to their property have been told that they have no liability for this claim. Those people who say that they are 98% satisfied with the particular insurer have just lost one client. My friends are now talking through their solicitor and I believe that they will win their claim. Should not be necessary to fight for what you are entitled to. Where would you stand with a no name no responsibility insurer?
    MICK
    1st Jul 2015
    1:50pm
    The dynamic duo again!
    Do a google search. Its here for all to see.
    Adrianus
    1st Jul 2015
    1:53pm
    dougie, Correct, the quick reinstatement of loss is why you would pay a premium. I agree, we shouldn't need a lawyer to convert the flood clause into plain English at point of sale.
    dougie
    1st Jul 2015
    4:30pm
    Micj=k,
    As usual you speak in circles but with your superior knowledge about everything and everyone I just cannot argue. Mainly because I have no idea what you are talking about. Do You?
    Infinityoz
    1st Jul 2015
    11:56am
    I was spammed for months with emails from One Big Switch about health insurance, but when I checked what was on offer [it was HCF they were promoting], I found the price was no better than my Medibank Private. I always get suspicious when there is no online comparison or quote available: if a company has to deal over the phone that suggests to me their 'deal' won't stand up to independent comparison. In the end I went through iSelect to get the info I wanted and found I could save $30 per month by switching to nib, a provider that wasn't mentioned by One Big Switch. I intend to go see my local Medibank office and find out if they are willing to match the deal, otherwise I'll be automatically switched to nib on my next payment date.
    KSS
    1st Jul 2015
    12:56pm
    Once again out come all the whingers with their negative comments.

    One Big Switch use the pressure of people power to extract an offer for a product from a company in the sector they are campaigning for. Such campaigns have been for home and contents insurance, health insurance, electricity supply, life insurance. They run a campaign, people sign up for a non-binding expression of interest, usually in the tens if not hundreds of thousands. OBS then goes to the market saying we have all these people looking for a better deal. The companies then make offers of products. OBS 'select' a deal and offer it to the people who signed up. There is no obligation for those people to take the deal. In fact you are actively encouraged to scrutinise the deal and make sure it is right for you. You can even use the offer (and that's all it is) to persuade a current insurer/provider to make their own better offer. Whilst there are many of those original expressions of interests who do not switch, many do and can save considerable amounts of money. But it does depend on your personal circumstances and you have to check and compare with a product you already hold (or are interested in).

    Just what exactly is so wrong with that? Once again people are complaining about having to take responsibility for their own affairs and doing their homework!
    bob menzies
    1st Jul 2015
    1:37pm
    KSS - well said - I was thinking the same thoughts.
    Adrianus
    1st Jul 2015
    1:47pm
    KSS and bob, surprisingly it would seem that not everybody understands the value of a relevant and warm data base in digital format. Personally I have avoided being on these lists with only moderate success.
    MICK
    1st Jul 2015
    1:58pm
    My understanding of the big energy retailers is that they not only buy energy from the generators but also have vested (financial) interests with them. The "people power" idea is wonderful...in a true free market. It remains to be seen if any of the small players are going to get a fair deal to be able to pass on here though.
    My wife and I are in the midst of signing up with a company which sells renewable energy. We do of course realise that this company will currently also have to include coal fired energy within the mix but we are happy to do business provided that it embraces new storage technology as it comes online and continues to move along the continuum of renewable energy. It is indeed an exciting new world.

    1st Jul 2015
    1:20pm
    I was with Real Insurance with a km per year policy. I switched to NRMA and got a better comprehensive cover with UNlimited kms for an $88 cheaper premium. Before Real I was with Bidget Direct who charged me $7.40 just to change my address with the same small town of 3,000 people - now there's a hide! I left them the next day. APIA is another one to watch closely for charging high insurance premiums. Just because they have "Pensioners" in their name is no guarantee they charge old people less. My wife and I certainly found this to be the case. Also watch an insurance company giving to higher cover each year "to keep in step with inflation" - another probably unneeded increase in your premium. There are also tiers with insurance covers - a from and to amount for the $ cover you can have for the same premium cost - so ask when getting a quote. Being under-insured for house and contents is another thing to be careful not to do, as you will only be reimbursed for the the respective percentage of the overall shortfall even if you experience partial loss of property. It can be like a minefield, so watch whose insurance threshold you step over. Good luck.
    MICK
    1st Jul 2015
    2:00pm
    There are insurance companies...and insurance companies. Many are good. Some are to be avoided.
    I went through the lot recently with home insurance and car insurance. The only one which horrified me was Coles Insurance. When I googled this group there were an endless number of complainants all telling the same story. To be avoided methinks.
    in2sunset
    3rd Jul 2015
    7:29pm
    Fast Eddie - thoroughly agree about Apia!! I am sure that older people automatically go with them thinking they are getting a good deal because the aim to 'pensioners'. Rubbish! My mother almost signed up with them - till we did a quote search, and were stunned at how much more expensive they were, and with less cover. They were dearer with everything.
    Bluey
    1st Jul 2015
    1:42pm
    Received a letter saying Sorry but we undercharged you on your last electricity bill. The following day another letter arrived saying adjustment has been made please pay $1.34. Apart from the money it cost me almost a sleepless night !!! How much did it cost Energy Aust. to notify me ?
    Anonymous
    1st Jul 2015
    1:55pm
    Bluey, I got a two-page telephone bill from Optus in 2002 for $0.02 threatening to cease my phone service. I had already paid the bill at the post office who rounded it down to the nearest five cents. I phoned Optus and they sent me a two-page credit for $0.02. How's that for cost, time, and environmental efficiency?!
    doggone
    1st Jul 2015
    5:20pm
    advertising is like politians - 1% fact, 99% bulldust.
    believe advertising and you believe in pigs flying, tooth fairy and santa.
    all fantasy.
    no wonders scammers and like are so busy easy as pie to suck people in.
    wally
    2nd Jul 2015
    1:41pm
    Hi mick. Good luck with the renewable energy. Are you planning to use a pedal powered electric generator like they used to use to power the old crystal radio sets in the rural districts? I'd guess that solar panels are the way to go. I've got 6 of them on my roof and they help, what with the rebate. When the rebate comes off in a couple of years, I'll find out how good they really are.

    On another angle with solar panels, I wonder if anyone has had any experience with house fires and the solar panel inverters causing fire brigades to fear electrocution if they squirt water on solar equipped houses that are on fire. Is this a real problem, or is it a furphy?

    As far as car insurance goes, my 20's something "Bling mobile" only has third party property insurance to pay for any damage I'd cause if I ran into and damaged anything with it.
    Not Senile Yet!
    2nd Jul 2015
    10:00pm
    OMG!!!!!
    The things people write on this site......it's a look inside the thinking & reasoning of all who have aged with the scars & battle wounds of survival across a time when most didn't give a damn......up until the current time of whatever you do.....you will offend me and my heritage and Liars are more believed than ever in the Political front.
    Ignorance is Bliss...... they used to say....then after a massive man-hunt.....someone worked out that the THEY actually don't exist!!!
    THEY constitutes the invisible.....the judgemental....and the most disagreeable views of anyone!!!!
    THEY are best ignored because the Great Family of THEY simply do not exist!!!!
    As for the Insurance Industry in General......Better to have than bot have it......as long as you can afford it.....but cheaper is just like dearer......not always the best deal!!!
    Insurance is a necessary evil whilst in high debt.....but in old age should be avoided like the plague......because their is such a thing as motive......involved in early departure!!!
    in2sunset
    3rd Jul 2015
    7:25pm
    The only people who end up saving $600, or large amounts, are those people who have not taken the time or effort to look around for the best deal. I shop around, get the best deal, (not necessarily the cheapest) - and EVERY deal of Big Switch has been DEARER than I currently pay. Obviously if you just renew your premium year after year, or take the first price you are quoted, you will get ripped off, and then the savings from Big Switch could be huge.
    rpflemo
    4th Jul 2015
    9:59am
    I switched my car insurance to Coles and saved just over $100 the first year. On renewal the price was much dearer than APIA when I advised Coles, they said they would match Apia's price and give me $50 for my trouble. I wasn't interested. How many other people just paid the renewal notice without checking. I think this was a scam.


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