Super fund tops the dodgy list

Reputation is everything. And two products preferred by many retirees have just suffered a huge hit to theirs after the 14th Shonky Awards were announced this week.

The banking royal commission exposed many banks and super funds for their dodgy behaviour, but none more so than a range of AMP products.

AMP’s superannuation arm was left  in tatters after the royal commission found more than a million ‘zombie’ super accounts. AMP’s bad behaviour included charging dead customers for consultancy fees and live customers fees for no service, as well as inhouse tactics pressuring staff to sell unsuitable products to customers.

“If your superannuation is with AMP, chances are you’ve had your retirement leeched off to fund its executives’ lifestyles,” said Choice chief executive Alan Kirkland.

“Managing people’s retirement funds isn’t your average business – there’s a higher moral standard to meet when it comes to people’s security and comfort in older age, and AMP has failed this standard.”

Australia’s private health insurance industry is also under fire and rising premiums and diminishing cover are leading many people both young and old to dump the system in favour of free public services.

Choice awarding Medibank ‘Basic’ Cover health insurance for ‘failing the basics’ will also do the industry no favours in its pursuit of credibility.

The federal government’s introduction of new Basic, Bronze, Silver and Gold private hospital cover tiers were meant to make health insurance simpler and more appealing.

However, the system is as confusing – and expensive – as ever and, as Choice warns, rip-offs are still common, singling out Medibank’s ‘Basic’ Cover as an example.

Not only is Medibank’s ‘Basic’ cover more expensive than the cheapest Bronze options in NSW, ACT, NT, SA, WA and Tasmania, but its level of cover is ‘thin’, to say the least.

“2019 is the first year that private health insurance has topped the list of financial worries in Choice’s regular national surveys and it’s easy to see why,” said Mr Kirkland.

“A new system that was meant to make things simpler has turned into a mess, thanks to rip-offs like those from Medibank.”

Mr Kirkland encouraged Australians to “escape the industry marketing” and visit quality health comparison sites “to see if they even need these junk policies at all”.

Choice also awarded Shonkys to Kogan, Ikea, Freedom Foods, and pet insurance.

On Kogan:
“Kogan is a serial offender when it comes to consumer rights,” said Mr Kirkland.

“Kogan needs to improve its customer service and stop beating around the bush when its products are defective.”

On IKEA’s Nedkyld Fridge
“Not only is it terrible at keeping your food cold, when Choice tested the Nedkyld’s energy use against its star rating, it failed the test,” said Mr Kirkland.

On Freedom Foods XO Crunch:
Freedom Foods claims its XO Crunch cereal as a “fun and nutritious way to start your kids’ day”. However, 22.2 per cent of it is sugar.

“Every year it seems there’s a new shonk in the food industry trying to pass off junk as healthy,” said Mr Kirkland.

“The food industry has gamed the Health Star system to make a big bag of sugar look like a healthy choice for your kids – and that’s a disgrace.”

On Pet insurance:
Choice found no merit in any of the 86 pet insurance policies it reviewed.

“Pet insurance is the insurance a business sells when it wants to make money without providing any service at all,” said Mr Kirkland.

“Riddled with exclusions and technicalities, pet insurance is one of this country’s worst-value insurance products. It relies on emotionally manipulating your love of your pet to sell you worthless insurance.”

What do you think is the shonkiest product of the year?

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Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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