No loopholes, no carve-outs insist coalition of consumer groups

A coalition of major consumer groups has warned the Government against allowing any loopholes or carve-outs within new legislation enacted in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The coalition of groups which included Choice, Super Consumers Australia, the Consumer Action Law Centre, Financial Counselling Australia, and the Financial Rights Legal Centre said it was supportive of legislative measures outlined by the Treasurer, Josh Frydenberg, but only if any loopholes or exemptions were removed.

And the group took particular aim at insurers, particularly those offering add-on insurance and life insurers who sought to avoid contracts.

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Commenting on the situation, Choice chief executive, Alan Kirkland said a pivotal moment had been reached in implementing the vision of the Royal Commissioner, Kenneth Hayne.

“If passed without loopholes or carve-outs, these laws will be an important step towards embedding greater fairness in the system, ensuring that the financial wellbeing of customers is truly prioritised,” he said.

At the same time, Consumer Action Law Centre chief executive, Gerard Brody said that no longer would insurers and their retailing partners be able to flog junk insurance through harmful unsolicited and add-on sales practices.

“The desire of large companies to continue cross-selling insurance to their marketing lists isn’t a basis for an exemption from these critical reforms,” Brody said.

“ASIC's new powers means the regulator will now have the power to ensure people who have been ripped off are effectively compensated, which is a long overdue and much-needed reform.”

“Reform of insurance regulation is long overdue. From shifting the onus back on to insurers to ask policyholders the right disclosure questions and limiting life insurers’ ability to avoid contracts, to regulating the sale of junk insurance products and ending the damage wrought by unsolicited selling, the time has come for the insurance sector to clean up its act,” Financial Rights chief executive, Karen Cox said.

“These reforms will protect people from having their retirement savings eaten away by ‘fees for no service’,” director of Super Consumers Australia, Xavier O’Halloran said.

“If passed, stronger laws will also empower ASIC and APRA to stamp out unfair behaviour by superannuation funds.”




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perhaps Choice should stick to reviewing TVs and Deodorant Products

Washing machines and vacuums are their specialty, unless you include the commission they derive from 'thebigswitch'. What was that? A commission?? surely not - Commissions are evil.

They still take commissions. I know their Partner ID with OFX which enables them to collect a commission on each and every future transaction a client transiting through their website and facebook page makes. Complete hypocrites.

There wasn't a Royal Commission into TVs and Deodorant Products. There was so much stink coming out of the Royal Commission into Banking and Finance that even Choice's recommended deodorant product would not have been able to work any magic.

BTW consumers buy services as well as products. It took a Royal Commission to show that Australian citizens were getting done through the trickery of banks and financial institutions, by the complicity of regulators of those banks and financial institutions, and by politicians in the pockets of those banks and financial institutions.

Don't hear any protests from Australian citizens (except seemingly from financial advisors) about Choice looking after their interests.

You dont hear it? Let people know Choice receives Commissions. I also believe Choice receives money from ASIC. Perhaps would not need these two particular sources of income if they simply charged a direct fee to those they deliver a service of any value.
How can Choice be relied upon if they receive Commissions?

I decided to check CHOICE as to whether it takes commissions. I didn't know and this is roughly what I found.

The majority of CHOICE's funds come from its members who also get access to product reviews. No funding is provided by ASIC or partner ID. In respect to BigSwitch, in 2008 CHOICE trialled an arrangement with One Big Switch in around 2008, but this did not involve any commissions. For a fee CHOICE lets companies display a 'CHOICE Recommended' logo on their products and in ads if that product performs well. Companies pay CHOICE to test their products to understand how to make it better, safer or fairer. CHOICE gets a fee for some click through on favoured products.

Member subscriptions are not commissions. Maybe fees might be thought of as commissions.

Disclosure: I am not a member or staff of CHOICE and don't pay any fees or commissions to CHOICE.

Well there you go. Choice is paid by the companies whose products they test. Could there possibly be a greater conflict of interest? Then they get referral fees for sending to consumers to the product floggers websites. Commission by another name? Thanks for exposing this rort Hedware. Choice should be ashamed. You know what they say about people in glass houses....

"The majority of CHOICE's funds come from its members who also get access to product reviews" = Ongoing fee clients who have access to advice. The Choice fee is not an annual fee that needs reauthorizing. If they don't get a product review for the year do they get their fee back?
"For a fee CHOICE lets companies display a 'CHOICE Recommended' logo on their products" = A product provider paying conflicted remuneration to be on an APL.
"Companies pay CHOICE to test their products" = shelf space fees.
"CHOICE gets a fee for some click through on favoured products" = Commission.
If choice change their subscription model to a set $ for each review that is downloaded and not an ongoing fee in perpetuity irrespective of if the member decides to 'access' a report or not AND buys the products they review AND allow any product they review (after buying it) to use the Choice recommended logo AND stop receiving commission for click through on products then i might listed to them. Until then it's do as i say not as i do.

If you get a fee for some click through on favoured products you are conflicted mate, you can't have it both ways.

Of course, you never hear a peep from the Union Super fund controlled "consumer lobby" about how all of this new regulation is making advice more expensive for consumers. These consumer lobbies are simply shrills for the Union Super movement, nothing more, nothing less.

Interesting. Have the for-profits made a peep?

They are getting out or moving to Intra Fund advice.

Boring.

You will discover "boring" when your intra-fund salary stops

So Super Consumers Australia , Xavier O'Halloran doesn't seem to mention that Intra Fund advice fees paid by every single member of an industry fund constitutes a fee for no service if members don't access the advice ?
Xavier wouldn't acknowledge that because the industry fund doesn't pay financial advisers, only their in house salaried staff.....so its all ok with Xavier ?
This is simply becoming completely unworkable and the playing field is completely unbalanced.

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