Top shonks get gong for bad business
The 2014 Shonky Awards for poor corporate practice have been handed-out, shining a light on shonkiness in industries from biscuits to banking.
Commonwealth Bank, Bankwest, Arnott's, Amazon Kindle, Kmart, Thermomix, Coles and S-26 Gold were all called-out for their dodgy behaviour in the satirical prize night put on by consumer group Choice.
Commonwealth Bank (CBA) received its Giant Lemon (the prize in the Shonkys) for presiding over one of Australia’s worst financial planning failures, which ripped millions of dollars from thousands of clients over almost a decade.
According to a senate inquiry into the matter, CBA’s financial planners orchestrated a “calculated deceit”, deliberately putting clients into risky and inappropriate investments to meet bonus goals.
The inquiry actually recommended a Royal Commission be established to deal with the matter.
Even worse, Choice claims, the bank’s compensation offer is potentially insufficient.
Baby formula company S-26 Gold got its Lemon for ‘Toddler and ‘Junior’ formulas that it proclaimed provides "nutritional support for young kids”.
Choice says this was a cynical plot keep parent buying baby formula long after it is necessary.
“Health professionals advise that toddler and junior milks aren't needed for healthy kids over the age of one... it's suggested the focus should be on increasing solids and developing better eating habits,” the consumer advocates say.
In marketing the S-26 Gold Toddler and Junior powdered milk to retailers, reports say an industry trade magazine ran comment from S-26 encouraging suppliers to: “Keep mums buying with our extended range of nutritious milk drinks”.
Arnott’s was slammed for the lack of peanut butter in its peanut butter flavoured Tim Tams, which also came in a packet of the same size and price as a regular packet but with two fewer biscuits inside.
Bankwest got a Giant Lemon for its Kids' Bonus Saver which appeared to have a decent 5.75 per cent interest rate. But that 5.75 per cent rate was a teaser, valid for 12 months only, at which point Bankwest moves all but $1 into a low-interest account paying just one per cent for amounts below $3000.
The bank claims it is positive for kids, as “they can start their savings all over again”.
But Bankwest has been quick to punish young savers if they dare to make withdrawals, dropping the interest to a mere 0.01% in that month, and there is a $25 minimum monthly deposit as well.
Amazon’s Kindle department had its creative mathematics called-out. The company has been running ads comparing the battery life of its Kindle Paperwhite against a laptop (which Kindle says would last about nine hours), tablet (five to 10 hours) and smartphone (four to 13 hours, Amazon says).
Compared to a few hours, Amazon says the Kindle lasts eight weeks. But it turns out that the numbers for the battery life of other devices assumed continual use, while the stats for the Kindle assumed half an hour of use per day. The Kindle’s actual battery life is 28 hours.
Receiving the highest number of public nominations in Shonkys history, the all-in-one mixers made by Thermomix clearly angered many consumers.
Thermomix was found to have been selling a circa-$2000 mixer right up to the day before its new, similarly priced, model was released.
Consumers reported asking about the rumoured new model when they were buying their older version, and were assured there was no upgrade on the horizon.
Thermomix Australia offered various sweeteners to those who had bought the old model in the month before the new one came out, but many mixing fans still lost hundreds of dollars off the value of their machines.