Strata, insurance payments on ACCC radar in 2020

The cost of insuring property in Northern Australia – battered by cyclones every year – has seemed an insurmountable problem since premiums jumped around eight years ago.

Householders and business complain they can’t afford to insure their properties while insurers say the risk of loss is high and they have to price for it. Some insurers have left the market, deliberately priced themselves out of it or stopped taking business when their exposure reaches a certain level.

The Australian Competition and Consumer Commission (ACCC) says insurance markets in northern Australia are characterised by “high prices, high costs and low profits”.

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Overseas student complaints increase

The Commonwealth Ombudsman has called for private education providers to be clearer on fees with international students who have pre-paid for courses.

The Ombudsman investigates complaints by international students against private providers and says the most common complaint is from students wanting pre-paid tuition fees refunded before they have finished their course.

“Students’ ability to seek this refund should be stated in their written agreement with the provider,” it says.

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Charitable donations in Australia

In the 2016-2017 tax year, Australians donated $3.5 billion to charity.

The actual figure will be higher because the figure above comes from tax returns lodged with the Australian Taxation Office (ATO). Not everyone lodges a tax return and many people make donations but don’t claim for them. There is also all the time donated by volunteers who work in op shops, environmental projects and sit on committees such as kindergarten and school councils.

The ATO notes that for those who did donate, and who it recorded, the average donation was $770.

“The most generous state was Western Australia, with 30% of residents claiming an average deduction of $1,190,” it says.

This is possibly because some very wealthy Western Australians donated large amounts.

The 2016-17 Tax Stats are available here.

Many brands, little choice in insurance

Four major insurers dominate the Australian general insurance market, which gives the appearance of choice with the offer of many brands, says the Productivity Commission in a report on competition in the financial system.

The four majors underwrite more than 30 brands while two of the smaller insurers underwrite 50 brands between them. One company underwrites 23 of 25 pet insurance brands.

In some areas of financial services, proliferation of products with slight variations in features has become a burden for providers as well as consumers, says the report.

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Should expense claims be scrapped in favour of a standard tax deduction?

About 75 per cent of Australians lodge their tax return via a tax agent, many unnecessarily, because the tax system is complex and difficult to understand, a parliamentary inquiry has heard.

The Tax Institute says individuals with straightforward affairs don’t need a tax agent but find the system hard to access and cannot sort misinformation from correct information so feel they need to pay for expert help.

The Institute applauds the ATO’s move to electronic communications but says it could be improved by the ATO pre-filling as much information as possible and more transparency in data collected.

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ACCC calls for a better deal for car buyers and repairers

Australian households spend 5 per cent of their annual income on their cars. That figure includes buying and maintenance, making a car the second most expensive purchase after a house.

Despite the cost, and the fact that many people need a car to work, the consumer legal protections for new car buyers can be difficult to enforce, and for consumers to understand, finds a report from the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog’s draft report into the new car retailing industry calls for regulation to ensure car manufacturers provide technical information to independent repairers.

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Life insurance comparison websites: what they don’t offer

Comparison websites provide the convenience of being able to compare different products online, and many of us would assume what we get is the same as buying a bespoke service. When it comes to life insurance we’d be wrong.

Research by Rice Warner has found the commissions that insurers pay to life insurance websites is the same as that paid to qualified financial advisers who spend time assessing the consumer’s needs to come up with a tailored offer of cover.

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Superannuation starting to replace age pension

retirees bike shutterstockMore Australians plan to live on their superannuation savings rather than the age pension.

When the Australian Bureau of Statistics surveyed 3.8 million workers on their plans for retirement, it found 53% of the group – all people aged over 45 years – expected their main source of retirement income to be super, an annuity or an allocated pension.

Only 19% of those who have actually retired tapped superannuation as their main source of income.

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Land banking scam exposed

shutterstock_196533755The Federal Government faces calls to regulate property investment advisors in the same way as financial advisors following an exposé of land banking scams.

Many Australians have invested in land developments that will prove to be worthless, having been enticed by high-pressure sales tactics and misled into thinking they are buying land that will soon jump in value.

The Senate Economic References Committee has called for tighter controls on property investment advisors, saying they should be regulated by the Corporations Act.

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Money for nothing

Consumer advocates have long been concerned that debt management firms charge people for services they can access for free.

Consumers suffering financial hardship are being charged a variety of fees by firms that promise to help restructure personal debt and offer no refund if they fail.

The fees are high and often opaque, according to an investigationDTS post it started by the Australian Securities and Regulation Commission (ASIC) following complaints by consumer advocates, banks, lawyers and ombudsmen schemes.

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