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Medibank, AMP Super, pet insurance: Three products Australians shouldn’t buy

Lucy Dean
Are you getting a raw deal? Images: Getty
Are you getting a raw deal? Images: Getty

Pet insurance, Kogan, Medibank and AMP Superannuation have all been slammed as “the worst-of-the-worst” in CHOICE’s latest Shonky Awards.

CHOICE also identified the IKEA Nedkyld Fridge and Freedom Foods XO Crunch as dodgy products.

But in a year defined by the Banking Royal Commission, financial products, and examples of poor consumer care made up the majority of CHOICE’s least-favourite products.

“CHOICE’s job is to stand up against companies doing the wrong thing. The SHONKYS draw upon our unique testing, reviews and advocacy to help you identify the worst-of-the-worst. In a time of fake reviews, cash for comment, salespeople and lobbyists everywhere, it’s more important than ever for independent voices to tell the truth,” CHOICE CEO Alan Kirkland said.

“This year highlights businesses and industries who have ripped off, misled and treated Australians like cash cows to be exploited. Following the Banking Royal Commission, it’s no surprise that financial services businesses are such a feature of this years’ SHONKYS.”

Medibank ‘Basic’ Cover Health Insurance

CHOICE described this product as “failing at the ‘basics’” with the basic cover more expensive than the cheapest Bronze level cover in NSW, ACT, NT, SA, WA and Tasmania.

“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,” Kirkland said.

“A new system that was meant to make things simpler has turned into a mess thanks to rip-offs like those from Medibank. Medibank’s “Basic” junk cover costs more than many higher cover Bronze policies.”

He said Medibank was simply trading on the brand, but not offering a solid policy.

And, he warned, commercial comparison sites are pushing Australians to the insurers that pay the highest commissions.

“Medibank deserves a SHONKY for failing at the basics - simple and affordable health insurance. We also encourage Australians to escape the industry marketing and go to to see if they even need these junk policies at all.”

AMP Superannuation

AMP Superannuation was also blasted as having “ruined retirements”, holding the highest number of “zombie accounts”.

These are inactive superannuation accounts that are still being charged fees and insurance.

“For AMP, it’s money for doing nothing. 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 have failed this standard,” Kirkland said.

“Since the Banking Royal Commission, we have seen the lobbyists swoop into Canberra and try to water down much-needed change. The examples highlighted by these SHONKY awards demonstrate that the Parliament still has plenty of work to do to clean up the finance sector.”

CHOICE also pointed to AMP’s fees-for-no-service scandal, which was at one point estimated to cost $1 billion in remediation.

And CHOICE noted that all AMP-branded MySuper products have performed below average over the last five years.

Pet insurance

Of the 86 pet insurance policies reviewed by CHOICE, zero were recommended.

CHOICE said this is because the entire sector is just “bad insurance riddled with exclusions”.

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

“There was not a single policy that we could in good conscience suggest that pet owners consider buying. This also highlights why insurance companies shouldn’t be exempt from laws against unfair contract terms - it’s vital this special loophole for insurers gets closed.”

He said while most Australian contracts include ‘unfair contract terms’ protecting consumers from being ripped off, insurance providers aren’t covered under this law.

Additionally, Australians run the risk of getting stuck in increasingly expensive pet insurance contracts because of ‘pre-existing conditions’ clauses, meaning that as your pet gets older it’s almost impossible to change insurers while receiving the same coverage.


Kirkland said Kogan exhibited “dodgy customer care”, having received over 300 complaints to NSW Fair Trading in the first six months of the year alone.

“Kogan is a serial offender when it comes to consumer rights - from January to July this year it has topped the New South Wales complaint register with over 300 complaints,” Kirkland said.

“Kogan needs to improve its customer service and stop beating around the bush when its products are defective. Kogan must simplify the process for refunds, repairs and replacements to meet community expectations and the law.”

According to CHOICE, Kogan appears to make refunds harder than they should be. In one case study, a customer who received a faulty tablet had difficulty finding a customer care contact, who ultimately declined to refund the price, offering only a credit in breach of Australian Consumer Law.

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