Scam nation: What’s going on with our most trusted companies?

Another day, another scam perpetrated by criminals that occupy the digital ether preying on Australia’s less vigilant or savvy consumers.

At least we all understand they are perpetrators. Perhaps more sinister or insidious are the disturbingly regular notifications from our regulators that businesses and brands that consumers trust and use to provide goods and services have been allegedly misleading them.

We don’t equate the big brands that sell us groceries, electricity, flights, white goods, electronics or insurance with dishonesty, but many of the household names have been caught in legal crosshairs with the Australian Competition and Consumer Commission, the Australian Securities and Investments Commission or their customers over the past year.

Australia’s largest insurer is the latest household brand to allegedly have misled customers.

The alleged shady behaviour of the likes of insurer QBE, the big supermarkets, Qantas or EnergyAustralia may not rise to the level of scam - but there is a common denominator: they are all accused of misleading their customers in one way or another.

The latest is ASIC’s legal action against QBE, which the corporate watchdog is now pursuing over allegations that some of the insurance giant’s customers have been misled about price discounts they thought they were getting on their premiums.

The message is to be beware of those generous discounts promised for not making a claim, or for loyally renewing your policy – they may not be as generous as advertised.

There is a common denominator: they are all accused of misleading their customers in one way or another.

ASIC said QBE promised discounts on premiums for a range of general insurance products, including home, contents and car insurance. But the regulator claims the insurer’s pricing model potentially eroded the discounts received by over half a million customers, in some cases to nil.

“Some customers were promised discounts for their loyalty when renewing their policies, which they didn’t receive,” ASIC deputy chair Sarah Court said.

Mind you, QBE, which self-reported the issue, is no Robinson Crusoe in the industry.

There’s a laundry list.

ASIC took action against Insurance Australia Ltd and Insurance Manufacturers of Australia (both owned by IAG) last year, alleging they misled customers about the loyalty discounts available for certain types of home insurance.

This follows the regulator’s action against IAL in October 2021, alleging it misled customers on loyalty discounts available for certain types of home insurance including NRMA-branded insurance. This resulted in a $40 million penalty.

Separately, ASIC also initiated proceedings against RACQ for pricing discount failures, which resulted in a $10 million penalty.

The regulator’s legal action against the nation’s largest insurer comes as the industry is still stinging from the negative optics around how flood victims were treated back in 2022.

Only last week, the public was reacquainted with insurers’ behaviour when a parliamentary committee whipped the sector for its treatment of policyholders devastated by floods across four states.

While the insurance industry’s alleged shortcomings are this week’s focus, it is the big two Australian supermarkets that have been in the government’s sights for most of the year for what legislators claim is price gouging.

The ACCC entered the supermarket fighting arena a few weeks back, accusing them of misleading customers with fake discounts. The competition watchdog and government pincers have inflicted enormous damage on Woolworths and Coles – once trusted companies that now rank among the five least-trusted brands in the country, according to a Roy Morgan survey.

In essence, the ACCC is claiming that supermarkets raised the prices on some items for a short period of time, then lowered them again and claimed the new price was a discount.

Coles barrister John Sheehan made his case in the Federal Court on Wednesday, saying that price increases “were brought about because almost in every case, possibly every case” suppliers requested a price increase “on account of an increase in the costs borne by the supplier in a period of a sudden outbreak of high inflation”.

Harvey Norman also became the subject of an unfavourable legal outcome last week when the Federal Court ruled that, alongside Latitude Finance Australia, it had engaged in misleading conduct and made false or misleading representations with a widespread 2020-2021 advertising campaign for a 60-month interest-free and no-deposit payment method.

ASIC was concerned the advertisements masked the fact consumers were required to take out a credit card, such as the Latitude GO Mastercard, to purchase goods.

Harvey Norman is also facing a class action from customers that handed the retailer hundreds of millions of dollars for allegedly worthless warranties.

In the energy industry, EnergyAustralia was fined $14 million last month by the Federal Court for misleading hundreds of thousands of consumers about electricity prices.

The energy retailer admitted to breaching consumer law and the Electricity Retail Code by not stating the lowest possible price, and misrepresenting what an average customer would expect to pay under its electricity offer in communications sent over roughly three months in mid-2022.

But the most eyebrow-raising offender of them all is Qantas, which reached a $120 million settlement with the ACCC after misleading customers by selling tickets on cancelled flights.

Amid all the corporate shenanigans, that one is hard to beat.

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