It pays firms to confuse us - and they do it very well
CONSUMER confusion is rife and it suits companies to keep it that way. The more complicated goods and services are, the more likely it is that consumers will make costly mistakes by failing to get the best value.
This explains why up to four out of five consumers who have health insurance are on the wrong plan.
Independent broker Dermot Goode of TotalHealthCover.ie says that some 80pc of those with health cover are on a plan that is too expensive, or does not give them the benefits they need.
Those who are on the same health plan for two years or more are usually overpaying by the greatest extent.
Consumer confusion is also at work when it comes to bills.
Half of consumers find it difficult to check their electricity and broadband bills for accuracy, while larger numbers struggle to understand gas bills.
The research (from price comparison site Switcher.ie) shows that most people feel they have no choice but to trust their supplier to get the bill right.
However, one in four people claim to have been overcharged on at least one household bill in the last year.
For those that claimed to have been overcharged last year, the average amount was €54 for electricity, €36 for broadband and €30 for mobile phone services.
All of this chimes with academic research carried out by the Economic and Social Research Institute (ESRI) which found that once consumers have to take into account more than two or three factors at the same time, they struggle to spot good deals and often make mistakes.
Companies know this and are only too keen to exploit it.
That is why there are more than 400 different mobile phone plans, and a similar number of health insurance schemes.
According to the ESRI study, consumers may make costly mistakes. When it comes to financial services, utilities, and telecoms, consumers struggle to choose the best products for themselves, the ESRI said.
The report examines the potential implications of the results for consumer protection, stating that consumers can benefit if product ranges and descriptions are kept simple.
This means there is a huge role for regulators in forcing companies to stop conning us by complicating their offers.
But don't hold your breath for that. We have weak consumer regulation in this country.
Your best bet is to use an independent price comparison site like Bonkers.ie or Switcher.ie.
The alternative is confusion, over-paying and poor service.
Sunday Indo Business