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Consumer New Zealand has long had a reputation as the guardian of the New Zealand consumer. Active since 1959, they claim they are “dedicated to getting New Zealanders a better deal.” And their biggest pitch has always been their independence. When Critic spoke to David Naulls, Deputy CEO and Content Editor of Consumer, he said independence was a “vital” aspect of the company. “We’ve been independent for the last 55 years, we take no advertising for instance, and we don’t accept corporate donations at all so we are beholden to no one in terms of the products we test and results we get.” The same statements are used liberally throughout their advertisements, with one reading, “We're so independent, even our ad isn't attached to this magazine." Yet in the past decade Consumer has changed face in many ways. The introduction of new schemes has bridged the gap between themselves and the companies they test. It could be said that due to this, their independence is compromised. Critic investigated programmes introduced in the past few years, analysing the effect they have on businesses, as well as consumers around New Zealand.

In 2009 Consumer introduced their Consumer Recommends Endorsement Programme: staff at Consumer test a product and, if the product is found to meet their expectations, it is granted “Consumer Recommends Status.” Much like the use of the Heart Foundation Tick, a company cannot advertise the Consumer Recommends brand mark on their product simply because this status was reached. In order to use the Consumer Recommends brand mark on the product, businesses have to pay Consumer a $5,000 fee. Licenses to use the brand mark for non-financial products or services are valid for six months and licenses for financial products or services are valid for three. Once the license expires, the product can then be retested to ensure it still meets the required standard. If this is the case, the businesses will be charged another $5,000 license fee to continue use of the brand mark for the next three to six months. When questioned on the need to continuously charge businesses for this, Naulls said, “[the fee] was a way of protecting our brand; lots of firms or businesses would quite often advertise our test results and we would have very little control over that or not even know it was happening.” He said the reason the fee was introduced with the programme was so that “[Consumer] could control more of what was happening about the publication of our results more widely.”

Consumer's entire purpose is advertised as delivering members the most accurate information when it comes to products and services. On their website, under the heading “Why was the Consumer Recommends Programme Developed?” it states, “The endorsement programme was launched to recognise excellence and to provide consumers with 'at a glance' information on products and services that have been awarded Consumer Recommends status.” That is a difficult claim to support when it comes to the finer details. Consumers aren’t getting “at a glance” information on products that have passed Consumer's tests, but instead the businesses that have paid Consumer the license fee and passed the test. A product can meet Consumer requirements, but there is no “at a glance” recognition of this unless a business fronts up with $5,000 every three to six months to use the logo. It could be said that the programme doesn’t necessarily “recognise excellence,” it recognises payment.

Critic gave Naulls the following scenario: “Say you test two businesses with a high quality product and they both pass the test, but one is a small, Kiwi businesses who can’t really afford to pay for continuous use of the logo, do you think they will lose out customer-wise?” To which he replied, “Well, possibly, but we think that there would be few business that would be so small that they couldn’t afford the license fee.” This was rather interesting considering that the businesses that currently hold the license are large organisations including Panasonic, Dettol, Persil, Goldair, Breville and Sunbeam.

In regards to what the license fee goes towards, Consumer claims, “all revenue from the Consumer Recommends Endorsement Programme is used to increase the scope of product testing, advocacy and investigative work.” Naulls had a similar justification: “it’s partly to bring in some extra money for the testing programme, so it helps fund the programme.” This seems to contradict the idea that they are an independent body that are not reliant in some way on the funding of businesses. According to their website, there are currently 16 businesses who all together hold 26 temporary licenses to use the Consumer Recommends Brand Mark. Taking into account the cost of a license, Consumer would have received at least $130,000 in 2014 from private companies. According to their 2013 Financial Report, 40 such licenses were granted in 2013 generating revenue of $200,000.

Earlier in 2014 Consumer also introduced their Consumer Trusted Accreditation Scheme. At the time Critic went to print, accredited businesses were 2Degrees Mobile, Inspire Net Ltd, Power Shop Ltd, and Shoe Clinic. These companies are listed both on the Consumer website, as well as in the magazine. Much like the other, this programme is promoted as “an initiative designed to advance the interests of New Zealand consumers.” The Consumer website states, “By accrediting businesses committed to delivering exceptional and fair customer experiences beyond consumer law requirements, we are providing consumers with confidence and leading the way in raising the standards of retail and service providers.”

The quality of a business is measured by the following eight principles: exceptional customer service; fair returns and refund policies; fair handling of customer complaints and a dispute resolution process; fair contracts; clear pricing; integrity of privacy and data policy; accurate advertising; and access to a customer-friendly website. If a business meets these criteria, they can be listed as one of Consumer’s accredited businesses. At a price, that is.

Based on their annual turnover, businesses will be charged up to $25,000 per year to be accredited, even though they have already been proven to meet the criteria. Naull told Critic their philosophy is “ultimately to protect the interests of New Zealand consumers and our members.” In order to stand by this, it would be assumed that Consumer would make their members aware of all business that met the credentials.

Accredited businesses also have the opportunity to offer special deals to Silver and Gold members of Consumer. Currently, deals offered include 10 per cent off a monthly plan with 2Degrees, and $100 off your first 12 months when switching to Powershop. Conditions of the Accreditation Scheme state: “Businesses also pay a rebate fee on deals offered to members.” This fee is agreed between Consumer and the business.

On that subject, Consumer currently has three different membership types: Gold, which costs $99.95 per year; Silver, which costs $9.95 per month; and Bronze, which is free. In regards to why the memberships cost, Consumer states, “While we do have other sources of funding including sales of Consumer magazine, government project work, the Consumer Recommends Endorsement Programme, and the Consumer Trusted Accreditation Programme, our work is financed in the most part from Consumer membership fees.” Understandably, the features members have access to within Consumer are based on what you pay. The only aspect that seemed alarming when it came to this concept was in regard to Consumer’s Advisory Service. The website states: “The Consumer Advisory Service is available to all our Gold and Silver members for any Consumer-related issue and Bronze members for an issue or complaint about a Consumer Trusted business.”

Critic questioned Naulls on the following issue: “If a Bronze member had a consumer-related issue, but could not use the service, wouldn’t you say this affects the whole idea of judging businesses fairly?” To which he replied, “Actually, yeah, that’s one I hadn’t really thought about too much … What we’ve done there is if your complaint is with a Consumer Trusted Business, then if you’re a Bronze member our advisory service will advise you about it and possibly assist as well. For complaints against other types of business which aren’t part of the Consumer Trusted Programme … that’s only available to our Gold and Silver members.” Naulls said this has been the case for the past 25 years.

When it came to the independence of Consumer, there was not any great issue in a financial sense. Financial reports show that the majority of funding still comes from membership fees, meaning Consumer is not heavily reliant on corporations in that respect. In 2013, 83 per cent of the revenue, an amount of $5,091,670, was made through membership fees. Interest income accounted for four per cent of revenue. 13 per cent included revenue from business development, website maintenance, endorsements, newsstands, single report sales, and foreign exchange gain/loss. Consumer also occasionally received grants from their charity, the Consumer Foundation. In 2008 $17,000 was received, in 2009 $11,500, and $10,000 in 2012. Mark Hughson, Consumer’s Financial Controller, said Consumer New Zealand is also requesting a grant application for 2014.

It is clear that the way in which businesses are promoted through Consumer has seen a drastic shift. Naulls told Critic that although businesses pay for certain aspects, they do not affect the research process – “results are results, nothing changes that.” This is all well and good, aside from the fact that the way those results are promoted through Consumer relies on the willingness and ability of companies to cough up the cash.