Regulator Sues Product Comparison Site Alleged To Only Compare Products On Which It Earned Commission

Australia’s Securities & Investments Commission has sued a product comparison website that it alleges only considered products from a related company.

The regulator (ASIC) on Tuesday filed a claim [PDF] against an outfit called Choosi Pty Ltd that claims to operate a “team of Choosers” who “help you compare the benefits and prices of a range of products from leading insurers so you can confidently choose cover that suits your needs, budget and lifestyle.”

ASIC is not so sure the Choosers were very choosy.

“Choosi made false or misleading representations to, and engaged in conduct that was liable to mislead, prospective funeral and life insurance customers by making statements that conveyed that Choosi compared funeral and life insurance policies from a range of insurers,” states ASIC’s filing.

“In reality, the Comparison Service was a distribution platform for funeral and life insurance policies issued by Hannover Life Re of Australasia Ltd (Hannover), from whom Choosi received substantial sales commissions,” the filing claims. Furthermore: “The only funeral policies that consumers could compare through Choosi’s Comparison Service were policies issued by Hannover.”

ASIC alleges the policies were all distributed by an outfit called Greenstone Financial Services Pty Ltd, which it described as “a company associated with Choosi.”

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Choosi’s comparison service for life insurance was a little better: It compared one policy from another insurer.

The Register sought comment from Choosi but had not received a response at the time of writing. We will update this story if we receive substantive comment.

ASIC Deputy Chair Sarah Court isn’t happy.

“Comparison websites must provide a meaningful comparison service and not simply operate as a sales channel or distribution platform for companies,” she is quoted as saying in a canned statement.

“‘Consumers may have been encouraged to buy a funeral or life insurance policy when a cheaper or more suitable policy might have been available from other insurers that were not assessed,” she added, and urged consumers to choose multiple sources of info when considering purchases. ®