Insurance comparison websites are recording strong financial results but a corporate regulator has sent the industry an explicit warning: they are being watched.
Insurance comparison websites falsely claiming to compare most or all similar insurance products are on the Australian Competition and Consumer Commission (ACCC) hit-list, says ACCC Chairman Rod Sims.
The information displayed on them can on occasion mislead consumers in significant ways.
Although Sims says although aggregator sites promote competition and transparency, they will crack down on anyone who misleads insurance.
“The information displayed on them can on occasion mislead consumers in significant ways,” he says.
“We will be working with industry to improve standards around comparator websites, and will take enforcement action where appropriate.”
ASIC has previously taken action against a number of aggregator websites, forcing them to remove comparison tools that provided users with inaccurate information.
Choice Chief Executive Officer Alan Kirkland last week welcomed the move, decrying the practice of some comparison sites of only listing the products of companies who paid them.
“That’s the way they make money; they [usually] only list businesses that pay them and they often rank results on how much businesses are willing to pay rather than what’s the best option,” he says.
“This means they’re potentially misleading if they give consumers the impression that they provide a comprehensive comparison of the market.”