ASIC sues Choosi, says comparison site ‘misled thousands’
Australia’s corporate regulator is suing insurance comparison platform Choosi, claiming it misled prospective customers by only offering up products from one company, despite saying it compared policies “from a range of funeral and life insurers.”
The Australian Securities and Investments Commission (ASIC) filed Federal Court papers that allege Choosi made false or misleading representations to customers.
ASIC claims that, since July 2019, Choosi has only compared policies issued by a single insurer – Greenstone Financial Services, with “one limited exception”. Greenstone lists Choosi as a partner on its website.
ASIC claims in its filings the two companies are “associated” and that at least 4,225 funeral insurance policies, and 9,478 life insurance policies, were sold during this period through the website, and Choosi received $61 million in commissions. ASIC alleges Choosi made misleading claims on its website, across social media, and via television commercials and advertorials.
One of Choosi’s TV campaigns
Choosi’s website says customers can “compare the benefits and prices of a range of products from leading insurers” in order to “confidently choose cover that suits your needs, budget and lifestyle.”
ASIC deputy chair Sarah Court said ASIC alleges Choosi “misled thousands of consumers into thinking they were comparing options from a range of insurers”. The regulator will contend that “people were led to believe they were making a sensible decision by comparing policies; however, they were denied genuine choice,” Court adds.
Choosi.com.au
She continues: “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.
“Comparison websites must provide a meaningful comparison service and not simply operate as a sales channel or distribution platform for companies.”
ASIC alleges Choosi contravened two sections of the Australian Securities and Investments Commission Act 2001.
The maximum penalty for the charge for a single breach of either section is $16.5 million.
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