The Australian Securities and Investments Commission (ASIC) is suing insurance comparison provider Choosi for allegedly misleading customers through its funeral and life insurance comparison services.
In a media release, ASIC alleges that for more than 4,200 funeral and 9,400 life insurance policies, apart from a limited exception, Choosi only compared policies issued by a single insurer.
According to a statement filed in the Federal Court, “…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 release said the commissions amounted to $61 million. ASIC said all the coverages were distributed by a company associated with Choosi called Greenstone Financial Services.
“We allege Choosi misled thousands of consumers into thinking they were comparing options from a range of insurers,” said Sarah Court (main picture), ASIC’s deputy chair. “We will contend people were led to believe they were making a sensible decision by comparing policies; however, they were denied genuine choice.”
The regulator alleges Choosi made the misleading representations on its website, across social media and in television commercials and advertorials.
Court said comparison websites must provide a meaningful comparison service and not simply operate as a sales channel or distribution platform.
ASIC’s action follows other recent consumer-focused actions including against Hollard Insurance. The release said the maximum penalty for this alleged offense is $16.5 million.
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