Today’s announcement by ASIC proves that all insurance comparison websites are not the same.
ASIC is taking Choosi to court alleging it made false or misleading statements regarding the insurers it compared. The statements were made on its website, on social media and via TV commercials and advertorials.
ASIC alleges that Choosi has consistently claimed from at least 1st July 2019 that it compares “a range of insurers” when in the majority of cases only products from a single insurer were being compared.
On its website Choosi currently “compares” four Life insurance products: Real Life Insurance, Australian Seniors Life Insurance, Guardian Life Insurance and Kogan Life Insurance. However all of these policies are issued by the same life insurance company, Hannover Life Re, and are distributed by Greenstone Financial Services Pty Ltd, a company associated with Choosi.
“We allege Choosi misled thousands of consumers into thinking they were comparing options from a range of insurers” said Sarah Court, ASIC 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.”
Over the five year period, more than 14,000 Life and Funeral insurance policies were issued and Choosi received around $61 million in commissions.
In announcing the court action ASIC acknowledged that comparison websites could be useful in helping consumers to compare products. However “they must not simply operate as a sales channel or distribution platform for companies”. ASIC has indicated that where misrepresentations are made they will take action and penalties can be applied.
Insurance Watch has for many years sought to expose the pitfalls of buying the direct life insurance products heavily promoted by Choosi and others – these include exorbitant pricing (up to 3 times more than elsewhere), pushy salespeople and substandard policy terms.
Insurance Watch compares 9 insurance brands from 7 different life insurance companies. Consumers are able to research their options and obtain quotes online, without having to provide their telephone number and contend with call centre operators.