The Australian Securities and Investments Commission (ASIC) is set to sue insurance comparison provider Choosi for allegedly misleading customers.
ASIC filed the proceeding to federal court, outlining claims that Choosi misled Australians by claiming to compare a range of funeral and life insurers.
The Commission alleges that from mid-July 2019, Choosi has only compared policies issued by a single insurer, with one exception. This is despite claims to “compare the benefits and prices of a range of products from leading insurers”.
The case alleges that while multiple life and funeral insurance products on the comparison website have different branding, they are actually all issued by Hannover. All policies were distributed by Greenstone Financial Services, a company associated with Choosi.
ASIC alleges that a minimum of 4,225 funeral insurance policies and 9,478 life insurance policies were sold during this period, with Choosi receiving $61 million in commissions.
The Commission's Deputy Chair Sarah Court said ASIC was taking action as consumers were “denied a genuine choice".
"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", Court said.
"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.
