Comparison websites confusion sparks warning02 Sep 11 07:00AM EST |
Comparison websites have been given a warning to act in a fair and transparent manner after the ACCC launched legal action last Friday against EnergyWatch.com.au. The ACCC is alleging misleading or deceptive conduct and making false representations in its advertising. This marks a line in the sand that comparison sites of all types will surely be considering.
Part of the problem is that some online comparison sites are quick to highlight their comparative and money saving powers, but are not being transparent enough about their commission or payment arrangements. Some sites also operate as online brokers, which means they are selling products from a set number of providers for a commission. In the case of EnergyWatch, the ACCC has decided the company has not been clear enough about its arrangements.
According to an article on SmartCompany.com.au, Energy Watch is denying all allegations and claims it has always considered itself a broker (not a full market comparison service) and that its savings promises are accurate. Looking at one of Energy Watch’s latest ads (shown below), it is not greatly dissimilar to what major online comparison services using broker-style arrangements in other industries have been spruiking.
Comparison websites not operating under a broker arrangement should also pay attention to the recent action. If websites aren’t being transparent and are using tricks to funnel users into selecting products without clearly displaying relevant commission or financial information, it’s clear the ACCC is willing to step in.
We looked at three leading financial comparison websites earlier in the year (not the broker type), and found their full market comparison tools to be useful and time saving. However, we also pointed out that their summary tables (sometimes claiming to be top picks and best deals) missed key products. However, generally a disclaimer or other information was available to help inform users about the tables.
Online comparison services in their various forms do provide positives. They break down otherwise complicated industries with ballooning product numbers, save you money, and promote competition, which are all good things for consumers. However, whether it’s online brokers or other market comparison services, transparency is the key to the ongoing success of the online comparison industry.
Things to remember when using an online comparison website
- Make sure you compare any offers with other relevant products on the market.
- Consider if payment arrangements are affecting the information you receive. You might have to do some digging, but most sites put this information in the “about us”section of the site or in the terms and conditions.
- Understand that online broker-based comparison websites usually sell from a set number of providers, which does not necessarily represent the broader marker. You should be able to find which providers are being sold on the site, and don’t be afraid to get quotes elsewhere.
- Online comparison websites can save time and money, but it still pays to do your research before making a purchase decision.
Are you aware that some online comparison services don’t allow you to compare all the main products on the market? Does this influence whether or not you use them?
Be sure to check out last week’s blog featuring some money savings tips that can kick-start your bank balance before the silly season sets in.