Compare the Market fined for false advertising

Compare the Market fined for false claims that it, well, compares the market
 
Learn more
 
 
 
 
 

01.Compare (some of) the market

meerkat

Comparison website Compare the Market, infamous for its meerkat salesman, has been fined $10,200 by the ACCC for false claims in its advertising that it "compare[s] more health funds than anywhere else". 

Between March and May this year, Compare the Market filled household letterboxes in Queensland, New South Wales and Victoria with pamphlets stating "we now compare more health funds than any other website in Australia". It also made similar false claims on its website and in television infomercials.

In fact, Compare the Market compares a third of the private health insurance funds in the market, with 12 out of a possible 36 health funds listed on its website. The ACCC found there are two other websites that compare more policies, including the government-operated privatehealth.gov.au, which compares over 35,000 policies from all health funds.

Insurance comparison crackdown

In announcing the fine, ACCC commissioner Sarah Court said comparison websites "are a current ACCC priority area as it is critical that consumers are able to make informed purchasing decisions".

"The infringement notice was issued in relation to the letterbox pamphlet as the ACCC had reasonable grounds to believe that Compare The Market had made a false or misleading representation about the performance characteristics or benefits of its health insurance comparison service, in contravention of the Australian Consumer Law."

It's not the first time health insurance comparison websites have found themselves in hot water with the ACCC. A CHOICE investigation found Compare the Market's competitor iSelect was forced into a court-enforceable undertaking by the ACCC in 2007 to cease claiming that it compares all insurance policies. Then in 2011, iSelect again gave a court enforceable undertaking, this time as part of a court-ordered mediation with BUPA, to stop claiming that it compares "most" or a "wide range" of health insurance products. iSelect has only nine health finds listed on its website for comparison.

Compare the Market owned by insurer

The Australian Securities and Investment Commission (ASIC) also launched a crackdown on insurance comparison sites in 2012 when it found some sites:

  • compared on the basis of price without regard to features, and
  • had insufficient disclosure of relationships to insurance brands they are comparing.

The CHOICE investigation found Compare the Market compares several of its sister organisation insurance brands on its website. Compare the market is owned by Budget Holdings Limited (BHL) who in turn owns insurance giant Auto and General encompassing car insurer Budget Direct. And Budget Direct, along with several other Auto and General insurance brands are listed on the Compare the Market website.

How does CHOICE compare insurance?

CHOICE obtains an extract of the data used on the privatehealth.gov.au website and analyses over 35,000 health insurance policies, assigning them a percentage score based on how well the policies compare against their competitors. We publish only the best private health insurance policies, those that have been designated CHOICE Buys, so CHOICE members can compare the features of these policies online.

CHOICE is completely independent and not owned or affiliated with any of the insurers we review in our comprehensive analyses of policies. We're a not-for-profit organisation funded by our members, and don't receive commissions or fees for advertising.

 
 

 

Sign up to our free
e-Newsletter

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

 
Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments