Comparison website iSelect is being hauled to Federal Court by the consumer watchdog over allegations that it lied to or misled consumers about its energy plan comparison service.
According to the Australian Competition and Consumer Commission (ACCC), iSelect allegedly claimed consumers could compare all energy plans available from its partner retailers in a specific location and that iSelect would recommend the most competitive plan.
But the ACCC is alleging that iSelect did not compare all available plans. The watchdog is also alleging that the most competitive plan was not necessarily recommended, but rather iSelect limited the number of plans it compared based on arrangements it had with retailers and did not disclose this to consumers.
Some retailers with cheaper plans were not available on iSelect’s website, the ACCC accuses.
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“iSelect told consumers they would help them compare all energy plans available in their area from all their partner retailers,” said ACCC chair Rod Sims.
“But we claim they were actually favouring some partner retailers over others, such as those on its ‘Preferred Partner Program’ who were allowed to have more plans available on the iSelect website that excluded and targeted certain consumers. These preferred retailers paid iSelect higher commissions.”
In the 2017 financial year, more than 9 million Australians used the iSelect website to compare insurance, finance and utilities products.
“Particularly concerned” because iSelect is a comparison tool
Consumers use websites like iSelect precisely to find the best and cheapest deal for themselves in a complex marketplace, Sims pointed out.
“We were particularly concerned with the issues raised about iSelect’s claims because we know consumers go to comparison sites to get the best deal, and for an impartial and objective comparison of complex energy plans,” he said.
“We allege they were not getting that so they may be paying more for electricity than they should be.
“When comparison sites mislead consumers, it further adds confusion to the already complicated retail energy market, denying people an informed choice on what is often a major household expense.”
Free commercial comparison websites are often driven by business relationships with retailers that impact their recommendations – but this has to be “very clearly disclosed” so consumers can make informed decisions, according to Sims.
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