The Australian Securities and Investments Commission (ASIC) has drawn concerns over insurance and credit comparison websites which feature a limited number of brands or products, as the industry sees a spark in the practice.
The corporate watchdog has warned insurance and credit comparison website operators that they must comply with consumer protection law to ensure they are not misleading consumers.
"ASIC recognises that consumers can benefit from the increasing opportunities to research and compare financial products online," ASIC commissioner Peter Kell said.
"For this to occur, operators of comparison websites must take care to ensure they accurately portray the features and limitations of the products compared. They also need to ensure that any information they provide, including quotes, is reliable, accurate and up-to-date."
ASIC have said that comparison websites only featuring certain brands or products may not clearly disclose this information; creating the impression the comparison is broader than it is.
They have also found concern with websites that use 'ratings' or 'special offers' without explanation of the basis of this selection.
When looking at insurance-specific comparison websites, the corporate watchdog found some compared products on the basis of price, without indicating they may include different features or levels of coverage.
ASIC also found many website operators were not licensed or authorised to provide financial service advice. As websites that allow consumers to compare quotes are providing financial services, the operators must be licensed, or be authorised representatives of a licensee.
"We will be targeting this area of the market and we will take regulatory action where necessary to ensure operators of financial product comparison websites comply with the law," Mr Kell said.
