The corporate watchdog has issued a warning after launching multiple court actions against websites for allegedly misleading consumers about the range of financial services and products on offer and, in some cases, promoting multiple leads from a single brand.
While comparison websites are a good place to start for prices and services information, consumers should conduct deeper research, Australian Securities and Investments Commission (ASIC) commissioner Alan Kirkland said.
"The products that are listed by many comparison sites are selected and ordered based on what the product providers pay to the comparison sites, and they may not give you a full view of the market," Mr Kirkland told AAP.
"It's important to actually use a range of comparison sites in order to get a fuller view of the market."
The Federal Court recently found comparison site Choosi - which offers life, funeral, income protection and health insurance products - misled consumers over four years from mid-2019 after claiming to compare a slew of funeral and life insurance policies, when Hanover Life Re issued all but one of the policies offered.
Every single policy in question was distributed by Greenstone Financial Services, a company linked with Choosi.
The court has not set a date to hand down Choosi's penalty, but an administrative hearing will be held later on Tuesday.
The watchdog launched a case on Friday against lead-generating business Clark Family Pty Ltd, which offers free online assessments for loans and insurance products.
The commission alleges up to 70 of its websites misled consumers by claiming to compare rates and options from multiple providers and providing consumers "tailored" recommendations.
"In reality, consumers' inquiries were (allegedly) sold to the highest-bidding broker," Mr Kirkland said.
With Australians already struggling with cost-of-living pressures and stubborn inflation, the court actions are a warning shot across the bow to the price comparison platform market.
"We've got very strong laws in Australia against making false or misleading representations about the products that you provide to consumers," Mr Kirkland said.
"And where we find comparison sites misleading consumers, we will take action."
Consumers must also be alert to service agreements to ensure they don't sign away their private data with a click.
"Your information may not be used solely for the purpose of the comparison that you're seeking," Mr Kirkland said.
"Your personal details may be sold to another business, and you may then find yourself the subject of telemarketing calls or marketing emails as a result of your information being sold on."
* Find information on how to navigate comparison sites at https://moneysmart.gov.au.
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