Why you can’t trust comparison websites



True or false. Comparison websites give consumers independent, honest and trustworthy advice about complex products like insurance, credit cards and loans.

If you answered true, you were wrong. But it’s not your fault. That’s exactly what many say on the box. The fine print shows that the less scrupulous operators are serving their own interests, not always those of the consumers who have turned to them for advice.

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This situation has not escaped the attention of regulators, which are monitoring conflicts of interest in comparison websites amid concerns that some are little more than artful marketing devices for flogging their own products.


Sergei the meerkat.

Which brings us to Sergei. That’s him on the right.

Since 2013, Sergei the Russian meerkat has told Australian consumers in television ads to go to to shop for car and home insurance.

In heavy Muscovite drawls, Sergei and his meerkat mates say it is “simples” to find the cheapest insurance.

But there’s plenty that the Russian meerkats don’t tell us.

Who is

The website is owned by a leading global insurer that markets many of its own its products on the site.

While offers a broad range of products for life insurance and travel cover, most of its general insurance offerings are underwritten by an insurer known as Auto & General.

Auto & General is a subsidiary of global financial services group Budget Holdings Limited and is the ultimate owner of

An investigation by The New Daily of the brands marketed by the website for auto and home insurance reveals a disproportionate weighting to A&G products.

In the car insurance category, seven of the 10 products offered on the site are underwritten by A&G. For home and contents cover, three of the five offerings on the site are underwritten by A&G.

Rather than serving as a balanced resource for consumers, it appears that operates as a marketing tool for in-house insurance policies.

CHOICE’s director of campaigns Matt Levey said comparison sites should disclose any relationship they have to product providers.

“This is especially important when they are making claims to comprehensively cover the market, and give consumers the impression they are seeing a wide range of comparisons,” he said.

“It’s about being transparent and up front.”

Comparing apples and oranges

Are you comparing like with like?

Conflict of interest

George Meligonis, the Managing Director of Compare The Market Pty Ltd, insists that conflicts of interest were properly managed to ensure that the products owned by his business were not favoured over offerings of other insurers.

Mr Meligonis blames Australia’s highly concentrated general insurance industry for the narrow product range.

Suncorp and Insurance Australia Group account for more than 60 per cent of all car policies sold in Australia and Mr Meligonis says the duopoly has refused invitations to list their products.

“The duopoly has been unwilling to participate in comparison websites,” he said. “We’re pushing hard and we engage with the big insurers every six months to get them on board. I think we are making headway.”

Aggressive marketing push

Despite its conflicts of interest, is trying to establish a foothold in Australia through an aggressive brand-building campaign based around the wise-cracking meerkats.

According to the company’s 2014 financial accounts, $13 million was spent on television and other marketing campaigns last year.

Mr Meligonis said the marketing push would continue in 2015. However, the big spend on spin can’t hide the fact that the website does not yet live up to its name.

With big car insurance brands such as NRMA, AAMI, RACV and RACQ missing from the site, consumers are literally unable to “compare the market”.

Regulatory problems


Shop around to find the best deal for you. Photo: Shutterstock

In August, the Australian Competition and Consumer Commission issued an infringement notice against the website, after an investigation found it had misled consumers in promoting its comparative health insurance service.

Compare The Market Pty Ltd claimed in marketing literature and television advertisements that it offered the largest range of private health insurance products in Australia.

The regulator found there were at least two other sites that offered a greater selection of health insurance products. The company was forced to pay a fine of $10,200 and to withdraw the advertising material containing the misleading claims.

ACCC crackdown

ACCC deputy chair Delia Rickard declined to comment on whether was the focus of other investigations being conducted by the regulator.

However, she told The New Daily that the regulator was investigating comparison sites in the energy and private health insurance markets.

“We are looking at whether sites have provided clear advice to consumers about the commercial arrangements they’ve got in place with product providers and on issues relating to disclosure of conflicts of interest,” Ms Rickard said.

She said comparative websites were important for helping consumers to test the value of products and services, but only if the information they provided was reliable.

“Most consumers stick with the same provider for twenty years or more because it often just gets too hard to work out which products provide the best value,” Ms Rickard said.

“There’s clearly value for consumers if they can find accurate and trustworthy sites.”

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