Comparison websites warned by ASIC

Comparison websites in the financial services sphere have attracted a fresh warning from the corporate regulator.

The Australian Securities and Investments Commission yesterday warned operators of insurance and credit comparison websites "of the need to ensure they comply with their obligations under consumer protection laws."

ASIC singled out operators of insurance websites rather than those that provide data on retail banking. The three prominent providers in this space are Mozo, Canstar and iSelect.

With the emergence of many white-label and affiliate sites in the sector, hundreds or even thousands of Australian websites may now carry financial comparisons.

ASIC said its concerns included:

• Listings that only compare a limited number of brands/products from a limited number of providers.

• A lack of clear explanation of the basis for ratings and rankings, and the selection of "special offers" and "featured products."

In relation to insurance-specific comparison websites, ASIC said:

• There was insufficient disclosure relating to website operators who were related to the issuer of the insurance brands.

• Comparisons were provided on the basis of price without any warning that different products might have different features and levels of coverage.

The business models of most comparison websites have converged over recent years as they seek revenue from banks and insurance companies for leads rather than from selling comparative product analysis to the industry.

Rohan Gamble, chief executive of Mozo, called the ASIC action "not unexpected."

"There's only a handful of us trying to do this responsibly," Gamble said. "We have big teams [of researchers]."

"[There are] a lot of affiliate sites. They run a series of ads thrown together to look like a table."

One business supporting many affiliates' sites is dgm, a subsidiary of the ASX-listed Digital Performance Group.

Chris Meehan, chief executive of the Digital Performance Group, said yesterday that his firm held a financial services licence but that its affiliates - such as Credit World - needed their own licences and were responsible for their own content.