Choosi Sued for Allegedly Misleading Customers

ASIC is suing insurance comparison provider Choosi Pty Ltd for allegedly misleading prospective customers through its funeral and life insurance comparison services, and claims it has breached the Australian Securities and Investments Commission Act 2001.

In proceedings filed in the Federal Court, ASIC alleges Choosi made false or misleading representations to customers by claiming it compared products from a range of funeral and life insurers.

However, ASIC claims the firm – from at least 1 July 2019 and ongoing – only compared policies issued by a single insurer (with one limited exception).

ASIC alleges that at least 4,225 funeral insurance policies and 9,478 life insurance policies were sold during this period, with Choosi receiving $61m in commissions. It claims all policies were distributed by Greenstone Financial Services Pty Ltd, a company ASIC says is associated with Choosi.

ASIC Deputy Chair Sarah Court said the organisation was taking action to stop companies taking advantage of consumers trying to shop around for the best deals.

“We allege Choosi misled thousands of consumers into thinking they were comparing options from a range of insurers,” she said. “We will contend people were led to believe they were making a sensible decision by comparing policies. However, they were denied genuine choice.

“Comparison websites must provide a meaningful comparison service and not simply operate as a sales channel or distribution platform for companies.”

ASIC alleges Choosi made misleading representations on its website, across social media, and via television commercials and advertorials.

The maximum penalty that can be ordered for a single contravention of the relevant sections of the act is $16.5 million.

In a statement, a spokesperson for Greenstone Financial Services said the firm is aware of concerns raised by ASIC.

“Choosi is currently reviewing the allegations and will take all the necessary steps, and will respond accordingly,” said the spokesperson.

“Our customers are at the heart of what we do. We are committed to making any necessary changes that best serves our customers.”