iSelect’s $8.5 Million Fine

iSelect’s $8.5 Million Fine

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The Federal Court of Australia has ordered that iSelect pay $8.5 million in penalties for making false or misleading representations about its electricity comparison services.

iSelect Limited admitted that between November 2006 and December 2018 it misled consumers by representing that it would compare all electricity plans offered by its partners and recommend the most suitable or competitive plan when this was not the case.

The commercial agreements that iSelect Limited had in place with its partner electricity retailers restricted the number of electricity plans those retailers could upload onto the comparator system, and therefore the plans recommended to consumers were not necessarily the most suitable or competitive.

“iSelect was not upfront with consumers that it wasn’t comparing all plans offered by its partner retailers. In fact, about 38 per cent of people who compared electricity plans with iSelect at that time may have found a cheaper plan if they had shopped around or used the government’s comparison site Energy Made Easy,” ACCC Chair Rod Sims said.

In addition, the ACCC noted that iSelect Limited failed to adequately disclose that cheaper plans from its preferred retail partners were only available via call centre and were not displayed on its online comparator service.

Further, iSelect Limited admitted that between March 2017 November 2019 it misrepresented the prices of some of the plans it recommended to almost 5000 consumers as a result of an error in its website and call centre code. The error resulted in a total quoted price for some plans which underestimated the cost to the consumer by up to $140 per quarter.

“Comparator websites also have a responsibility to ensure that their algorithms are correct, and must implement measures to prevent incorrect recommendations. This is particularly so when they generate significant revenue in commissions from those recommendations,” Mr Sims said.

Read more here: https://www.accc.gov.au/media-release/iselect-to-pay-85-million-for-misleading-consumers-comparing-energy-plans