ACCC takes Iselect to court for allegedly misleading consumers into paying more for electricity
The ACCC is taking Iselect to court for misleading consumers, alleging that, despite claiming it would recommend the most competitive energy plan, the comparison service instead recommended brands paying higher commissions.
Some consumers may have been paying more for electricity as a result, according to the regulator.
“We were particularly concerned with the issues raised about Iselect’s claims because we know consumers go to comparison sites to get the best deal, and for an impartial and objective comparison of complex energy plans. We allege they were not getting that so they may be paying more for electricity than they should be,” ACCC chair Rod Sims said of the claims, which have allegedly been occurring since at least November 2016.
“Iselect told consumers they would help them compare all energy plans available in their area from all their partner retailers. But we claim they were actually favouring some partner retailers over others, such as those on its ‘Preferred Partner Program’ who were allowed to have more plans available on the Iselect website that excluded and targeted certain consumers. These preferred retailers paid Iselect higher commissions.”
The ACCC stated that Iselect did not disclose to consumers that it was allegedly limiting the number of plans shown, and choosing the most ‘competitive’ plan, based on these commercial arrangements.
Additionally, the regulator alleges that cheaper plans, not shown in the comparison results, were available on the Australian government’s Energy Made Easy website, which shows all energy plans available in a consumer’s area.
“When comparison sites mislead consumers, it further adds confusion to the already complicated retail energy market, denying people an informed choice on what is often a major household expense,” said Sims.
“The ACCC’s Retail Electricity Pricing Inquiry recommended a mandatory code for comparator websites that, if it was in place, would have meant that Iselect would have been unable to implement its ‘Preferred Partner Program’ in the way the ACCC alleges they did. In addition, we will continue to take action to address consumer and competition issues arising from opaque and complex pricing of essential services, in particular energy services which is a key compliance and enforcement priority for the ACCC this year.”
The legal proceedings, which were commenced in the Federal Court, involve the ACCC demanding that Iselect stops engaging in the practice, faces penalties and pays its legal costs.
An Iselect spokesperson provided the following comment to Mumbrella:
“Iselect knows from speaking to its customers that many Australian households are struggling with high energy prices and are looking for help to find better value. The company believes its energy comparison service strengthens competition, ethically and in accordance with industry practice.
“As an Australian company, Iselect takes its obligations under [the] Australian Consumer Law very seriously and has processes in place to ensure compliance.
“Iselect has worked cooperatively with ACCC throughout its investigation. As the matter is now before the Federal Court, the company is unable to make any further comment.”
Hate, hate, hate this industry, it’s a complete con job run by modern-day digital pirates. How they duped everyone by preying on consumer laziness due to the convenience of the internet astounds me. And when you have comparison sites whose sole reason to exist is to compare other comparison sites creating a ladder of lead commissions there can be no other result than consumers paying more in the long run.
A contact at BUPA (who has since left) admitted that if they didn’t need to compete with the other providers in the comparison site game the average health insurance premium would be between 8-13% cheaper.
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It’s iSelect, not Iselect.
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Hi Anon2,
From a branding and marketing perspective, yes, it is iSelect, as is clearly seen in all their communications (and the logo we have included in the story).
You will note, however, that we are trying to stick to normal rules of capitalisation when it comes to brand names – for example, we write Ooh Media, not the brand’s own oOh!media. When Network Ten was marketing itself as TEN, we instead often went with Ten (as the ‘E’ and ‘N’ don’t actually stand for anything, so don’t require caps).
I’m the first to admit we have been inconsistent with this, but where we can, we’re trying to keep it simple.
The bigger issue here, I would argue, is Iselect/iSelect’s alleged conduct, and the outcome of the proceedings.
Thanks,
Vivienne – Mumbrella
Over the past few years when renewing an agreement I have tried iSelect. Not once was it able to recommend anything better than I already had … and normally for more than I was currently paying, or less than I was currently receiving.
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I had a phone call from iselect about health insurance and being disheartened with the one I had for thirty years agreed to change to another company, being told I had exactly the same cover. After a day stay procedure, I realised my mistake not only did I have a lower level of cover but my out of pocket expense was huge. On contacting iselect I was told I had a starter plus level (two levels down from what I had previously) . Nowhere on my paperwork did it say this. Needless to say I Immediatlely changed to a different health insurance and was put on a waiting list for cover after thirty years of continuous cover. Please do your own selecting, takes time but you will know what your getting.
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I noticed this scam 3 years ago when iselect only had prefered partners in there comparison list. At one time when they FIRST started they had most but last 3-4 years absolutely they were after commissions only. like there’s only about 10 ATM when they should be comparing 50+
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