ACCC accepts court enforceable undertakings from iSelect over potentially misleading advertising

The Australian Competition and Consumer Commission has accepted court-enforceable undertakings from iSelect Health Pty Ltd following concerns in relation to certain representations that it made in the promotion of its service.

iSelect recommends health insurance policies to the Australian public via an online search engine on its website as well as through its call centre. It can arrange for consumers to purchase a policy which it recommends. iSelect receives commissions from insurance companies in respect of the policies that it arranges for consumers to purchase. 

The ACCC was concerned that iSelect made various representations which were likely to mislead consumers as to the range of insurance policies which it compared when recommending a policy. In particular, the ACCC was concerned that iSelect made representations that:

• misrepresented that it compared a significant proportion of health insurance policies available to consumers
• misrepresented the number of health insurance policies which it compared for consumers, and
• misrepresented that it compared for consumers all the health insurance covers available to them and could find the best suited policy for a consumer's needs at the lowest price.

The ACCC was therefore of the view that iSelect had engaged in misleading conduct in contravention of the Trade Practices Act.

The representations of concern were made by iSelect in some of its advertising and on its website in the period between June 2002 and August 2007. After the ACCC raised its concerns with the company, iSelect ceased making the alleged misrepresentations and took steps to implement a trade practices compliance program.

iSelect has undertaken that:

• it will not make the representations of concern in specified circumstances where they may be misleading
• it will inform certain customers who it arranged to purchase a health insurance policy of the range of insurance policies which it compared for them, and
• it will maintain a trade practices compliance program.

"There is a growing trend by companies to act as brokers or intermediaries in the provision of services and to recommend a provider of a particular service from a range of providers," ACCC Chairman, Mr Graeme Samuel, said today. 

"The ACCC considers that such recommendations by brokers or intermediaries can be of benefit to the public in their purchasing decisions. However, it is fundamental that such companies do not mislead consumers regarding the scope of the comparisons which they make when recommending a service provider."