iSelect fined $8.5m for misleading energy comparison

iSelect fined for misleading energy comparison

iSelect has been ordered to pay a penalty of $8,500,000 for making false or misleading representations to consumers using its energy comparison service, following Federal Court action by the ACCC.

iSelect admitted that, between November 2016 and December 2018, it misled consumers. The business represented on its website 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 court found the reality was that iSelect did not adequately disclose that it did not compare all of the plans that may have been available from its partner retailers to the customer. iSelect’s commercial arrangements with partner electricity retailers restricted the number of electricity plans those retailers could upload onto iSelect’s systems. As a result, the recommended energy plans were not necessarily the most suitable or competitive.

The court also identified that iSelect did not adequately disclose that certain Preferred Partner retailers may have made certain offers cheaper via iSelect’s call centre than the offers available through the iSelect website.

iSelect not upfront with consumers

ACCC Chair Rod Sims said “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…”

During this time, hundreds of thousands of consumers visited the website and many were duped. Those signing up for the iSelect “recommended” electricity plans may not have received the cheapest plan available from the retailers associated with the iSelect service.

The so-called ‘comparison services’ that hardly compare.

This is a situation that doesn’t surprise us. We’ve previously written about the significant shortcomings of the energy comparison industry. Journalist Michael Pascoe nailed comparison sites in his 2017 Fairfax article for the very fact “they don’t” compare. That’s because most commercial sites only show the products that they earn commissions on, which means there’s a fair chance you won’t see the best products for you. Typically they show only 6-8 retailer’s plans, yet there are around 20-35 retailers in most contestable electricity markets (NSW, SE QLD, SA and Victoria). The smaller retailers with cheaper plans, can’t afford the hefty referral fees that come with being listed on large comparisons. So you won’t find the best deals.

So, it’s no wonder energy shoppers who want to get it right – are insisting on using a whole-of-market comparison, like, that offers real transparency of what’s on offer.

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