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Compare The Market pays penalty for alleged misleading health insurance advertising

Compare the marketCompare The Market Pty Ltd has paid a penalty of $10,200 following the issue of an infringement notice by the Australian Competition and Consumer Commission in relation to claims made in recent advertising promoting Compare the Market’s health insurance comparison service.

Between 17 March and 19 May 2014, Compare The Market distributed a letterbox pamphlet in Queensland, New South Wales and Victoria, in which it claimed, “We now compare more health funds than any other website in Australia” and “Compare more health funds than anywhere else”.

In fact, there were two other websites that compared the policies of more health insurance funds than Compare The Market, including the website operated by the Private Health Insurance Ombudsman (www.privatehealth.gov.au(link is external)).

Compare The Market also made the same or similar representations in other media, including its website, banner advertising, flyers, television infomercials and a digital display in its office foyer.

“Many Australians have private health insurance and misleading representations could affect a significant number of consumers, who are considering switching or signing up to or health insurance providers and may rely on these representations,” ACCC Commissioner Sarah Court said.

“The infringement notice was issued in relation to the letterbox pamphlet as the ACCC had reasonable grounds to believe that Compare The Market had made a false or misleading representation about the performance characteristics or benefits of its health insurance comparison service, in contravention of the Australian Consumer Law.”

“Emerging consumer issues in the online marketplace, particularly in relation to comparator websites, are a current ACCC priority area as it is critical that consumers are able to make informed purchasing decisions,” Ms Court said.

In Australia, there are over 30 insurers offering over 25,000 health insurance products. Commercial comparison websites generally only compare a selection of policies from a range of private health insurers. In comparison, the Ombudsman’s Private Health Website enables consumers to compare up-to-date health insurance policies from every private health insurer in Australia.

For tips on purchasing a private health insurance policy or switching providers, go to:http://www.accc.gov.au/consumers/health-home-car/private-health-insurance.

The ACCC may issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection provisions of the ACL. The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL.

The infringement notice issued to Compare The Market is available on the ACCC’s public register.

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