iSelect cops $8.5 million fine for misleading energy rates
The Federal Court has ordered iSelect to pay $8.5 million in penalties for misleading consumers comparing energy plans.
Between November 2016 and December 2018, iSelect misled consumers by representing on its website that it would compare all electricity plans offered by its partners and recommend the most suitable or competitive plan.
However, its commercial arrangements with partner electricity retailers restricted the number of electricity plans those retailers could upload.
The recommended plans were therefore not necessarily the most suitable or competitive.
The ACCC instituted proceedings against iSelect in April 2019 as a result of this conduct.
“iSelect was not upfront with consumers that it wasn’t comparing all plans offered by its partner retailers”, ACCC chair Rod Sims said.
“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”, he said.
The comparison service also admitted that, due to an error in its website and call centre code, some of the plans it recommended to almost 5,000 customers was underestimated by up to $140 per quarter.
According to the Court, iSelect, who received commissions from the retailers when those consumers selected a plan via iSelect, was responsible for ensuring that their algorithms were correct.
“This is particularly so when they generate significant revenue in commissions from those recommendations,” Sims said.
iSelect admitted liability and made joint submissions with the ACCC to the Federal Court consenting to the orders sought, including penalties.
