The corporate regulator has launched Federal Court action against Choosi over allegations it misled consumers about the range of funeral and life insurance products it compared.

The Australian Securities and Investments Commission says the platform suggested it compared products from many insurers, but that from at least July 2019, policies were issued by a single provider, with one limited exception, and all were distributed by related company Greenstone Financial Services.

The regulator alleges at least 4225 funeral policies and 9478 life policies were sold during the period, with Choosi receiving $61 million in commissions.

Misrepresentations were allegedly made on the Choosi website, across social media and via television commercials and advertorials.

ASIC deputy chair Sarah Court says consumers may have been encouraged to buy funeral or life policies when cheaper or more suitable products were available from insurers not assessed.

“Comparison websites must provide a meaningful comparison service and not simply operate as a sales channel or distribution platform for companies,” she said.

A “concise statement” filed with the court alleges consumers could only compare funeral policies issued by Hannover Life Re of Australasia.

The same applied for life covers, except during a period when Choosi included a policy issued by Swiss Re Life & Health Australia under the brand name Woolworths Life Insurance, ASIC says.

The court documents highlight various statements used on the website and in broadcasts.

ASIC says the funeral cover web page stated: “There are heaps of funeral insurance providers on the market, but our job is to help you find the one policy that’s right for you.”

Broadcast voiceovers included one saying: “Choosi is a free comparison service that helps you compare a range of policies from trusted life insurance brands.”

Greenstone, co-founded by Hollard’s Richard Enthoven, says on its website that Choosi was launched in 2007. The platform also compares income protection, pet, car, and home and contents products.

In a statement to insuranceNEWS.com.au, Choosi says it is aware of concerns raised by ASIC regarding certain aspects of its advertising.

“Choosi is currently reviewing the allegations and will take all the necessary steps and will respond accordingly,” it said. “Our customers are at the heart of what we do. We are committed to making any necessary changes that best serve our customers.”

ASIC says the court filing follows other consumer-focused actions such as those against online retailer Snaffle and non-bank lender Resimac. It also filed action against Hollard in April over the handling of a home and contents claim.

The Federal Court document on Choosi is available here.