Banking Review

Comparison sites trade blows amid calls for greater transparency

NEWS

Australia’s financial comparison site market is slipping into murky territory, with accusations of deceptive conduct and calls for greater transparency and regulation.

Market veteran Infochoice has defended its decision to list Once products on its site, despite its parent company the Once Group, also being a shareholder of Infochoice.

“We work with them in the same way we do with any other provider, the same rules and commercial terms apply, so it would be unfair to exclude them” says Infochoice chief executive officer Shaun Cornelius.

But Julian Mitton, chief executive of Homestar Finance, and an Infochoice client, isn’t convinced. “I think it’s on the verge of being deceptive.”

Mitton says “I was extremely disappointed to see Infochoice aggressively marketing their own product on what consumers think is an independent portal”.

Cornelius says Infochoice discloses its relationship with Once in its Financial Services Guide. “We’re comfortable that we’re doing the right thing with our disclosures.”

Mitton would like to see the disclosure go further, including the connection being made where Once products are listed on the site. “I think they need to give more clarity to users of the Infochoice website that Once is owned by the same group.”

Consumer group CHOICE is calling for comparison sites to operate under a voluntary code of conduct, but the sector is already considering increased licencing, which some are using to gain an edge over competitors.

“It has become a point of strength for this type of business to run using an Australian Financial Services Licence” says Harry Senlitonga, senior analyst with consumer research group Datamonitor. “It’s an extra step for disclosure.”

Senlitonga says consumers are curious about how groups of providers on comparison sites arrive there, and improved transparency on such sites would ultimately be a good thing.

Both Infochoice and its competitor Mozo have made an application for an Australian credit licence under new national consumer credit protection laws, which come into force next year.

Mozo general manager Rohan Gamble says all financial comparison sites listing credit products will eventually have to be licenced, and argues Ratecity, which is yet to apply for a licence, is operating illegally. “They should be shut down right now.”

A spokesperson for RateCity told Online Banking Review it believes the legislation does not require it to hold an Australian credit licence. “Nonetheless, we support the aims of the new consumer credit regime and are currently reviewing the requirements of the credit licensing system with a view to deciding whether we will apply for a credit licence.”