Federal Court Finds Choosi Misled Consumers over Insurance Comparison Scope

Key Takeaways

• The Federal Court found that Choosi Pty Ltd breached consumer protection provisions of the ASIC Act by misleading consumers into believing its comparison service surveyed a broad range of insurers, when in fact it overwhelmingly compared products from a single related insurer, Hannover.
• This case reinforces ASIC's continued enforcement focus on comparison services and "choice architecture" misrepresentations, with penalty submissions still to come.

Deep Dive

This decision is a significant enforcement outcome for any business operating, or partnering with, a comparison or aggregation service in financial products. The Federal Court held that Choosi's website, advertising, and promotional materials created a false impression of market breadth, despite the comparison service being limited almost entirely to policies from Hannover Life Re of Australasia Ltd (and one Swiss Re policy), with both insurers distributing through a related entity, Greenstone Financial Services. The Court's reasoning—that a "reasonable consumer" understands "a range of insurers" to mean a meaningful survey of the market, not merely one or two insurers—sets an important benchmark for how comparison claims will be judged going forward.

For compliance teams, the key takeaway is that marketing language around "choice," "comparison," and "range" must accurately reflect the underlying panel of providers, particularly where commercial or ownership relationships exist between the comparison service and the product issuer. Firms using or operating comparison tools should review disclosure of panel composition, the proportion of volume sourced from related or single entities, and whether promotional materials overstate market breadth. This case also highlights heightened scrutiny of related-party distribution arrangements (Choosi, Hannover, and Greenstone) where conflicts of interest or lack of independence could amplify misleading impressions.

Timeline-wise, the conduct ran from 1 July 2019 through at least 30 November 2024, spanning multiple product lines (funeral and life insurance) and over 13,700 policies sold. ASIC commenced proceedings on 2 June 2025, and the matter will return to Court for penalty submissions—meaning further financial and reputational consequences are still pending. Firms should monitor this phase, as the penalty determination will offer guidance on ASIC's expectations for quantifying harm from misleading comparison claims.

Recommended actions include: (1) auditing all comparison or panel-based marketing materials against actual product/insurer coverage; (2) reviewing related-party or distribution arrangements for conflicts that could undermine claims of independence or breadth; (3) ensuring marketing, legal, and compliance teams align on substantiation for terms like "range," "compare," "best price," or "wide selection"; and (4) tracking the penalty outcome to benchmark potential exposure. The risk implications extend beyond insurance to any aggregator or comparison model (e.g., superannuation, banking, utilities) where similar "false sense of choice" claims could trigger ASIC action under ss 12DB and 12DF of the ASIC Act.

Source: Australian Securities and Investments Commission