The corporate regulator has taken Federal Court action over how consumer inquiries from loan comparison websites were handled.
ASIC has commenced Federal Court proceedings against Clark Family, alleging the lead-generation business promoted loan and insurance comparison services through up to 70 websites while selling consumer inquiries to the highest-bidding broker.
The Australian Securities and Investments Commission (ASIC) has alleged that Clark Family ran the websites between September 2020 and September 2026, offering free online assessments to consumers seeking loan and insurance products.
ASIC said the sites represented that users could compare rates, quotes, and product options from multiple lenders and insurers while also obtaining recommendations tailored to their individual needs and circumstances.
However, the regulator contends that the business did not compare financial products or provide tailored recommendations.
Rather, it alleges consumer inquiries were channelled through an internal bidding process, under which the broker prepared to pay the most received the lead and then contacted the consumer directly.
‘Sold to the highest bidder’
ASIC chair Sarah Court said the regulator was concerned that claims of comparison and personalisation may not have reflected the process through which consumers’ details were allocated.
“We allege Clark Family promoted its websites as providing comparisons and tailored options when, in reality consumer inquiries were simply sold to the highest bidder,” Court said.
The proceedings put fresh attention on the language used by online customer-acquisition and referral services, particularly where consumers are invited to provide personal and financial information on the expectation they will receive a genuine market comparison.
Court said those representations needed to accurately describe the service provided, particularly where businesses present themselves as helping consumers assess financial-product choices.
“Where businesses represent that they compare products or identify options that suit a consumer’s needs, those claims must accurately reflect the service being provided,” Court said.
Court action and wider focus
ASIC alleges Clark Family contravened sections 12DB and 12DF of the ASIC Act 2001, covering misleading or deceptive conduct and false or misleading representations in relation to financial services.
The regulator is seeking declarations, pecuniary penalties, an adverse publicity order, and injunctive relief.
The action arrives amid heightened ASIC scrutiny of financial-product comparison and lead-generation practices.
Earlier this month, the Federal Court found insurance comparison business Choosi misled consumers over the breadth of its funeral and life insurance comparisons.
ASIC has also begun reviewing financial advice licensees that use lead-generation services as part of a wider program examining practices that may inappropriately influence consumers.
[Related: ASIC issues reminder of reference checking obligations after breaches]
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