Millions of Australians visit comparison websites every week to do homework before buying everything from financial products to travel.
Comparison websites generally offer “free” services, but there’s no such thing as a free lunch. And as Australians learned this week, they are sometimes not all they seem.
Global hotel booking giant Trivago was fined nearly $45 million for misleading customers with advertising that claimed it made it easy to find “the best price” for rooms, when actually the hotels listed at the top of their site were there because they paid bigger commissions.
According to the Federal Court, consumers were estimated to be $30 million out of pocket.
In the finance space, commissions are sometimes also a problem. Some comparison sites don’t list those who don’t pay them – so the fundamental promise is broken.
Most of these platforms are businesses that need to make money, so we also need to check the impartiality of these sites on top of their accuracy and coverage.
Really Simple Money assessed the top five comparison websites in Australia:
Finder
Visited by at least 1.2 million Australians monthly, Finder is one of the biggest comparison websites in Australia. It is owned by private shareholders who claim that they don’t have any equity links to the products compared by the platform.
Coverage
Finder covers 1,800+ brands across 100+ categories, including insurances (health, life, car, travel, home, pet, etc.) and telco, energy and money products, including cryptocurrencies.
However, the website notes that they do not recommend specific products or service providers.
How it makes money
According to its transparency page, Finder makes money in three ways:
- When you click a link on a comparison board that leads to a third-party product or service
- When partners buy banners or other advertising on the website
- When a partner sponsors content on the website
The comparison site clarifies that it does not receive compensation each time you click a link or apply for a product or service. It also clearly labels sponsored content.
iSelect
iSelect is a comparison site that specialises in private health insurance. The company is listed on the Australian Stock Exchange and is not owned by an insurance company.
The website’s intuitive technology and data capabilities help narrow down available options for consumers.
As part of its disclaimer, iSelect reveals that it doesn’t cover all brands or products available in the markets. The selections are presented by matching customer needs and website algorithms.
On top of its comparison platform, iSelect also operates a call centre where consumers can talk to financial consultants.
Coverage
iSelect compares insurances, utilities, and personal finance products. It also sells general insurance, and its subsidiary site infoChoice is used for comparing savings accounts and credit cards.
How it makes money
Using the comparison site is free, and iSelect makes money through commissions from your chosen products.
iSelect consultants are also rewarded for the quality of advice they provide and the number of customers they help buy from its partners.
Choice
The consumer advocacy group runs a website that provides Australians with free information and advice without links to commercial bias.
The group was initially known as the Australian Consumers’ Association (ACA). It was founded by Ruby Hutchinson, a member of the Western Australian Legislative Council and the first woman to be elected to that body.
Unlike Finder or iSelect, Choice doesn’t have an algorithm-powered platform that compares products side by side. But over 1 million Australians visit the website monthly to read reviews.
Coverage
The advocacy group reviews various products and services, including baby products, fridges, food, financial services and more.
Choice has an extensive collection of consumer reviews for insurance (health, car, home and contents, pet, domestic travel, and international travel). It also reviews money products such as credit cards, savings accounts, and superannuation funds.
How it makes money
Choice is not accepting advertising or sponsorship. It is funded by more than 170,000 members and accepts donations.
Canstar
Canstar claims the mantle of the biggest financial comparison site, with over 10 million Australians visiting its website each year.
The platform compares most personal finance products using its star rating systems for its recommendations. Visitors are usually redirected to a third party website for live quotations.
The website is privately owned by shareholders with no links to financial companies.
Coverage
Canstar generally compares banking products (loans, accounts, and credit cards), insurance (health, life, pet, home, travel, car) and investments (superannuation, ETFs, cryptocurrencies).
How it makes money
According to its Transparency Page, Canstar gets paid in four main ways:
- Lead referrals – Canstar may receive a commission or fee from their comparison results when you buy a product.
- Advertising – The website features some paid advertising through its articles, comparison tables, newsletters, blog, etc. These infomercials are usually labelled Promoted or Sponsored.
- Award licenses – Canstar regularly gives awards to outstanding financial brands in Australia. They may receive compensation from licenses if the Award winners display their Award logos in their marketing materials.
- Database subscriptions – Many financial organisations subscribe to Canstar’s database for their “benchmarking and competitor analysis efforts.”
Compare the Market
Best known for its “meerkat commercials”, Compare the Market is now one of Australia’s most popular comparison sites.
The platform is owned by Budget Holdings Ltd, which owns insurance underwriting firm Auto and General, which holds Budget Direct.
Coverage
The Market compares a wide range of financial products such as health insurance, car insurance, life insurance, pet insurance, home loans, and business insurance. It also covers electricity & gas products, hotels, fuel, roadside assistance, and even international money transfers.
How it makes money
Compare the Market makes money through commissions paid by the brands they compare and has no extra cost to customers.