Insurance comparison company Choosi is being sued by Australia’s corporate regulator for allegedly misleading thousands of customers for the past six years.

The Australian Securities & Investments Commission (ASIC) has filed documents in the Federal Court alleging Choosi told customers it was comparing a range of funeral and life insurers when it was only comparing policies issued by one insurer.

These insurance policies were issued by Greenstone Financial Services Pty Ltd, a company associated with Choosi.

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ASIC alleges Choosi has been misleading customers since at least July 2019 and during this time sold 4225 funeral insurance policies and 9478 life insurance policies.

On the back of these sales, the company has made $61 million in commission.

ASIC deputy chair Sarah Court said thousands of people were led to believe they were making a “sensible decision by comparing policies”.

“Consumers may have been encouraged to buy a funeral or life insurance policy when a cheaper or more suitable policy might have been available from other insurers that were not assessed,” she said.

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

Choosi’s website says it works with a “range of trusted insurance brands”.

Customers who use the service speak to staff over the phone to compare and apply for insurance online.

“We’re paid a commission for products bought through Choosi,” it says on its website.

“Our commission doesn’t affect the premium you pay for products issued through Choosi, meaning you pay the same price through Choosi as you would if you went direct to the insurer.”

ASIC alleges Choosi contravened two sections of the Australian Securities and Investments Commission Act.

The maximum penalty for a single contravention of each section is $16.5 million.