If you have ever gone online searching for health insurance, home insurance, an energy plan or a credit card, chances are you’ve encountered some kind of comparison website.
They seem to be a simple way of getting the best deal possible on a number of products or services. However, they may not be as great as you think.
While they won’t tell you, these websites will often receive up to 40 per cent in commissions from the products they’re recommending and might not even share all the options available to you. That 40 per cent also drives up the costs for everyone.
Not only that, but every time you switch companies because your bill bounces back up, they make even more money.
Some of these sites are even owned by the companies that sell the insurance and other products the site is comparing.
So, not only are you not getting the best deal available to you but some of these comparison sites — or “comparasites” — have also been known to be ‘misleading’, according to the ACCC.
“Comparator website operators may be considered misleading if they omit to display (or incorrectly display) relevant information and are not transparent about commercial relationships,” the ACCC website reads.
According to the ACCC, in 2020, a comparison website was ordered to pay $8.5 million in penalties after the Federal Court found it had “misled consumers by representing on its website that it would compare all electricity plans offered by its partners and recommend the most suitable or competitive plan, when this was not the case”.
“… [The website’s] commercial arrangements with partner electricity retailers restricted the number of electricity plans those retailers could upload onto the systems, and therefore the recommended plans were not necessarily the most suitable or competitive,” they added.
Thankfully, there’s a new company called Kyco taking on comparasites by negotiating better deals for their members directly with suppliers to solve the problem of rising bill costs.
They use group buying power to attract low-priced, long-term offers from a single provider, for much less than the comparasites will charge you. So, essentially, the more members they have, the higher the savings.
Kyco, which is 100 per cent Australian-owned and completely independent, launches this month and its mission is to reset the current unsustainable market model and shift the balance of power back to consumers.
They are looking at all categories that comparasites deal in, including energy, insurance, telecommunications, banking and even fuel, groceries, electronics and appliances in the not too distant future. Kyco is member-based — the more members they have, the more negotiating power they have to arrange low, long-term deals with providers. There’s no comparison.
Providers are attracted to the idea of ditching the comparasites that charge them huge commissions with a fairer system like Kyco that gives them access to customers.
Members are also free to choose whether or not they want to take up the deal and when they do, will never be stuck in lock-in contracts.
It costs providers a whole lot less to use Kyco as their source of new customers, so they can offer you much lower bills as a result. There’ll be no promo periods, so you won’t get a bill shock one year on. Just bills that start low and stay low.
And while those comparison sites may be getting a sizeable percentage of the profits, Kyco will only receive a three per cent handling cost for each consumer that signs on to one of their deals.
They also work with suppliers to ensure they are always receiving the fairest deals available.
So, if you like the idea of saving money and ditching the comparasites and want to learn more about Kyco and what they do for their members, click here.