Allegations that discounter One Big Switch misled consumers are being investigated by the Australian Securities and Investments Commission (ASIC).

The company promoted a “price-beat guarantee” and savings on life and motor insurance with statements that were allegedly misleading.

News Corp supported the insurance campaign and both the media group and One Big Switch – which has run similar programs for mortgages and electricity – received a commission for every person who took out a policy. Neither company had a financial services licence.

Law firm Kemp Strang – which was appointed by ASIC to investigate the campaigns, found the insurance advertising contained potentially false and misleading statements.

Kemp Strang will again review One Big Switch’s activities and identify deficiencies as a condition of granting the company a financial services licence. The report is expected to be finalised by the end of September.

One Big Switch has agreed to improve its compliance with ASIC’s guidance on advertising.

More than 74,000 consumers signed up for One Big Switch’s home insurance campaign last year, and insuranceNEWS.com.au questioned its ability to sell insurance without holding a financial services licence.

Kemp Strang’s original investigation found the company’s car insurance plan, which was advertised with an email titled “Could you save $600, and lock it in for two years?” was not necessarily representative of general savings.

It also said the group’s advertising was potentially misleading because it offered the “price beat guarantee” without prominent and proximate qualifications, such as a minimum age requirement and the need to switch from a comparable policy.

An “average 30% saving on life insurance” was also advertised, but pricing depended on individual applicants’ health and lifestyle.

One Big Switch secured a 13% discount on car insurance from Coles Insurance for its members, and said other discounts meant savings of up to 40%.