The price comparison site introduced the claim at the end of a TV ad, created in-house, which screened in November.
It featured a voiceover that said "Confused.com, 18 million strong and growing" and the on-screen text "18 million strong. Love Confused.com". It later updated the number to 20 million.
However, the ad watchdog ruled the ads were misleading after examining the brand's customer records and finding the number of unique records was "significantly under 18 million". An ASA spokesman refused to provide an exact number, citing reasons of commercial sensitivity.
In addition, the customer records did not demonstrate whether people listed had used the site to obtain a quote.
The ASA told Confused.com not to use its TV ads again in their current form.
The case was a victory for rival comparison site Moneysupermarket.com, which had complained to the ASA, as had 12 members of the public.
It also brought to light exactly what the "18 million strong" claim referred to, which in the ASA's view could have been interpreted as current customers, the number of people who had bought insurance through the site, or the number of people who have got quotes from the site.
Confused.com told the ASA the number referred to the number of unique customers who had registered an account and processed a quotation since the company had started trading and excluded customers who had asked to close their account.
Confused.com was invited to comment but did not respond by the time of publication.
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