Far from helping consumers to choose insurance
policies, price comparison sites may be confusing them further, according to
the regulator.
The Financial Conduct Authority (FCA) says some sites
are failing consumers' expectations, while a number are breaking the rules.
The FCA said consumers were not being given the right
information to help them make decisions.
Comparison sites relied that they were offering
helpful information to users.
Of 14 sites reviewed, many were accused of being
"unclear" by the FCA, and some were failing regulatory standards.
The FCA said comparison sites tend to focus too much
on price, without telling consumers about other policy details - such as the
excess they might have to pay in the event of a claim.
It said that some consumers mistakenly believed that
the price comparison website had provided them with quotes on the best policy
for their individual needs and had assessed the suitability of the policy for
them.
Conflict of interest
In addition, some sites which are owned by an
insurance company or an insurance broker, were failing to flag up a potential
conflict of interest.
This is against FCA regulations.
Small print on the Gocompare.com website informs customers
that it is 50% owned by Esure, an insurance company.
Gocompare.com has always strived to show its customers
the full story when it comes to insurance comparison,”
Hayley ParsonsCEO, Gocompare
Those who read right to the bottom of another site,
Confused.com, will see that it is owned by Admiral Insurance.
"However, we are a completely separate business,
and pride ourselves on impartiality and independence," according to the
website.
Tesco Compare - whose owner, Tesco, sells insurance
directly - has not yet commented on the FCA report.
However, the FCA found no evidence that such firms had
profited as a result of their potentially conflicting ownership.
'Misconceptions'
The FCA said that one-third of consumers - more than
eight million people - buy their motor insurance through price comparison
websites, but many people were not getting the service they expected.
"Our review found that they were not meeting our
requirements in delivering fair and consistent outcomes for consumers,"
said Clive Adamson, the FCA's director of supervision.
However some of the websites which the FCA reviewed
explained that they gave customers more than a simple price comparison.
"Gocompare.com has always strived to show its
customers the full story when it comes to insurance comparison, and was the
first comparison site to enable its customers to compare the levels of cover,
as well as price," said Hayley Parsons, the founder and chief executive of
Gocompare.
"MoneySuperMarket is built to make it easy for
customers to find the right policies and products at the best possible price,
with the overall aim of helping every household make the most of its
money," said Peter Plumb, the chief executive of MoneySuperMarket.
The FCA said it expects the price comparison websites
to "take on board the findings".
The FCA will be providing individual feedback to the
websites involved, and will be asking them to take action on specific areas
where they are failing to meet its expectations.
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