Comparison Websites Investigated By Watchdog

Fourteen price comparison websites are to be investigated following concerns that some of them could be misleading customers.

The Financial Conduct Authority (FCA) is looking into potential conflicts of interest, examining whether any sites are promoting deals they want them to buy and focusing too much on price rather than customer service.

They will also look into cases where comparison sites are owned by insurers themselves.

FCA spokesman David Cross said: "If insurers happen to own a particular price comparison website there is a concern that could create a conflict of interest whereby their products are promoted over others.

"When someone searches for something; are they necessarily getting the best deal for them, or are they just getting the deal the website want to give them?"

The review will question company heads about whether the customer or profit is really at the heart of a business model and examine the "expectation gap" for customers who may  money on insurance premiums only to face problems when claiming on their policy.

The FCA is looking at whether customers are getting the best deal

Mr Cross said: "Price isn't necessarily the best marker of an insurance deal. When you come to claim, if you find out that you can't, then obviously that money's been spent for nothing."

The FCA stressed that comparison sites "perform a valuable service for millions of people" and said almost half of all internet users had used them to research motor insurance, with four in five going on to buy it through the same site.

MoneySupermarket said it was an independent company with no ties to insurance groups.

The company said: "MoneySupermarket gives customers the information they need to save money on the products that suit them. If a policy doesn't offer breakdown insurance, for example, we'll show the extra cost of that."

The company added it received no commissions for its services, simply receiving a flat fee every time a customer buys a policy, and that these fees are "completely independent" of policy price.

Richard Lloyd, executive director of consumer group Which?, said: "We welcome the Financial Conduct Authority's review into price comparison sites.

"We found they claim to do all of the work for you but they don't always guarantee people the best deal or even the right one.

"We want comparison sites to treat customers fairly by being upfront that they don't cover the whole market and more transparent about what is and isn't included in the policies they're selling."

The customer watchdog Consumer Futures said PCWs vary in their transparency and quality of customer service and pushed for a voluntary accreditation scheme.

Insurance group Admiral owns Confused.com, while Esure has a 50% stake in GoCompare.com.

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