The Financial Conduct Authority will review the regulation of price comparison websites this year as it seeks to tackle misleading consumer information.
In its first annual risk outlook, published this week, the FCA says comparison sites have been a “fundamental driver” in consumers’ focus on headline prices and brands.
The FCA says self-service online models increase consumer information and product choice in core general insurance markets but the focus on headlines distracts consumers from crucial product features such as coverage and terms.
The paper states: “[The FCA] will launch a review of compliance among price comparison firms and potential consumer protection issues these platforms raise.”
It adds: “As demand for price comparison sites continues to grow, these platforms could increasingly sell complex products that are marketed on price rather than coverage.
“These products may not be appropriate for the mass market, and which may provide a misleading impression of products on offer – consumers may not realise that not all products are displayed on price comparison websites.”
Major online comparison websites are currently subject to limited FSA regulation.
Highclere Financial Services partner Alan Lakey says: “I don’t believe you can regulate all websites but they should come with a warning similar to a cigarette packet that says the cheapest plan is unlikely to be the best.”