The FCA has raised concerns that price comparison websites are failing to give consumers appropriate product information and encourage them to focus on the headline price of cover.
In a thematic review of 14 price comparison websites, published today, the FCA says comparison sites “distract” consumers from factors such as coverage and excess levels.
The FCA also argues consumers often incorrectly believe price quotes include a suitability assessment. It says: “Some consumers mistakenly believe 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.”
It adds where sites are run as part of a larger insurer or broker, some sites did not disclose the potential conflict of interest.
The review focused on sales of general insurance products, but the FCA says the findings could also be applicable to comparison sites listing other financial products.
It says it will consider regulatory intervention if comparison sites do not improve standards.
FCA director of supervision Clive Adamson says: “Our review found price comparison sites were not meeting our requirements in delivering fair and consistent outcomes for consumers. We also found, through our consumer research, that consumers had a number of misconceptions about the services they provided.
“We expect price comparison websites to take on board the findings of the review.”
The FCA looked at price comparison websites between December 2013 and April 2014. It also conducted consumer research with 50 participants.