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FCA uncovers price comparison site failings

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.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. “… It also conducted consumer research with 50 participants. ” !!!???

    Another in-depth review !! — How many “millions” of people use comparison websites each year and the FCA conduct research(?) based on just 50 participants ?

  2. ” It also conducted consumer research with 50 participants. ”

    Another in-depth review !! — How many millions of people use comparison websites each year and the FCA conduct research(?) based on just 50 participants ?

  3. I am no fan of price comparison sites but the clue is in the name “price” comparison.

  4. As a member of the public, I understand that comparison sites are a guide and a basis from which to fine tune my own requirements (much the same as with buying an electrical appliance or anything else for that matter!).

    Lazy consumers who see and are given the opportunity to blame others is the real problem here. Only in financial services do we see such a nannying approach to consumer behaviour!

  5. Wow, what a surprise !!!!

  6. Isn’t cost over quality one of the FCA’s and the government’s overriding obsessions? Pot calling kettle black methinks.

    Still, the FCA has put its top man on the job so we can look forward to a swift and satisfactory resolution for all parties concerned.

  7. How far and how much money is the regulator going waste on saving the public from themselves ?

    Still as Julian has pointed out top man on the job, so don’t worry he’s not guilty recommending an inappropriate man for the job, or letting slip sensitive information, he is well worth his 250k + salary, here we have a man who lives up to his very own high expectations.

    Come on down Mr Adamson, we would all like to shake your hand !!!!

  8. @ Steve D – absolutely agree.

    Financial Services has been bred into a state of buy it and if it doesn’t fit/ pay out/ invest/ reward/ make millions, the Ombudsman will sort you out with a refund from the company who sold it or the FSCS. A ‘pay out’ whether it works or not system has been created solely by this regulator and its many former guises.

    The “price” issue in Financial Services is the client doesn’t know what effect the quality of a product will have until its too late…. The old saying is right ion the money: “the bitterness of poor quality will remain long after the sweetness of low price is forgotten” Comparison sites simply table the cheap and not so cheerful.

    I for one am glad this has been raised by the FCA but as DH says, what is the cost of the regulator finding out the obvious?

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