The Resolution Foundation has called for a voluntary code of practice for price comparison websites after conducting research showing many sites fail to explain the commercial relationships they may have with providers.
The foundation says consumers could be mislead into thinking promotional features, such as “best buys” and “editor’s choices” are the best value products on the market.
It says other weaknesses include a failure to explain technical terms, abbreviations and financial jargon, unnecessarily requiring personal contact details to compare products and failing to provide personalised information in relation to credit cards and savings products.
The Resolution Foundation says the code would build on the strengths as well as addressing the weaknesses that were identified in its research.
It says the code of ethics will improve standards and provide reassurance for consumers, promote a healthy comparison site market, and support government policies to improve financial capability.
Resolution Foundation chairman Clive Cowdery says: “Comparison sites are valuable in making informed financial decisions, but many sites are undermined by a lack of transparency about their commercial relationships. A voluntary code of practice would address this and encourage a growing market, without need for further regulation.”
uSwitch.com director of consumer policy Ann Robinson says: “While the Resolution Foundation’s concept is still very much in its early stages of development, we welcome any initiative that will result in increased consumer confidence and are happy to be actively involved in a full consultation on this issue.”
Moneyfacts.co.uk head Stephen Rumbelow says: “We have been constantly pushing for a code of practice to be introduced in our industry to ensure that consumers benefit from using best buy tables that search the whole market.”