Price comparison sites may be giving customers poor information, particularly when selling insurance products, the Financial Conduct Authority (FCA) said yesterday.
Customers are too focused on the headline price of products, the FCA fears, and may not either consider or understand the differences in contract details.
“Price comparison websites have increased in popularity among consumers with an estimated one third of consumers buying their motor insurance policy through them,” said watchdog supervision boss Clive Adamson.
“However, our review found that they 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.”
Some customers wrongly believed the sites had assessed their financial needs, the FCA found – in fact, the sites simply list products by price.
The regulator is also worried that the comparison sites do not make their roles fully clear to customers, including some of those which are part of a wider insurance or brokerage groups but do not disclose that information.
The City watchdog is on the warpath, this month launching investigations into investment advice models, dealing commission, wholesale banking, and variable rate mortgage contracts.
The FCA has also proposed a cap on the interest rates charged by payday lenders.