Comparison websites for insurance products are failing to treat their customers fairly, an FSA review concludes.
In a study of 17 comparison sites, the regulator says it found examples of both good and bad practice but says more must be done to provide consumers with “clear, fair and not misleading information”.
The FSA, which is set to launch its own comparison website for Payment Protection Insurance (PPI) later this month, has not disclosed which sites it reviewed, but says it found “mixed evidence” of the clarity, fairness and accuracy of information available to consumers.
The review follows earlier assessments in 2006 and 2007 - when the FSA concluded no immediate action, other than to follow the development of the market, was required – and responds to the continued growth of comparison sites.
Ed Harley, FSA head of financial promotions, says a big concern is sites’ focus on price to attract the consumer.
“We welcome innovation and competition in the rapidly expanding insurance comparison website market.
“However, we are keen that the market develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading.
“We recognise that many consumers use these websites to search for insurance products. Consumers should shop around for the best deal, but it is important that they compare what’s covered by a policy, and not just focus on the price.”
The FSA says the review looked at three issues:
- Whether consumers were encouraged to consider features, other than price, before purchasing products;
- Clarity of the levels of excess that apply to insurance policies; and
- Whether firms have appropriate systems and controls in place for ensuring that key product features included within insurers’ policies are correctly listed on their site and that they correctly relay consumer information to brokers and insurers.
The FSA’s consumer website – www.moneymadeclear.fsa.gov.uk – has been set up to help consumers purchasing insurance through comparison websites.
The FSA says it will be following up this review by visiting individual firms to test whether the information they provide is appropriate.
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