Few would disagree that information is power, but what if that information is flawed?
How many of us have fallen flat on our faces because we have got our facts wrong? How many of us have heard something from a third party, which turns out not to be as reliable as we thought?
This is the problem facing consumers using online comparison sites. It is difficult for them to know exactly where the information they are getting comes from, what assumptions have been made on their behalf to get the information and whether it represents a complete picture of what is available.
This is because each and every comparison site has a different way of operating and requires different data from consumers before going ahead with a search.
Results are also presented in different ways and varying levels of information are given about the products being compared and what they provide. All in all it is very confusing and incredibly difficult for consumers to get any sort of consistency.
Indeed there can also be significant differences in the prices quoted for a product from an online comparison site and the price that is ultimately offered by the actual provider.
What we need is a framework in which online comparison sites can offer their service and consumers can be sure of that service and the information they are receiving. At the moment there are too many variables and this creates a significant risk of consumer detriment.
The Financial Services Authority has created a regulatory framework in the UK that seeks to ensure the fair treatment and safe passage of consumers in the financial markets.
The rules are in place to ensure there is a level playing field for providers and intermediaries and that consumers can not only compare and contrast the products they are researching, but also that they can rely on the information they are receiving.
This builds confidence in the market and helps to ensure that consumers get the right product for their individual needs and circumstances.
At a time when access to some financial products is becoming more restricted, it is imperative that consumers can rely on the information they receive if they are to make the decisions that best serve their financial future.
Making online comparison sites a part of the regulated community would be a significant step towards helping consumers do this.
David Burrows is managing director of Secured Loan Services
The views expressed in this article are those of its author and do not necessarily represent those of the company he represents, IFAonline or any other Incisive Media affiliated organisation.IFAonline
Has run Cautious Managed fund since 2011
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